Five Year Plan Update: China Announces Total Energy Target

In a move that exceeded expectations, China’s former Minister in charge of the National Energy Administration, Zhang Guobao, announced yesterday that for the 12th Five Year Plan China would cap total energy use at 4 billion tons coal equivalent (TCE) by 2015. There had been rumors that China would adopt a total coal cap in the 12th Five Year Plan, but Zhang’s announcement goes beyond just coal to include all energy sources.

Since Zhang had already announced the 2015 target for development of non-fossil energy sources of 11.4% of total energy use, the new target effectively sets the fossil fuel ceiling at 3.54 billion TCE. Since the cap is put on total energy consumption, if China’s non-fossil fuel use grows more quickly than Zhang’s target (and in recent years both nuclear and wind energy have grown at rates faster than projected), fossil fuel use could conceivably grow more slowly.

How does this translate into greenhouse gas emissions? It is difficult to come up with an exact figure, because we do not know the precise fuel mix in 2015. It is possible that non-fossil fuel will grow more quickly. It is also quite likely that the current ratio of coal (76.4%), oil (19.4%) and natural gas (4.2%) will change, with the percentages of oil and natural gas both increasing and coal decreasing. Since coal is more carbon-intensive than the other two sources, this type of change would reduce the carbon intensity of the fuel mix. In a back of the envelope calculation, I have used the current fossil fuel ratio and Zhang’s percentage target for non-fossil fuel to come up with what is essentially the highest amount of CO2 that might be emitted if China stays within this 4 billion TCE ceiling. The figure I derive using emissions factors calculated by my colleagues in WRI’s Greenhouse Gas Protocol project is 9.5 billion tons– this is not the most likely amount, which, given trends toward increased non-fossil fuel and natural gas development, is likely lower– but rather a likely outside ceiling on the total. It would represent a substantial increase over China’s 6.5 billion tons emitted in 2008.

The significance of this target is the fact that it is an absolute energy target, rather than what the specific number is. The actual number is closely aligned to China’s announced 40-45% 2020 carbon intensity goal as well as its likely 16-17% energy intensity goal for 2015. In the past the Chinese have argued that absolute targets are difficult to project and meet, given the volatile growth of a developing country. The new target suggests more confidence that they can estimate both growth rates and energy use trends, and use these to set absolute goals. It is also significant that this new target is set as part of China’s domestic policy-making process. It is not timed in relation to any international meeting, nor is it the result of international urging. China’s domestic imperatives to use resources effectively and control the negative impacts of fuel use, including climate change and other environmental impacts, seem to have driven this decision.

Correction: The percentages for fossil fuels in the fuel mix listed earlier were incorrect and have now been corrected: coal (76.4), oil (19.4), natural gas (4.2). These do not change our overall estimate for an outside figure of 9.5 billion tons of CO2 by 2015, because it was an approximation and these changes are within the rounding error. However, our comparison to the IEA figure of 6.5 billion tons of energy-related carbon left out fossil fuel used in industrial uses. The correct comparison to 2010 figures would be to 7.5 billion tons.