China to impose local coal consumption caps

China is planning to cap coal consumption in a number of pilot regions as part of its plans to increase the use of clean energy and cut air pollution, the 21st Century Business Herald newspaper reported on Friday. The report, citing officials involved in drawing up the policy, said caps would be imposed on the heavily-industrialised northern region of Hebei province, including Beijing and Tianjin, as well as the manufacturing powerhouses of the Pearl and Yangtze River deltas.Other areas set to be covered by the scheme include parts of northeast China’s Liaoning province, the Shandong peninsula on the eastern coast, the cities of Chengdu and Chongqing in the southwest and Urumqi in the far northwest, the report said.

Beijing will restrict annual city coal consumption to 20 million tonnes by 2015, while the Pearl River Delta, Shanghai and Urumqi are committed to a policy of “zero growth” in coal use in the next five years.

Other regions will be forced to restrict coal consumption growth to less than 10 percent, the report said.

China was set to include mandatory controls on total national energy consumption in its latest energy “five-year plan” for the 2011-2015 period.

Zhang Guobao, who retired as the country’s senior energy official in March, told reporters that China would restrict energy use to 4 billion tonnes of standard coal equivalent by 2015, up from about 3.2 billion tonnes in 2010.

No formal announcement on the cap has yet been made, and some experts said targeting coal use would make more sense.

China has already set a legally binding target to reduce energy intensity — the amount produced per unit of GDP — by 16 percent by 2015, and regional targets have also been imposed.

Yang Fuqiang, a veteran energy policy researcher and senior adviser to the U.S.’s Natural Resources Defense Council, said local governments were likely to recoil at an additional total energy cap that could force them to slash economic growth.

“A coal cap is better because for China — coal is the big issue in all pollutants, and in CO2, and if we cap coal and not energy, we can develop more renewables and more natural gas.” (Reporting by David Stanway; Editing by Jacqueline Wong)

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