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China Official:Difficult To Meet Energy Conservation Target


16:45 EST Sunday, January 14, 2007

BEIJING -(Dow Jones)- China will face difficulties in achieving its yearly energy conservation target of 4% in 2007 after missing it in 2006, said a senior government official Saturday.

The government was embarrassed by missing last year's goal, and it is becoming questionable whether it can meet its long-term objective of achieving a 20% reduction in energy consumption per unit of gross domestic product by 2010.

"It's hard for China to meet the goal this year, but the central government is determined to reach it," Xu Dingming, vice director of the State Energy Office under the State Council, told reporters on the sidelines of an industry conference in Beijing.

The government is considering carrying out a series of measures this year to enhance efficiency of energy conservation and development of renewable energy to replace fossil fuel.

The measures will encourage limited use of air conditioners and heating in buildings, he said, without elaborating.

The government also plans to give financial support to the renewable-energy sector, including further cuttting of the value-added tax for wind-power generation companies, which already have enjoyed a 50% cut in the tax, Hu Jinglin, director of the economic construction department under the ministry, said Saturday on the sidelines of the same conference.

The China New Energy Chamber of Commerce, an association of local private companies, plans to set up a fund to support development of such companies in wind, solar and bio-mass sectors, aiming to collect CNY10 billion ($1.28 billion) in coming years, said Li Hejun, chairman of the chamber.

While China missed its target for cutting energy use last year, it hasn't yet announced the change in energy consumption per unit of GDP for the full year. In the first half of last year, China recorded a 0.8% on-year rise in energy consumption per unit of GDP.

-Renya Peng contributed to the story, Dow Jones Newswires; (8610) 6588 5848; [e-mail]


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