China to Cut Dependence on Coal for Energy as Smog Chokes Cities

China plans to cut its dependence on coal as the world’s biggest carbon emitter seeks to clear smog in cities from Beijing to Shanghai.

The nation is aiming to get less than 65 percent of its energy from coal this year, according to a government plan released today. Energy use per unit of gross domestic product will decline 3.9 percent from last year, compared with 2013’s target for a 3.7 percent decrease.

The plan may help President Xi Jinping’s drive to reduce pollution as environmental deterioration threatens public health and the economy. More than 600 million people were affected by a “globally unprecedented” outbreak of smog in China that started last January and spread across dozens of provinces, the Institute of Public & Environmental Affairs based in Beijing said Jan. 14.

“China previously targeted to cut coal consumption to below 65 percent in 2017,” Helen Lau, an analyst at UOB-Kay Hian Ltd. in Hong Kong, said by phone today. “Now they have officially pulled it earlier to 2014, which reflects that they want to speed up restructuring energy consumption and are determined to reduce air pollution.”

China’s coal use accounted for 65.7 percent of its total energy consumption in 2013, the 21st Century Herald newspaper reported Jan. 13, citing an official it didn’t name.

Coal Use

The country’s total energy consumption will rise 3.2 percent to 3.88 billion metric tons of coal equivalent, while output is expected to increase 4.3 percent to 3.54 billion tons, the government plan shows. Coal use will climb 1.6 percent to 3.8 billion tons, while production may gain 2.7 percent to 3.8 billion tons.

The government will encourage imports of high-quality, less-polluting coal and limit fuel with high sulfur and ash content, according to the National Energy Administration plan. Power consumption is expected to rise 7 percent to 5.72 trillion kilowatt hours.

China’s oil demand is forecast to rise 1.8 percent to 510 million tons, while crude output will climb 0.5 percent to 208 million tons. Natural gas demand will increase 14.5 percent to 193 billion cubic meters and production will reach 131 billion, up 12 percent, the NEA said.

— With assistance by Jing Yang, and Sarah Chen

Before it's here, it's on the Bloomberg Terminal.