Key Points:

  • Intended to help country meet goals for reduction of energy consumption
  • Large-scale and small-scale fixed-asset project plans must meet separate regulations before construction begins

Under the 11th Five-Year Plan (from 2006 to 2010), China has pledged to cut energy consumption per unit of GDP by 20%, or 4% each year. But the official statistics show that it failed to meet the 4% annual target either in 2006 or in 2007, mainly as a result of the continued drive toward investment.

As required by the PRC Energy Conservation Law and the State Council’s Decree on Strengthening Energy-Saving Works, all new fixed-asset projects must be examined by the government to evaluate their environmental impact and energy-saving potential. Investors cannot be given a go-ahead if the project fails to meet national energy standards. Most importantly, the project will be stopped at its beginning, rather than scrapped in its later stages.

Xie Zhenhua, vice minister of the National Development and Reform Commission (“NDRC”), said the new national regulation concerning energy-saving assessments and examination of fixed-asset projects will be announced as soon as possible based on experience gained in pilot regions such as Beijing, Shanghai and Jiangsu that have put the rule into operation.

Listed below are the major components of Beijing’s energy regulations that may be incorporated into implementation of the national regulation.

First, as implemented in Beijing’s pilot operation, the regulations apply to all fixed-asset projects and divide them into two groups: large-scale (listed at Art. 31) and small-scale, for which different examining methods are used.

Second, for large-scale projects, detailed information is required regarding its energy-saving potential including an assessment of the general situation surrounding the project, the energy supply available, energy consumption statistics, actual amounts likely to be consumed and potential energy-saving effect. The Beijing DRC would also require qualified advisory agencies to provide their own opinions and determine whether to approve the project in regard to their opinions on these energy-related aspects of the project. Only with this approval can the project’s investors submit their feasibility reports as well as applications for projects.

For small-scale projects, an energy-saving registration chart should be submitted, which is also crucial to receiving project approval, but for which there is no compulsory requirement that advisory opinions be sought.

Third, in the construction stage, the Beijing Construction Committee is required to enhance its supervision and inspection of a project’s energy-saving results when it is complete.

Beijing’s implementation of energy rules suggests that the coming national regulation will help China achieve its energy-saving goals and require technical innovation from investors. Making energy-saving inspections a precondition for new construction will block resource-intensive projects and encourage the proliferation of environmentally friendly and energy-efficient projects.