A new report by the US Energy Information Agency (EIA) has indicated China’s coal consumption has slowed following almost a decade of fast expansion. A changing GDP, a reduction in economic growth, industry restructuring and new energy and environmental policies are reported to have all contributed to the slow down in consumption as well as also contributing to increasing centralised and cleaner uses of coal.
According to the EIA, in 2013, the service sector share (47%) of GDP surpassed the industry sector share (44%) for the first time in Chinese history and then increased to 48% in 2014.
The EIA indicated that policies to accelerate the development of service industries are likely to continue the transition away from industry, in particular heavy manufacturing. As heavy manufacturing becomes less prominent, growth in coal consumption is expected to weaken. Industry restructuring has reduced energy demand growth from coal-intensive industries, such as steel, cement and fertiliser as industry growth slows and processes become more energy efficient.
The EIA explained that the Made in China 2025 blueprint, announced by the State Council in May 2015, is China's first action plan to update manufacturing through information technology and other innovations. This could increase reductions in energy intensity and changes in energy consumption patterns, if successfully executed.
New regulations and policies are in place to limit the use of coal in coastal China, to upgrade the nation's coal-fired power generation fleet, and to accelerate the increase of alternative energy technologies. Additionally, standards are in place for existing and planned coal-fired power plants to adhere to adopting advanced coal technologies.
The EIA reported China's Energy Development Strategy Action Plan (2014-2020) set required limits on annual primary energy and coal consumption until 2020 as well as targets for reducing coal's share in primary energy consumption to 62% and for increasing nonfossil energy's share to 15% by 2020 and to 20% by 2030.
The EIA concluded that China’s long-term coal usage would depend on the country’s energy demands. Coal consumption could increase if sufficient alternatives cannot meet energy demands.
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