China to cut energy use per unit of GDP by 3% in 2025

BEIJING - China plans to reduce the amount of energy it uses to grow its gross domestic product (GDP) by around 3 per cent in 2025.

That target is slightly higher than the goal of minus 2.5 per cent it set in 2024, but below the actual result of minus 3.8 per cent for the year.

The country is targeting overall GDP growth of around 5 per cent in 2025. 

Beijing did not set a target for reducing emissions per unit of GDP in its main government work report, released at the National People’s Congress on March 5.

The so-called intensity targets are among the most prominent signals Beijing sends to reinforce its longer-term objectives of peaking emissions by 2030 and reaching net-zero by 2060. 

A 3 per cent drop would leave China on track to miss the energy intensity target it set in its five-year plan, which covers the period from 2021 until the end of 2025.

There are myriad reasons for that, from a push on exports to help the economy recover from the Covid-19 pandemic, to an emphasis on high-end manufacturing. 

“Despite the record expansion of renewables, an inconvenient truth is that China’s economy hasn’t become much more energy efficient in recent years,” said Ms Zhe Yao, global policy advisor at Greenpeace East Asia.

“This has offset some of the decarbonisation effects of renewable technology deployment, constraining China’s climate performance.”

The energy-intensity figures would look even worse were it not for a rule change in late 2022 that meant China no longer took account of renewables or energy used as industrial feedstock, such as coal converted into chemicals.

That reduced how much energy was counted, making the target easier to reach. 

For example, in 2023, total energy consumption grew 5.7 per cent, faster than GDP growth of 5.2 per cent. But energy consumption per GDP under the new formula actually fell 0.5 per cent. 

Starting in 2026, the government will set aside energy intensity as a metric altogether.

Instead, for the next five-year plan from 2026, the main objective will be reducing emissions intensity, with a secondary goal for overall emissions.

From 2031, overall emissions will become the primary target, with emissions intensity secondary. BLOOMBERG