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China Coal Capacity Tops Goal; Energy-Saving in Doubt

Date: 18-Jun-07
Country: CHINA

It would also be a test for the country's top economic planner, the National Development and Reform Commission (NDRC), which has been battling excess capacity in a variety of sectors to cool over-investment.

"Excess capacity in the coal industry has already emerged," Xinhua net (www.xinhuanet.com) reported, citing Zhao Tiechui, head of the State Administration of Coal Mine Safety.

The news Web site is run by the official Xinhua news agency.

Coal production capacity will top 3.1 billion tonnes by 2010, 500 million tonnes more than the government's plan, the report said, citing data from the coal mine safety administration.

In January, the NDRC unveiled China's new five-year development plan for the coal industry, estimating a demand of 2.6 billion tonnes in 2010 while setting an output target at the same level.

That would represent an 18 percent rise from the 2.2 billion tonnes mined in 2005, a far slower increase than the 70 percent rate notched up during the 2000-2005 period.

The NDRC said it had taken into account energy-intensive industry curbs, technology innovation and energy saving campaigns when making the demand estimate.

China set an ambitious goal to cut energy consumption per unit of GDP by 20 percent in five years, but it failed to reach a 4 percent cut during the first year, in 2006.

Dai Yande, a deputy chief at the Energy Research Institute under the NDRC, warned this week that China has had difficulty fulfilling its promise with existing efforts.

"The central government is strengthening its energy saving and pollution reduction efforts, but relevant rules and regulations are loosely enforced by local governments," Dai was quoted as saying in the China Business News newspaper. "Existing policies and enforcement are insufficient to cope with problems and challenges in the energy sector."

Many institutions forecast in 2001 that China's energy demand would rise to 2.4 billion tonnes of coal equivalent in 2020, but it had already reached that level in 2006, Dai was quoted as saying.

Energy consumption will irreversibly grow quickly from current levels, he said. "Judging by the current situation, it will be difficult for energy consumption per unit of GDP to decline in the first half of this year."

More than 70 percent of China's energy needs are met by burning dirty coal.

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