China’s Industrial Sector in an International Context

The industrial sector accounts for 40% of global energy use. In 1995, developing countries used an estimated 48 EJ for industrial production, over one-third of world total industrial primary energy use (Price et al., 1998). Industrial output and energy use in developing countries is dominated by China, India, and Brazil. China alone accounts for about 30 EJ (National Bureau of Statistics, 1999), or about 23% of world industrial energy use.

China's industrial sector is extremely energy-intensive and accounted for almost 75% of the country's total energy use in 1997. Industrial energy use in China grew an average of 6.6% per year, from 14 EJ in 1985 to 30 EJ in 1997 (Sinton et al., 1996; National Bureau of Statistics, 1999). This growth is more than three times faster than the average growth that took place in the world during the past two decades. The industrial sector can be divided into light and heavy industry, reflecting the relative energy-intensity of the manufacturing processes. In China, about 80% of the energy used in the industrial sector is consumed by heavy industry. Of this, the largest energy-consuming industries are chemicals, ferrous metals, and building materials (Sinton et al., 1996).

This paper presents the results of international comparisons of production levels and energy use in six energy-intensive subsectors: iron and steel, aluminum, cement, petroleum refining, ammonia, and ethylene. The sectoral analysis results indicate that energy requirements to produce a unit of raw material in China are often higher than industrialized countries for most of the products analyzed in this paper, reflecting a significant potential to continue to improve energy efficiency in heavy industry. It should be noted however, that data availability limit the ability to conduct in-depth analysis in some sectors.

The international comparisons made in this paper follow the methodological recommendations from two workshops and a handbook on international comparisons of industrial energy efficiency (Martin, 1994; Phylipsen et al., 1996; Phylipsen et al, 1998). These comparisons can be used to analyze differences in trends between countries as well as to identify opportunities for efficiency improvement. We first compare physical production levels for the six major commodities produced in the analyzed subsectors. Second, we compare the energy intensity, defined as the energy used per tonne of commodity produced. This measure, which we call the specific energy consumption (SEC), is influenced by the production processes used, the type of product produced, and the energy efficiency of the production process. For sectors for which we have adequate data (iron and steel, pulp and paper, cement), we compare the average SEC in each country to the "best practice" SEC. Best practice SEC is calculated assuming that the same mix of products are produced using existing best practice technology.