China

CN-3a:Top-1000 Energy-Consuming Enterprises Program

Policy Description

China‘s national Top-1000 Energy-Consuming Enterprises program (Top-1000 program) was launched in April 2006 through a directive of five central government agencies and the issuance of a notice and implementation plan. The program aimed to make a major contribution to the country‘s five-year energy intensity reduction target of 20% target (energy/GDP)  by delivering 100 million tonnes of coal equivalent (tce) of the 600–700 million tce of total national savings needed. The program targeted the largest 1,000 energy consuming industrial enterprises in the country that each consumed a minimum of 180,000 tce (5.3 PJ) in 2004. In the end, the enterprise name list included 1,008 enterprises.

Description

China‘s national Top-1000 Energy-Consuming Enterprises program (Top-1000 program) was launched in April 2006 (*1) [1] through a directive of five central government agencies [2] and the issuance of a notice and implementation plan [4]. The program aimed to make a major contribution to the country‘s five-year energy intensity reduction target of 20% target (energy/GDP)  by delivering 100 million tonnes of coal equivalent (tce) of the 600–700 million tce of total national savings needed. The program targeted the largest 1,000 energy consuming industrial enterprises in the country that each consumed a minimum of 180,000 tce (5.3 PJ) in 2004. In the end, the enterprise name list included 1,008 enterprises.

The implementation plan stipulated that the enterprises within the Top-1000 program should realize total savings of 100 Mtce (2.9 EJ) between 2006 and 2010 from the expected 2010 energy consumption of these 1000 enterprises. The implementation plan provided guidance to the enterprises, calling on them to significantly improve their energy efficiency with the goal that energy intensity (energy used per unit of production) reach the level of advanced domestic production and that some enterprises attain either international or industry advanced levels of energy intensity. The plants were required to meet the energy-savings targets and outline in their responsibility contracts. It was hoped, or expected, however, that through this program a certain share of the plants would reach domestic or international best practice levels.  This was an aspirational program goal though - individual plants were not assigned targets based on these best practice levels. Individual companies were required to establish monitoring systems, provide monitoring reports, carry out energy audits and submit them for verification and develop energy efficiency plans (see under 'Requirements for target group')

The essential elements of the program included the assessment of the energy-efficiency potential of the industrial facility as well as target-setting through a negotiated process. Participation by industries was motivated through the use of both incentives and disincentives. Supporting programs and policies, such as facility audits, assessments, benchmarking, monitoring, information dissemination, and financial incentives all played an important role in assisting the participants in understanding and managing their energy use and GHG emissions in order to meet the target goals.

Achievement of the energy-saving targets and energy conservation measures (*3) was part of the provincial government evaluation system in which the responsible government officials were evaluated annually each year on whether or not the targets under their jurisdiction had been achieved. Regions and enterprises that did not meet the targets would not be given annual rewards or honorary titles, leaders in state-owned enterprises would not receive annual evaluation awards, and officials would not be promoted without meeting the energy conservation targets.

Provinces signed energy savings responsibility contracts with thousands of additional key energy-using enterprises especially during 2007–2008 [2] which led to the extension of Top-1000 to other enterprises.

 

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: Mandatory

Period

Start Date: 2006

End Date: 2010

Policy Linkages

Supported By Ten Key Projects Program Supporting Measure
Supported By Financial Rewards for Energy-Saving Technical Retrofits Supporting Measure
Supported By Differential Electricity Pricing for Industry Supporting Measure
Replaced By Top-10,000 Energy-Consuming Enterprises Program Effort Defining

Agencies Responsible

National Development and Reform Commission
National Development and Reform Commission
National Development and Reform Commission

Primary Objective: Energy

Objective

The major objectives of the Top-1000 program (*2) are to: - significantly improve the 'Top-1000 enterprises’ energy efficiency; - reduce unit energy consumption to domestic best practice level for all major products; - have some enterprises attain either international best practice levels or sector best practice levels; - improve the energy efficiency of each sector; and - achieve energy savings of approximately 100 million tons of coal equivalent in the 11th Five-Year period.

Target Group

Large-scale enterprises in nine major energy-consuming industries that each consumed a minimum of 180,000 tce (5.3 PJ) in 2004: iron and steel, petroleum and petrochemicals, chemicals, electric power generation, non-ferrous metals, coal mining, construction materials, textiles, and pulp and paper.

Driver of energy consumption or emissions affected by policy: Total energy consumption

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

Coverage

When the program began, it represented 33% of national energy consumption and 47% of industrial energy usage which increased during 2007-2008 with the extension of Top-1000 to other enterprises (through the Provincial Top-1000 programs, in which provinces added thousands more - smaler - companies from their own top-1000 energy consumers)

Quantitative Target? yes

Target: Targets are set for each enterprise individually by the National Development and Reform Commission (NDRC) (*7) [1] and are are defined as total energy savings in 2010 against a growth baseline.

Time Period: 2006-2010

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: - For enterprises that are evaluated as failed, a notice of criticism is circulated, approval of any energy-intensive projects or additional industrial land use may be suspended, and no favorable exemption policies will be applied [2]; - If a state-owned enterprise fails the evaluation its leader cannot be given any type of awards, no matter how well the enterprise is doing in other aspects

Requirements on the Target Group

Participants are required to implement energy management through the following activities:

  • Establish sound energy measuring and statistical system [14]
  • Submit energy utilization status reports of enterprises regularly (i.e. energy consumption; energy efficiency; cost-effectiveness of energy savings and energy-efficient measures)
  • Self-conducted energy audits, following the Chinese energy audit standard: GB/T 17166-1997, to analyze the situation on the ground, identify key issues and potentials, and provide feasible and practical energy-saving measures
  • Submit energy audit reports to provincial-governments in 6 months (i.e. by Oct 2006) for review
  • Develop energy conservation plans: Based on energy audits, companies formulate their energy conservation plans annually.

Support by Government

Provincial and local governments are directed to:

  • Provide training sessions for Top-1000 enterprises at initiation of program and financial support;
  • Lead and implement the program, including tracking, supervision, and management of the energy-saving activities of the enterprises;
  • Oversee and “urge” the enterprises in their energy management, energy auditing, and energy reporting requirements;
  • Improve monitoring of enterprises through audits and sampling;
  • Promote the use of new mechanisms such as target-setting agreements;
  • Encourage enterprises to meet energy saving targets and attain international advanced levels ahead of schedule

Implementation Toolbox

To support the implementation of China's Top-1000 Program, the following tools are are provided

  • Training programs on data collection, monitoring, energy audits, technological improvement measures, etc. Training material to be found on: http://hzs.ndrc.gov.cn/jnxd/t20061108_92567.htm
  • Energy audit standard (GB/T 17166-1997), information system from NBS.

Complexity of Implementation

Government

Unclear

Target Group

Unclear

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 - Total energy savings from 2006-2009 is 136 Mtce [3]; - Total energy savings from 2006- 2010 is 150 Mtce [16]; - Total carbon dioxide emission reduction from 2006-2010 is almost 400 million tonnes [17]. However, total savings results are unclear because results reports are conflicting according to different sources [11] Elaborate details on amount of enterprises establishing energy management, carrying out audits, etc are given in [15]
Estimated costs/benefits for industry - 2007: Enterprises invested over 50 B RMB ($US 7.5B) in technology innovation, implementing over 8000 projects; - 2008: Enterprises invested 90 billion RMB ($US 13.5B) in energy-saving technical renovations and implemented about 3,000 energy-saving technical renovation projects
Estimated cost for government Not Available
Other Benefits
General Benefits Significant energy savings and associated CO2 emissions reduction, reduced emissions of other pollutants, improved productivity

References & Footnotes

References

[1] Price, L., Wang, X., Jiang, Y., 2008a. China’s Top-1000 Energy-Consuming Enterprise Program: Reducing Energy Consumption of the 1000 Largest Industrial Enterprises in China. Berkeley, CA: Lawrence Berkeley National Laboratory (LBNL-519E). http://china.lbl.gov/sites/china.lbl.gov/files/LBNL_519E._Top-1000_Energy_Consuming_Enterprises_Program._Jun2008.pdf

[2] World Bank, 2010. Accelerating Energy Conservation in China’s Provinces. 1 June. Online: http://go.worldbank.org/1W2EFBV600

[3] Xie Ji, 2010. Presentation on the energy savings results in China, at the Energy Efficiency Forum

[4] Liu Jingru, Yu Cong, and Liu Zhiping, 2009. “Energy Conservation Moves Forward Steadily with Significant Achievements – A Review of 30 Years of Open Door Reform,” Energy of China, Vol. 31, No. 2, February 2009, pp. 17-22.

[5] National Development and Reform Commission (NRDC), 2006. Notice of Issuance of the Thousand Enterprise Energy Saving Action Implementation Plan, NDRC Environmental and Resource Planning Office #571. http://hzs.ndrc.gov.cn/newzwxx/t20060413_66111.htm

[6] National Development and Reform Commission (NDRC), 2008. Public Notice of Evaluation Results of Top-1000 Program Energy Saving Targets in 2007 (《2007 年千家企业节能目标责任评价考核结果及有关情况公告》), [2008]58, August 27, 2008. http://zfxxgk.ndrc.gov.cn/PublicItemView.aspx?ItemID={6980dc20-e1aa-4de5-a9e8-dd40baca4a45}

[7] National Development and Reform Commission (NDRC), 2009. Public Notice of Evaluation Results of Top-1000 Program Energy Saving Targets (《千 家企业节能目标评估考核 结果 的公告》), [2009]18, November 16, 2009. http://www.sdpc.gov.cn/zcfb/zcfbgg/2009gg/t20091124_315017.htm

[8] National Development and Reform Commission (NDRC), 2009. Announcement of Assessment and Evaluation Results of Top-1000 Enterprises Energy Conservation Program, 2009 (千家企业节能目标评价考核结果的公告,2009年第18号) Nov 16, 2009.  http://www.sdpc.gov.cn/zcfb/zcfbgg/2009gg/t20091124_315017.htm, http://zfxxgk.ndrc.gov.cn/PublicItemView.aspx?ItemID={6dccc4b4-dbd6-4449-a6bc-d23a7cc519c9}

[9] National Development and Reform Commission (NDRC) and National Bureau of Statistics (NBS), 2007. Report on the State of the Energy Use of the Top-1000 Enterprises (Year 2007). http://www.eri.org.cn/manage/englishfile/80-2007-10-11-804695.pdf

[10] Price, L., Xuejun Wang, Jiang Yun, 2010. "The Challenge of Reducing Energy Consumption of the Top-1000 Largest Industrial Enterprises in China", Energy Policy, Vol. 38 Issue 8. http://china.lbl.gov/sites/china.lbl.gov/files/Top-1000.Energy_Policy_November2010.pdf

[11] Seligsohn, D., 2010. China’s System for Measuring, Monitoring, and Reporting Energy and Climate Data. http://www.cecc.gov/pages/roundtables/2010/20100401/seligsohnStatement.pdf?PHPSESSID=d9097d30ed952507929799754c836291

[12] Yu Cong (Energy Research Institute), 2008. “Top-1000 Enterprises Energy Conservation Action Plan,” presentation at the China Sustainable Energy Foundation’s Eleventh Senior Policy Advisory Council Meeting, November 14, 2008, Beijing.

[13] Zhao, T., 2008. “High-energy-consuming firms save 38.17m tons of coal,” China Daily. 2008-09-04.

[14] Hongyou Lu, China Energy Group July 28, 2010. Industrial Energy-Related Data Reporting Systems in China.

[15] Price, L., 2010, Information for Development of a Country Factsheet on Industrial Energy Efficiency Policies and Programs in China, presentation to SQ Consult, 10 November 2010, Lawrence Berkeley National Laboratory, Berkeley (CA).

[16] National Development and Reform Commission (NDRC), 2011. Review of the Eleventh Five-Year Plan: Top 1000 Program Exceeded Targets. September 30, 2011. http://www.gov.cn/gzdt/2011-09/30/content_1960586.htm

[17] ClimateWorks Network Knowledge Series, 2011. The Race is On: China Kick-Starts Its Clean Economy. October, 2011. http://www.climateworks.org/download/?id=86f8db38-1272-41da-8fe9-4f9aa0021d13

Footnotes

(*1) Launched by the Department of Resource Conservation and Environmental Protection of the National Development and Reform Commission (NDRC), the National Bureau of Statistics (NBS), the State-owned Assets Supervision and Administration Commission, the Office of National Energy Leading Group, and the General Administration of Quality Supervision, Inspection and Quarantine

(*2) Energy savings target responsibility contracts between the government and key energy-consuming enterprises provide a formal underpinning for the relationship between the supervising government and the specific enterprises on the attainment of energy efficiency improvements during the FYP.

(*3) Supervision experts use an Evaluation Score Card to evaluate the performance ot each key energy-consuming enterprise. Evaluation against the quantitative targets accounts for 40 of the 100 scoring points total. Progress on different kinds of energy conservation activities accounts for 60 points. These include progress in developing internal energy efficiency management systems, in delivery of energy efficiency technical improvements and investment, in compliance with energy efficiency-related regulations, especially elimination of backward equipment and adherence to standards, and in advancement of auditing, measurement, and collection and analysis of statistics.

(*4) For enterprises with energy consumption of 180,000 tce (5.275 PJ) or higher

(*5) National Bureau of Statistics (NBS) established information system for Top-1000 enterprises; Tracks, collects and reviews data; Organized training on data collection and reporting; Analyzes the progress of the program

(*6) Local governments supervises the data reporting process; Conducts random checks on energy reporting; Convenes experts to review energy audit reports and energy conservation plans; Supervises and urges the implementation of energy conservation plans

(*7) In the Top-1000 Program, targets were set by NDRC for each enterprise in order to support the provincial-level targets and to reach the overall savings target of 100 Mtce (2.9 EJ) for the Top-1000 Program. Initially, NDRC set preliminary targets for each enterprise taking into consideration their general situation such as which industrial sector they belonged to since the potential energy savings vary by sector, as well as the general technology level of the enterprise, if known. The targets were not based on detailed assessments of energy-savings potential of each enterprise or each industrial sector. This approach was taken due to time constraints. Since the Top-1000 Program was designed in support of the 11th Five Year Plan which began in 2006, it would have been necessary to start the target-setting process three or four years prior to follow international practice, which was impossible given both the time pressure and the large number of participating enterprises.