China may hit energy use target for 1st time in 08

By Rujun Shen

KUNMING (Reuters) - China could meet its own annual targets for energy efficiency for the first time this year, but will still have problems meeting its goals of reducing emissions, according to a state-backed think tank.

China in 2006 set a goal of cutting energy intensity, or the amount of energy needed to produce $1 in economic growth, by 20 percent by 2010. But after it failed to meet the annual target in 2006, the first year of the campaign, it has not published the annual goals for subsequent years.

"It is predicted that the slowdown of energy consumption per unit of GDP in 2008 can hopefully reach the annual target of above 4.4 percent for the first time," according to prepared remarks by Fan Jianping, director of the Economic Forecast Division of the State Information Center, for a speech on Tuesday.

"However, it will be hard to reach the standard for the slowdown in chemical oxygen demand and sulfur dioxide discharges."

Energy intensity fell by 3 percent in 2007, an official with the National Development and Reform Commission said in December, without specifying what the original target had been. Energy intensity fell by 1.33 percent in 2006, far short of Beijing's goal of a 4 percent drop for that year.

China has cracked down on loans to polluters and set targets for firms and provinces. In some heavy industries, it has phased out particularly inefficient plants and processes.

It has also removed electricity discounts to heavy users, like aluminum smelters and ferro-alloy producers, and raised the domestic price of fuel and coal, providing incentives for firms to become more efficient.

"Investment in energy saving and emission reduction facilities over the past three years will start to come into play in 2008," Fan said.

But he said targets for cutting pollutants would be harder to reach. China's fight against pollution has become an international issue, as it tries to cut choking smog and present a sparkling face during the 2008 Olympic Games, to be held in Beijing in August.

China aims to reduce emissions of sulfur dioxide, the pollutant in acid rain, by 6 percent this year compared with 2005 levels, state media said this month, quoting the head of the State Environmental Protection Administration, or SEPA.

It plans to reduce chemical oxygen demand, or COD, a measure of water pollution, by 5 percent from its 2005 level this year.

"The sulfur dioxide discharges and COD switched from increasing to decreasing for the first time" during the first three quarters of 2007, Fan said in the prepared remarks.

"However, the slowdown rate still shows a large discrepancy with the target of the '11th five-year plan'. More environmental contingencies have occurred in the country, making the environment pressure more severe," he said.

(Writing by Lucy Hornby; Editing by Anne Marie Roantree)