Asia can improve its energy efficiency and cut carbon emissions by adopting proven energy-saving technologies, but this has to be supplemented with regulations and market-driven energy pricing to be effective, according to the vice-chairman of the German chemical giant BASF.
Beijing's practice of setting energy prices below those in the free market mean some opportunities had been lost due to poor economic fundamentals, Dr Martin Brudermueller told a luncheon in Hong Kong yesterday.
'If you look at the low energy cost in China, and you take the top one million households in Chongqing and you say you will reduce the air-conditioning cost by 50 per cent, you basically end up with only Euro200 [HK$2,185] of savings per year per household, [which] you could hardly invest in building insulation because it simply doesn't pay off,' he said.
BASF is working on several projects to provide insulation materials for mainland buildings that help cut heating and air-conditioning demand, the biggest of which involves 1.2 million apartments owned by PetroChina, covering 50 million square metres of floor space.
Brudermueller says up to 60 per cent of energy consumption can be cut with retrofitting. In addition to insulation, energy can be saved by treating floors to make them reflect heat, and pigments can be added to building materials to reflect infrared lights - even if the materials are black.
He said China's energy consumption per square metre of floor space is two to three times higher than that in the European Union.
In transport, plastic vehicle parts are increasingly being used to replace steel, to lighten vehicles and improve fuel efficiency, he said.
But Brudermueller said it took time to prove their sturdiness and to persuade carmakers to adopt them.
He also saw opportunities for China to improve the materials used in housing and infrastructure. 'The quality of most of the housing in China is so lousy, it looks nice for a few years and then it goes down very fast. This is partly to do with using the wrong materials,' he said.
Some infrastructure projects, while completed quickly, have used materials with shorter life spans. This will cost the owner more to repair and replace in the long term, he added.
Mainland firms are increasingly using domestic innovations rather than imported ones to improve energy efficiency, he noted. This is creating market opportunities based on a greater awareness of energy efficiency, which outweighs the threat that domestic companies are posing to foreign players.
The energy savings that can be achieved with retrofitting, such as installing better insulation and treating floors to make them reflect heat