III. An All-Round Effort to Reform Energy Consumption

China perseveres with its fundamental national policy of conserving resources and protecting the environment. Prioritizing energy saving, it understands that energy conservation means increasing resources, reducing pollution, and benefiting humanity, and exercises energy saving throughout the whole process and in all areas of economic and social development.

1. Implementing a Dual Control System of Total Energy Consumption and Energy Intensity

A dual control system of total energy consumption and energy intensity is in place. China sets the targets of total energy consumption and energy intensity for different provinces, autonomous regions and municipalities directly under the central government and applies oversight and checks over the performance of local governments at all levels. It has introduced the energy-saving index into the performance evaluation system of eco-environmental progress and green development, to guide the transformation of the development philosophy. It breaks down the dual control targets of total energy consumption and energy intensity for key energy consumers, and evaluates their performance accordingly to strengthen energy-saving management.

2. Improving Laws, Regulations and Standards for Energy Conservation

China has revised the Energy Conservation Law. It has put in place an energy-saving system in key areas including industry, construction and transport as well as in public institutions. It continues to improve the supporting legal institutions for energy conservation supervision, energy-efficiency labeling, energy-saving checks on fixed assets investment projects, and energy conservation management of key energy consumers. It has strengthened standard-setting as a constraining factor and improved energy-saving standards system. It has carried out 100 projects to upgrade energy efficiency standards, enacted more than 340 national energy-saving standards, including almost 200 mandatory standards, covering most high energy-consuming industries and final energy consumption products. China has strengthened oversight over energy-saving law enforcement, reinforced operational and post-operational supervision, and exercised strict accountability for law enforcement to ensure the effective implementation of energy conservation laws, regulations, and mandatory standards.

3. Improving Energy-Saving and Low-Carbon Incentives

Corporate income tax and value-added tax incentives are awarded to energy-saving businesses. China encourages the imports of energy-saving technologies and equipment, and controls the exports of energy-intensive and heavy-polluting products. China is improving the green financial system, and makes use of energy efficiency credits and green bonds to support energy conservation projects. It is exploring new ground in pricing to advance green development. Differential pricing, time-of-use pricing, and tiered pricing for electricity and natural gas have been adopted. China is improving its policies of environment-friendly electricity pricing to arouse the enthusiasm of market entities and the public in energy conservation. It has conducted trials of paid use of and trading in energy-using right in four provinces and cities including Zhejiang, and carbon emissions trading in seven provinces and cities including Beijing. The government is promoting energy performance contracting (EPC) and developing integrated energy services, and encourages innovations in energy-saving technology and business models. It has strengthened the management of demand-side power use and implemented a market response mechanism to guide the economical, orderly and rational utilization of electricity. A “leader board" of best energy-savers has been put in place to increase the efficiency of final energy consumption products, energy-intensive industries, and public institutions.

4. Improving Energy Efficiency in Key Areas

China is doing all it can to optimize the industrial structure, develop advanced manufacturing, high-tech industry and modern services with low energy consumption, and promote the intelligent and clean transformation of traditional industries. China has sped up the transformation to green, recycling and low-carbon industry, and implemented green manufacturing on all fronts; put in place monitoring, law enforcement and diagnostic mechanisms for energy conservation, and carried out energy efficiency benchmarking; raised the energy-saving standards of new buildings, expanded the energy-saving renovation of existing buildings, and improved the structure of energy consumption in construction. It is developing a highly efficient and comprehensive transport system with lower energy consumption, promoting the use of clean energy in transport, and enhancing energy efficiency of vehicles and other means of transport. It is building energy-saving public institutions, to set an example for the rest of society. A market-oriented system of green technology innovation will be put in place to encourage the R&D, transfer and popularization of green technology. China is promoting national key energy-saving and low-carbon technologies, particularly for the transport sector, and energy-saving industrial equipment. The government encourages extensive public involvement in energy conservation, and is raising public awareness of frugality, promoting simple, modest, green and low-carbon lifestyles, and opposing extravagance and excessive consumption.

5. Promoting Clean Final Energy Consumption

Focusing on the Beijing-Tianjin-Hebei region and its surrounding areas, the Yangtze River Delta, the Pearl River Delta and the Fenwei Plain (the Fenhe Plain, the Weihe Plain and their surroundings in the Yellow River Basin), China is working to reduce and find substitutes for coal consumption, and taking comprehensive measures to control the use of bulk coal. It is promoting clean and efficient coal-fired furnaces, and replacing inefficient and highly-polluting coal with natural gas, electricity and renewable energy. Now, fiscal and price policies are in place to support clean heating in winter in northern China to improve air quality. China is replacing coal and oil with electricity in final energy consumption, and popularizing new energy vehicles, heat pumps, electric furnaces, and other new forms of energy consumption. It has strengthened the development and connectivity of natural gas infrastructure, and made the use of natural gas more efficient in urban areas, as well as in industrial fuel, power generation, and transport. It is promoting natural gas CCHP (combined cooling heating and power), decentralized renewable energy, and multi-energy coordination and energy cascade use in final energy consumption.