Oil report

China warns recovery threatens energy, emission goals

BEIJING, April 28 (Reuters) - As China’s economy has roared back to life, its goals of increasing energy efficiency and cutting emissions have been compromised, the cabinet said on Wednesday.

The statement by the State Council marks one of the few instances of official concern over the costs of China’s stimulus programme in late 2008, and subsequent rapid recovery. It could mark a return to stricter regulation, especially of polluting industries.

Environmental regulation decreased, lending soared and a number of industrial projects were given the green light during the past 18 months, as China pulled out the stops to offset a sharp drop in international demand for its exports.

Over the past four years, the use of energy per unit of GDP has fallen by 14.38 percent, the State Council said in a statement carried on state television, but this is still far short of the national goal of a 20 percent drop during the five years ending in 2010.

“Especially since the third quarter of last year, high energy consuming, high emitting industries have grown rapidly, and some shuttered production facilities have resumed operations,” said the statement, also published on

“The strong drop in energy intensity has slowed or even begun to rise, and the situation regarding cutting energy use and emissions is grim.”

The statement reiterated a number of targets for cutting overcapacity in polluting industries, including iron, steel, thermal power plants, cement and aluminium.

Last month, the minister of industry and information technology said China would raise environmental and energy efficiency requirements as a way to rein in severe overcapacity in those industries.

Overcapacity has worsened in many of those industries since the crisis, as local governments accelerated lending and approvals of projects in order to keep the economy humming.