The Chinese government has approved an ambitious plan to reduce the country’s reliance on coal and the intensity of its energy use by 21 per cent by the year 2015.
The plan says the 12th five-year plan—a official blueprint for social and economic development targets— recognises that traditional high energy intensive industralisation is no longer sustainable and the country must embark on a path to develop an energy efficient industrial structure.
‘‘Industrial development based on investment, export and energy use is not sustainable. We must focus on quality growth and use energy intensity reduction plan as the new focal point to spur further growth,’’ says the new plan.
The Chinese government has ordered steel industry—the largest in the world and the most important consumer of Australian iron ore—to phase out its inefficient mills and shut down its old and low tech furnaces.
The directive has also made it clear that Beijing intends to arrest the growth of steel industry and encourage better recycling of steel and iron products.
Beijing estimates that the country will be able to reduce its coal consumption by as much as 670 million tonne by 2015.
This plan came as Ross Garnaut, Australia’s leading climate change and China expert warned yesterday in Melbourne that the Chinese demand for Australian coal could decline.
‘‘Coal use [in China] has hardly increased at all despite the growth in the economy,’’ Professor Garnaut said. ‘‘That is contributing to a surplus of coal in China and internationally, and putting big downward pressure on prices, with implications for Australia.’’
Coal is Australia’s second most important export earner after iron ore and China is the second largest market after Japan.