China Energy >> Industry >> Industrial Energy Efficiency >> Voluntary Agreements

Industrial Energy Efficiency

We have been working with China for several years to explore options for industrial energy efficiency policies, focusing on programs that were effective in other countries and would be suitable for the increasingly market-based industrial sector in China.

Of these, most of the 1990s programs were primarily voluntary (exceptions are Netherlands and Denmark), while many of the 2000s programs ensure participation through implied or explicit threat of future regulation and/or association with energy or carbon taxes. Emissions trading is a component of 5 programs: Canada, France, New Zealand, Switzerland, and UK.

Iron & Steel Plants Pilot Projects

With China's selection of Voluntary Energy Efficiency Agreements for Iron & Steel plants in Shandong province as the pilot, the LBNL team used the BEST tool to benchmark two plants. On this basis, the plants agreed to an efficiency target, and the province responded with both technical assistance, financing arrangements, and public recognition.

The pilot encompassed two major plants in Shandong, Jigang and Laigang. Both were already better than the China average, which varies widely because of the mix of small and large plants in many dispersed locations. Both plants agreed to increase their efficiency efforts based on actions identified with the BEST benchmarking tool to achieve by 2005 a level of efficiency equal to the advanced international level in 2000. A recent performance review showed that both plants were well on their way to achieving these targets.

The experience in this pilot laid the foundation for the expansion of this approach to the national iron & steel sector, as well as to the petrochemical sector, with support of the EUEEP under the GEF, starting this year.

This graph illustrates the reductions that would be achieved in energy intensity under the voluntary agreement program for Jigang and Laigang steel mills, and how these reductions compare the average across China and the international average.

Other VA Programs in China