China

CN-18:Promotion of the Energy Conservation and Environmental Protection Industry

Policy Description

The central government of China issued plan to promote the development of the "Energy Conservation and Environmental Protection (ECEP) Industry". The goal of the ECEP industry is to support the achievement of energy-saving and emission reduction targets set in the 12th Five-Year Plan (FYP), as well as develop new areas for economic growth. This industry covers companies that develop or provide energy-efficient and environmental –friendly products and technologies.

Description

 

The Twelfth Five-Year Energy Conservation and Environmental Protection Industry Development Plan (《“十二五”节能环保产业发展规划》)[1] was issued by China’s State Council on June 16, 2012 to local governments and ministries at the central level.

The Energy Conservation and Environmental Protection (ECEP) Industry, which is defined as an industry that provides technical support for energy resources conservation, circular economy development, and eco-environment protection, is one of the seven strategic new emerging industries supported by the national government in China. The goal of the ECEP industry is to support the achievement of energy-saving and emission reduction targets set in the 12th Five-Year Plan (FYP), as well as develop new areas for economic growth. This industry covers companies that develop or provide energy-efficient and environmental –friendly products and technologies.

The Plan analyzed the current development status of the ECEP industry and proposed that the total output value of the industry should reach 4.5 trillion RMB by 2015, contributing 2% to the national gross domestic product (GDP). The Plan emphasizes policy mechanisms, technological innovation, key projects, market regulation, and business models, as the keys to the development of this industry that must be promoted and implemented by the provincial government and several ministries under the State Council.

The energy conservation industry is one of the three key industries within the ECEP industry (together with resources utilization and environmental protection industries). Energy-saving technologies and equipment (such as boilers, furnaces, motors, waste heat and waste pressure equipment, and instruments), energy-efficient products (including appliances, lighting, vehicles, and building materials), and energy-efficiency services are identified as key areas for the energy conservation industry. Key technologies are also recommended in the Plan.

The State Council outlines eight key projects for the ECEP industry, including commercialization of key energy-saving technologies and equipment, industrialization of the light-emitting diode (LED) lighting industry and its application, demonstration of urban waste recycling and utilization, “re-manufacturing” (reuse or recycling ) of automobile parts and other mechanical equipment, waste utilization and industrialization, demonstration of environmental-protection equipment and industrialization, development of sea water desalination, and development of the energy-saving and environmental-protection service industry.

The Plan also suggests seven policy directions, including accelerating the pace of energy/resources pricing reforms, increasing support from fiscal and tax policies, enlarging investment and financial channels, improving import and export policies, strengthening technical support, improving regulations and standards, and emphasizing monitoring, enforcement and management.  

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Administrative

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2012

End Date: 2015

Policy Linkages

Supports Energy and Carbon Intensity Targets of the 12th Five Year Plan Effort Defining
Complements Ten Key Projects Program Supporting Measure
Complements Energy Performance Contracting and Energy Service Companies (ESCOs) Supporting Measure

Agencies Responsible

Local, Provincial, Central governments

Primary Objective: Energy

Objective

• Significantly increase the capacity of the ECEP industry. The target is to increase the output value of ECEP industry 15% annually, and by 2015, the target is to reach the output value of 4.5 trillion RMB, representing a share of 2% of the national GDP. • Continue improving key technologies in the industry. By 2015, the quality and technological levels of the equipment and products of the industry should increase significantly. A series of domestic international brands should be developed and some key technologies should reach the international advanced levels. • Increase the market share of energy-saving and environmental-protection products (such as energy-efficient appliances, or energy-saving technologies). By 2015, the market penetration rate of high energy-efficient products should increase from the current 10% to more than 30%. The market for products of resource utilization and environmental protection should also be increased. • Develop the service industry of energy conservation and environmental protection. The annual growth rate of the sales of Energy Service Companies (ESCOs) should stay at 30% and by 2015 the ESCO industry should have 20 professional energy performance contracting companies, and 50 professional environmental-protection service companies, with annual output values of 1 billion RMB. The treatment of urban waste water, municipal wastes, and the de-sulphurization and de-nitification should basically reach professionalism and be operated based on the use of market mechanisms.

Target Group

provincial governments, ministries that under the supervision of the State Council

Driver of energy consumption or emissions affected by policy: increase energy efficiency, increase resource utilization rates

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Quantitative Target? yes

Target: The target is to increase the output value of ECEP industry 15% annually and by 2015 the target is to reach the output value of 4.5 trillion RMB, representing a share of 2% of the national GDP.

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Requirements on the Target Group

Support by Government

Not clear so far. But the plan provided seven guidlines on policy directions, including: accelerating the pace of energy/resources pricing reforms, increasing support from fiscal and tax policies, enlarging investment and financial channels, improving import and export policies, strengthening technical support, improving regulations and standards, and emphasizing monitoring, enforcement and management. 

Implementation Toolbox

Not clear so far – detailed implementation plans are going to be issued later on.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions It is estimated that by 2015 the energy-savings from the ECEP industry could be over 400 million tonnes of coal equivalent. The total output of ESCO industry could reach 300 billion RMB, and total investment of urban waste water and de-sulphurization & de-nitrification treatment could achieve 800 billion RMB. The total output value of the environmental services could be 500 billion RMB [2]. It is estimated that the policy will have a positive impact on reducing GHG emissions and increasing energy efficiency.
Estimated costs/benefits for industry N/A N/A
Estimated cost for government N/A N/A

References & Footnotes

References

[1] State Council, 2012. "The Notice on Issuing the Twelfth Five-Year Energy Conservation and Environmental Protection Industry Development Plan." State Council [2012] 19. June 6, 16. http://hzs.ndrc.gov.cn/newzwxx/t20120629_488674.htm

[2] State Council, 2012.