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The State Council Announces the Comprehensive Working Programme on Energy Conservation and Emissions Reduction for the 12th Five-Year Plan Period--A Senior Official from the NDRC Answers Questions

The State Council printed and distributed the Comprehensive Working Programme on Energy Conservation and Emissions Reduction for the Twelfth Five-Year Plan Period (2011-2015) (No.[2011]26 document issued by the State Council, hereinafter referred to as the Programme), coming up with 50 policy measures in 12 areas. The reporter had an interview with a senior official with NDRC on the programme.

Q: Would you please introduce the backgrounds of this programme?

A: As of the 11th Five-Year Plan period (2006-2010), the State identified the reduction of energy consumption intensity and of total amount of major pollutants as one of the mandatory targets for national economic and social development. Over those five years, local areas and departments had made earnest efforts in carrying out the decisions and arrangements of the CPC Central Committee and State Council, and effectively taking the energy conservation and emissions reduction as the important platform and breaking point for adjusting economic structure, shifting the economic development mode, and advancing the science-based development. As a result, the energy consumption per unit of GDP output throughout the country had been down by 19.1%, and the total amount of sulfur dioxide and chemical oxygen demand was down by 14.29% and 12.45% respectively. Accordingly, the above-said mandatory target set out in the Outline of the 11th Five-Year Plan for National Economic and Social Development was achieved, the ascending trend of the energy consumption per unit of GDP output and the total amount of major pollutants at the end of the period was reversed, strong supports were provided for the fast yet steady economic growth, and important contributions were made to addressing the climate change.

The 12th Five-Year Plan period is still an important period of strategic significance and opportunities for China's development with great potentials. Energy demand is a rigid demand in China, thanks to the accelerated industrialization and urbanization processes and the constant upgrading of consumption mix. Moreover, the resources and environment constitute increasing restraints for the development, due to the restricted resource sustaining capacity and environmental capacity as well as the worldwide energy security issue and response to climate change. So, the energy conservation and emissions reduction efforts face a grave situation. In particular, there are problems in this regard, such as poor performance in shouldering responsibilities, difficulty in pressing ahead with the work, incomplete incentive and restraint mechanisms, weak groundwork, lagged-behind capacity building, and poor regulation. So, the State Council printed and distributed the programme a couple days ago for the purpose of achieving the mandatory targets set out in the Outline of the Twelfth Five-Year Plan for National Economic and Social Development.

The programme is a programmatic document for advancing the energy conservation and emissions reduction efforts during the 12th Five-Year Plan period (2011-2015). It identifies the general requirements, major goals, key tasks, and policy measures for the energy conservation and emissions reduction efforts during this period and includes 50 articles that fall into 12 sections. The 12 sections are as follows: the general requirements and major goals; strengthening the target responsibility for energy conservation and emissions reduction; adjusting and optimizing the industrial mix; carrying out major projects; tightening the management; making great efforts in developing circular economy; speeding up the development, extension, and application of technologies; improving the economic policies; intensifying the supervision and inspection; extending the market-based mechanism; stepping up the groundwork and capacity building; and engaging the whole society in energy conservation and emissions reduction efforts.

Q: What are the general requirements for the energy conservation and emissions reduction efforts in the 12th Five-Year Plan period?

A: The programme provides the general requirements for the energy conservation and emissions reduction efforts in this period, that is, taking the Deng Xiaoping Theory and the important thoughts of "Three Represents" as the guideline, thoroughly practicing the philosophy of "science-based development", insisting on integrating the mitigation of the energy consumption intensity, the downsizing of the total amount of major pollutants, and the reasonable control of the energy consumption size, and developing a target-driven mechanism to expedite the change of economic development mode; insisting on integrating the optimization of the industrial mix, promotion of the technical advances, the enhanced engineering measures, and tightened management, substantially improving the energy efficiency, and remarkably cutting down the emissions; further developing the work scheme with the government as the leading role, enterprises as the main player, and market as the driving force, and participation by the whole society.

Q: What are the major goals?

A: The programme elaborates on the energy conservation and emissions reduction goals set out in the Outline of the 12th Five-Year Plan. For the energy conservation, it proposes that by the year 2015 the energy consumption per 10,000 yuan GDP output will have been brought down to 0.869 t of coal equivalent (as per the price in 2005), down by 16% from the 2010 level at 1.034 t and by 32% from the 2005 level at 1.276 t. The energy conserved during the 12th Five-Year Plan period will have reached 670 million tons of coal equivalent. For the emissions reduction, it proposes that by the year 2015 the emission cap of chemical oxygen demand and sulfur dioxide will have been 23.476 million tons and 20.864 million tons, both down by 8% from the 2010 levels at 25.517 million tons and 22.678 million tons respectively; the emission cap of ammonia nitrogen and nitrogen oxides will have been 2.38 million tons and 20.462 million tons, both down by 10% from the 2010 levels at 2.644 million tons and 22.736 million tons respectively.

The programme also, in the form of an annex, sets out the energy conservation goals, the emission cap of chemical oxygen demand, the emission cap of ammonia nitrogen, emission cap of sulfur dioxide, and emission cap of nitrogen oxides in local areas during the 12th Five-Year Plan period.

Q: what are the considerations in the programme about strengthening the target responsibility for energy conservation and emissions reduction?

A: The programme proposes the following three tasks for strengthening the target responsibility for energy conservation and emissions reduction. First, it rationally assigns the emission reduction tasks. A plethora of factors including economic development level, industrial mix, energy conservation potential, environmental capacity, and State industrial layout have been considered in an effort to rationally assign the energy conservation and emissions reduction tasks to local areas. For example, for the assigning of energy conservation tasks, the programme requests that Tianjin, Shanghai, Jiangsu, Zhejiang, and Guangdong cut down the energy use by 18%; Beijing, Hebei, Liaoning, and Shandong cut down energy use by 17%; Shanxi, Jilin, Heilongjiang, Anhui, Fujian, Jiangxi, Henan, Hubei, Hunan, Chongqing, Sichuan, and Shaanxi down by 16%; Inner Mongolia, Guangxi, Guizhou, Yunnan, Gansu, and Ningxia down by 15%; and Hainan, Tibet, Qinghai, and Xinjiang down by 10%. Second, the programme requests to improve the statistics, monitoring and evaluation schemes for energy conservation and emissions reduction efforts. The statistics on energy production, distribution and consumption will be stepped up, the statistics schemes for the energy consumption in the construction and transport sectors and public institutions will be developed and improved, the measures on the statistics, monitoring and evaluation of energy saved and emissions reduced will be perfected, and efforts will continue in sharing the information on the energy consumption and major pollutant emission quota per unit of GDP output in each local area and the whole country. Third, the evaluation of the target responsibility will be strengthened. To integrate the target responsibility evaluation of local areas with that of the industries, integrate performance in achieving the five-year goal with that in hitting the annual target, and integrate the evaluation of annual target responsibility with the progress will address the problem that the energy conservation and emissions reduction efforts are slack at the beginning and have to speed up towards the end. The State Council will organize the evaluation of the target responsibility of provincial people's government on energy conservation and emissions reduction efforts, take the evaluation results as a key indicator for comprehensive performance evaluation of leading team and leading officials, incorporate the results into the performance evaluation of local governments and state-owned enterprises, put in place the accountability scheme, and give commends and rewards to local areas, organizations and individuals that have made outstanding performances.

Q: What are the policy measures proposed by the programme on adjusting and optimizing the industrial mix?

A: The programme proposes five policy measures. 1) It is necessary to control the energy-intensive and highly polluting industries from overexpansion. New projects will be strictly controlled in energy-intensive, highly polluting, and overexpansion industries. Higher environmental standards will be set for access to the industries, and the restraint by indicators such as energy efficiency, environmental protection, land use, and safety indicators will be tightened. The export of products from energy-intensive and highly polluting industries will be under control. High environmental standards will be followed when the central and western regions accept enterprises relocated from the eastern region, and polluting industries and inefficient production capacities will be prohibited. 2) It is necessary to speed up the phase-out of inefficient production capacities. The annual task in this regard will be assigned to the local areas, and the phase-out mechanism will be improved. Moreover, efforts will be made to guide and urge enterprises with inefficient production capacities to rearrange their employees. The central government will spend money supporting these efforts in local areas. 3) It is necessary to advance the upgrading of traditional industries. Efforts will be made to speed up the application of high-tech and advanced applicable technologies to upgrade traditional industries, promote the in-depth integration of information technology with industrialization, and give priority to supporting the relocation and upgrading of major polluting enterprises and key projects that help fuel the industrial upgrading. 4) It is necessary to adjust the energy consumption structure. Hydropower will be developed on the basis of ecological conservation and resettlement, nuclear power will be developed on the basis of ensuring nuclear safety, the development of natural gas will be sped up, and renewable energies such as wind energy, solar energy, biomass energy, and geothermal energy will be developed in accordance with local conditions. The non-fossil energy will have constituted 11.4% of the primary energy consumed by the year 2015. 5) It is necessary to increase the weight of service industry and emerging industries with strategic important in the national economy. The valued added of the service industry and of the emerging industry with strategic importance will have constituted 47% and 8% of the GDP by the year 2015.

Q: How many kinds of key projects are there intended for energy conservation and emissions reduction?

A: The key projects fall into three kinds. 1) Key projects for energy conservation, which include the energy conservation transformation projects, model projects on industrialization of energy efficient technologies, projects on public benefits with energy-efficient products, and projects on extension of the contract-based energy management. The energy conservation capacity is up to 300 million tons of coal equivalent. 2) Key projects for emissions reduction, which include the construction projects of the municipal wastewater treatment facilities and supporting pipes, and the desulphurization and de-NOx projects. The capacity for reduction of chemical oxygen demand is up to 4.2 million tons, of ammonia nitrogen is up to 400,000 tons, of sulfur dioxide is up to 2.77 million tons, and of nitrogen oxides is up to 3.58 million tons. 3) Key projects on development of circular economy, which include projects on comprehensive use of resources, recovery of discarded and used products, model base for "urban minerals", industrialization of re-manufacturing, and circular-economy transformation of industrial parks. The programme also requests raising energy conservation and emission reduction funds through multiple channels. The money that finances those key projects intended for energy conservation and emissions reduction will be sourced by the project owner through self-raised money, loans from financial institutions, and social capitals. The people's governments at all levels will allocate money as supports.

Q: What are the requirements for stepping up the administration of energy conservation and emissions reduction efforts?

A: There are eight requirements. 1) Rationally controlling the total energy consumption size. A scheme for assigning the tasks for control of the total energy consumption size will be established and an implementation plan will be enforced. The evaluation and review of the energy conservation efforts of fixed-assets investment projects will be taken as an important approach to control the increment and total size of the energy consumption in local regions. A forecast and pre-alarming scheme will be established for the total energy consumption size, so alarms will be given on a timely basis to regions with overgrowth of energy consumption size. Energy management will be stepped up in sectors such as industrial sector, construction sector, transport sector, public institutions, and urban and rural development and consumption sectors. 2) Stepping up the administration on the energy efficiency of key energy users. Efforts will be made to step up the administration on the energy efficiency of energy users that consume energy above 10,000 tons of coal equivalent each year, engage 10,000 enterprises in the energy conservation and low-carbon campaigns, and try to save energy up to 250 million tons of coal equivalent. 3) Stepping up the energy conservation and emissions reduction efforts in the industrial sectors. The key sectors are electricity, coal, iron and steel, non-ferrous metal, petrochemical, chemical, building materials, paper-making, textiles, printing and dyeing, and food processing sectors. The goals and tasks will be identified, the industrial guidance will be stepped up, the technical advances will be advanced, and the supervision and administration will be enhanced. 4) Promoting energy-efficient buildings. The green buildings action plan will be developed and implemented. Energy-efficient buildings will be promoted through planning, legislation, technologies, standards, and design. 5) Promoting energy conservation in the transport sector. Vigorous efforts will be made in developing public transport in urban areas, the thematic campaign on low-carbon transport will be organized, and the phase-out of inefficient and outdated transport modes will be expedited. 6) Advancing the energy conservation and emissions reduction efforts in the agricultural sector and rural areas. The phase-out of inefficient and outdated agricultural machines and tools will be expedited, and the energy-efficient agro-machinery, equipment, and fishing boats will be extended. The agricultural non-point pollution will be treated, the integrated treatment of rural environment will be stepped up, and clean rural areas projects will be carried out. 7) Promoting energy conservation in the commercial and civil sectors. Energy conservation and emissions reduction campaigns will be conducted in the retail and other commercial and trade service sectors as well as tourism sector, energy efficient home appliances and lighting products will be promoted to the residents. Incentives will be given to purchasing energy efficient and environment-friendly automobiles. The use of disposal products will be cut down, and excessive packaging will be restricted. 8) Stepping up the energy conservation and emissions reduction efforts in the public institutions. Higher energy efficiency standards will be required of new buildings. The energy conservation transformation in the office areas will be expedited. The charging of heating supply for State organs will be collected according to the heat meter readings. The reform on the government cars will be advanced. The schemes for the energy audit, energy efficiency announcement, and energy consumption quota management will be established and improved in public institutions.

Q: What are the requirements for vigorously developing circular economy?

A: The programme proposes to enhance the macro guidance on circular economy, map out national plan for the development of circular economy and thematic plans for key sectors, deepen the pilot projects on circular economy, and extend the model modes of circular economy. In the meantime, the programme sets out specific tasks in five areas, that is, extending cleaner production from all dimensions, advancing the comprehensive use of resources, accelerating the industrialization of resource recycling, advancing the waste-to-resources conversion, and facilitating the building of a water-saving society.

Q: What are the specifications on speeding up the development and extension of energy-saving and emissions reduction technologies?

A: The programme has the following specifications. 1) Speeding up the research and development of common and key technologies for energy conservation and emissions reduction efforts. Organizing the breakthrough of common and cutting-edge key technologies oriented to high efficiency, energy conservation and environmental protection. 2) Working harder on the model projects on the industrialization of energy efficient and emission reduction technologies. Top priority will be given to key technologies for energy conservation and emissions reduction and equipment industrialization, and the development of industrialization bases will be expedited. 3) Accelerating the extension and application of energy conservation and emissions reduction technologies, and the mechanism for screening, appraisal and extension of technologies will be established. The priority will be given to spreading a series of advanced and applicable technologies. 4) Stepping up the exchanges and cooperation with relevant international organizations and governments in the field of energy conservation and emissions reduction, actively introducing, assimilating and absorbing overseas advanced technologies, and working harder on the spread of these technologies.

Q: What are the economic policies identified by the programme for advancing energy conservation and emissions reduction?

A: The programme comes up with economic policies in support of energy conservation and emissions reduction efforts from four fronts including the pricing, fiscal, taxation, and financial policies.

The pricing and charging policies are as follows. 1) Deepening the pricing reform for the resource products, straightening the pricing relations among resource products such as coal, electricity, petrol, natural gas, water, and minerals; introducing scalar pricing schemes for domestic power and water; improving the measures for introducing differential electricity prices during the peak and valley hours; deepening the reform on the heat supply scheme, and introducing the charging of heat according to the heat meter readings; 2) Introducing punitive electricity price for enterprises and their products that consume energy exceeding the ceilings of national and local standards for energy consumption per unit of product. Local areas may, based on the national regulations, set higher standards for the introduction of the differential price and punitive price. 3) Following the price set for electricity generated by power generation units with desulphurization facilities, and working out policies for setting the price for electricity generated by de-NOx facilities in coal-fired power plants. 4) Further improving the wastewater treatment charging policies, and considering incorporating the sludge treatment cost into the wastewater treatment costs. 5) Carrying out reforms on the garbage treatment ways, working harder on collecting treatment fees, and cutting down the collection cost.

The fiscal policies are as follows. 1) Securing more money from the government budget and from the special funds for energy conservation and emissions reduction efforts in the central budget, and accelerating the implementation of key projects and the capacity building. Local governments will also spend more in energy conservation and emissions reduction efforts. The supporting mechanisms will be strengthened, including the policy of "reward for subsidies", offering financial rewards as an innovative policy to control pollution in rural areas, and spreading energy efficient products with government subsidies. The guidance role of government money will be enhanced. 2) Money earned from the operation of State-owned assets will continue to finance the enterprises' energy conservation and emissions reduction projects. 3) Promoting the government green procurement, improving the mandatory procurement and priority procurement schemes, gradually increasing the percentage of energy efficient and environment-friendly products, and working on starting the government procurement of energy-efficient and environment-friendly services.

The taxation policies are as follows. 1) Introducing preferential policies for energy conservation and emissions reduction in terms of income tax and value-added tax; 2) Actively advancing the tax for fee reform of the resources, changing the computation and collection measures for the crude oil, natural gas, and coal resources by a shift from specific tax to ad valorem tax and raising the tax level, and abolishing by law the unreasonable charges of mineral resources. 3) Vigorously advancing the environment tax for fee reform, and seeking to levy environment tax on priority items to be controlled for which there are mature technologies and standards available. 4) Improving and implementing preferential tax policies for comprehensive use of resources and development of renewable energy; 5) adjusting the tax policy for the import and export tariffs, and containing the export of energy-intensive and highly polluting products.

There financial policies are as follows. 1) Enabling the financial institutions to offer more credit loans for energy conservation and emissions reduction projects, and encouraging them to develop innovative credit loans management mode suited to such projects; 2) Channeling money from the venture capital companies, equity investment companies, social donation, and international aid funds to the energy conservation and emissions reduction efforts; 3) Setting higher thresholds for offering loans to energy-intensive and highly polluting industries, incorporating the companies' environmental incompliance information into the corporate credit information system of the People's Bank of China and the information sharing system of the China Banking Regulatory Commission, and linking it with the appraisal of corporate credit ratings, loans, securities, and financing; 4) Introducing the environmental pollution liability insurance and establishing the green bank rating scheme.

Q: How to step up the supervision and inspection on the energy conservation and emission reduction efforts?

A: The programme puts forward the following measures to step up these efforts. 1) Improving the energy conservation and environmental protection legislations, and accelerating the development of urban drainage and wastewater treatment regulations, emission permit management regulations, and regulations on the control of pollution by livestock and husbandry breeding farms. 2) Strictly enforcing the evaluation and review scheme as well as environmental impact assessment scheme for energy conservation, taking the emission quota as the precondition for environmental reviews, and suspending for a period of time the environmental review of regions and companies that fail to achieve the annual emission reduction target or to carry out key projects in accordance with the target responsibility documents; 3) Stepping up the supervision on key pollution sources and wastewater treatment facilities. The companies in the key sectors under national environmental monitoring programs, including the electricity, iron and steel, paper-making, and printing and dyeing sectors, need to install, operate and maintain a monitoring platform and automatic emission monitoring system, give regular reports on the operation status and emission information, and promote the networking and sharing of the automatic monitoring data. 4) Strengthening the supervision on the performance of energy conservation and emissions reduction efforts. Efforts will be made in the thematic inspection on energy conservation and emissions reduction and the inspection on key energy users and pollution sources, and introducing the enforcement responsibility scheme.

Q: What are the key market-based mechanisms specified by the programme for energy conservation and emissions reduction efforts, in order to give play to the market-based mechanisms?

A: The programme proposes to give full play to the market-based mechanisms for energy conservation and emissions reduction efforts, and these mechanisms include further implementing the energy labeling scheme and energy-efficient and environment-friendly product certification scheme, establishing the pacemaker scheme for environmental standards, stepping up the dispatch of energy-efficient power generation and the electricity demand side management, speeding up the introduction of contract energy management, advancing the pilot projects on the emission right trading and carbon-emission right trading, and introducing the franchise construction and operation of pollution treatment facilities.

Q: What are the groundwork and capacity building areas for energy conservation and emissions reduction?

A: 1) Accelerating the development of energy conservation and environmental protection standards. Developing/amending mandatory national standards including the energy consumption quota per unit of product, the energy efficiency of the product, and emission standards, as well as the buildings energy conservation standards and the design specifications, in order to raise the thresholds for access to projects; developing emission standards oriented to meeting the goals for control of ammonia nitrogen and nitrogen oxides; and encouraging local areas to develop in accordance with law stricter local standards for energy conservation and environmental protection. 2) Strengthening the capacity building for energy conservation and emissions reduction. Establishing energy conservation management scheme with integration of management, supervision, and services; continuing the capacity building on energy statistics; urging the key energy users to install required energy measurement appliances, and promoting the online collection and real-time monitoring of energy measurement data.

Q: What are the tasks proposed by the programme on engaging the whole society in energy conservation and emissions reduction efforts?

A: The programme sets out three tasks. 1) Stepping up the publicity and education on energy conservation and emissions reduction. Well organizing thematic publicity campaigns including the national week of energy conservation publicity and the World Environment Day, and enhancing the routine publicity and education. 2) Engaging the whole nation in the energy conservation and emissions reduction efforts, paying close attention to ten thematic campaigns targeted at the households, and communities, adolescents, companies, schools, army camps, the countryside, government departments, science and technology, popular science, and media, and stepping up the publicity and education. 3) The governments will take a leading role in energy conservation and emissions reduction.

Q: What are the instructions of the State Council on the fulfillment of the target responsibility on energy conservation and emissions reduction and on stepping up the organization and guidance in this regard?

A: In the circular on the printing and distribution of the comprehensive working programme on energy conservation and emissions reduction during the 12th Five-Year Plan period, the State Council proposed the following suggestions. Efforts need to be made in fulfilling the target responsibility on energy conservation and develop a working framework with the government as the leader, the companies as the main player, the market as the driving force, and participation by the whole society. The governments need to play the leading role, the local people's governments at all levels are responsible for the energy conservation and emissions reduction efforts within their administrative region and the head of the governments are the first person in charge. The companies need to be identified as the main player for energy conservation and emissions reduction, strictly enforce the laws, regulations and standards for energy conservation and environmental protection, develop and improve detailed management measures, and fulfill the goals and tasks. The market mechanism need to be further employed. More efforts will be made in the wide use of the market-based mechanism for the energy conservation and emissions reduction efforts, and enabling these efforts to be the incumbent requirements for the companies and all players. The awareness of the whole nation on resource conservation and environmental protection will be raised, the whole nation will be engaged in the energy conservation and emission reduction efforts, and the good atmosphere of all the society participating in these efforts will be created.

Efforts will also be made in stepping up the organization and guidance of the energy conservation and emissions reduction efforts, paying close attention to supervision and inspection, and strictly conducting the evaluation and accountability. National Development and Reform Commission runs the leading group of the State Council on energy conservation and emissions reduction efforts, substantially strengthens the overall coordination of these efforts, and advance the reduction of energy consumption. MEP is responsible for pollution reduction efforts. The National Bureau of Statistics is responsible for stepping up the energy statistics and monitoring efforts. Other relevant departments need to substantially perform their functions and cooperate closely. The provincial-level people's governments need to make arrangements as soon as possible for the energy conservation and emissions reduction efforts in the 12th Five-Year Plan period, and further identify the responsibilities of relevant departments as well as their division of labor and progress made.

 

(This English version is for your reference only.In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.)

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