New | China caps coal consumption at 5 billion tonnes by 2020 amid fears energy demand may rebound

China has introduced its first limit on annual energy consumption in a five-year plan – by capping total consumption of standard coal at 5 billion tonnes by 2020 – up on 2015’s use of 4.3 billion tonnes.

Experts says the relatively loose and conservative move shows that the government is concerned about energy demand rebounding.

The nation’s 13th five-year plan, released on Saturday, also revealed that energy intensity – the consumption per unit of economic growth – would be cut by 15 per cent compared with 2015 levels, while carbon emissions per unit of economic growth would drop by 18 per cent compared with 2015’s levels.

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“It shows policymakers are concerned about a rebound in energy demand as China has yet to complete its industrialisation and urbanisation,” said Lin Boqiang, director of Xiamen University’s China Centre for Energy Economics Research.

Lin said energy consumption had been increasing at a slower pace over the past few years because of the economic slowdown, but the rate could still pick up in the coming years.

China’s total energy consumption rose by only 0.9 per cent in 2015 compared with 2014 – the lowest increase since 1998 – according to the most recent data from the National Bureau of Statistics.

Yang Fuqiang, a senior adviser at the environmental group, Natural Resources Defence Council, said the cap of 5 billion tonne had been calculated using figures including upper end of the GDP target – a 7 per cent growth rate – and the target of a 15 per cent drop in energy intensity over the next five years.

However, the drop in energy intensity by 2020 was almost certainly going to be steeper than the target as China’s heavy industries – iron and steel, cement – had already lost steam as a result of shrinking demand, both domestically and abroad, Yang said.