Workers at a power supply company check equipment for distributed photovoltaic power generation at a manufacturing company. The new technology is used for energy conservation.

 

A report released recently in Beijing found that energy consumption by Chinese enterprises has been increasing annually due to rapid economic development in the years that have passed since the reform and opening-up. In order to balance economic development, energy conservation and environmental protection, the report recommends that taxes for environmental damage and energy consumption be levied on high-consumption, high-pollution enterprises.
 

In 2009, China became the world’s biggest energy consumer. According to official statistics, the country’s total consumption of energy in 2014 was around 3.84 billion tons of standard coal, up 2.3 percent from the previous year, while the growth rate of energy consumption was down 1.4 percent from 2013.

In 2014, China’s consumption of primary energy accounted for 23 percent of the world total, exceeding the US by 5.2 percent. In 2014, secondary industry was responsible for 73.6 percent of total electricity consumption in the country, while residential consumption only accounted for 12.54 percent.
 

As in years past, the report found that eight industries are responsible for the majority of energy consumption: coal mining and washing; petroleum processing, coking and nuclear fuel processing; chemical raw material and chemicals manufacturing; non-metallic minerals manufacturing; ferrous metal smelting and calendaring; nonferrous metal smelting and calendaring; electric and heating power production and supply, and transportation, storage and postal services. Together, these industries accounted for 63 percent of the total.
 

Of the eight industries, ferrous metal smelting and calendaring consumed the most energy, and its energy use is growing at the fastest rate. According to the report, these industries will continue to be the major energy consumers for the near future.

The report also predicts that China’s demand for energy will increase at a fast speed. Therefore, it recommends penalizing high-consumption and high-pollution enterprises so that damage to the environment will increase production costs and incentivize energy conservation and emissions reduction. This is a common practice in foreign countries, according to the report.
 

Enterprises—especially in the manufacturing sector—are the major drivers of China’s economic transformation and upgrading, according to the report. It argues that the green development of enterprises is essential to China’s sustainable development.

In this respect, the report proposes improving the industrial structure of enterprises, renovating and upgrading traditional industries, and fostering modern industries to improve environmental quality and increase energy efficiency. A number of innovative enterprises with their own intellectual properties and own brands should be formed. New supply chains and value chains should be created through integrating modern service industries and manufacturing to enhance the efficiency and quality of industrialization, according to the report.
 

The report suggests specific measures, such as encouraging enterprises to develop and promote green technology, building a system of relevant standards, and setting up related agencies and service institutions. It also recommends that authorities and enterprises set up mechanisms and establish venture funds to encourage innovation in green development.

The report also constructed an evaluation index for the green development of Chinese enterprises according to three dimensions, including green management, green products and technology, as well as energy saving and environmental protection performance.
 

The Blue Book of Enterprise: Annual Report on Green Development of China’s Enterprises No. 1 (2015), was produced by the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, Urban Planning Institute of the China Academy of Social Science (Beijing), the Economic Information Daily, and Green-Capital.Cn, and published by Social Sciences Academic Press.