According to the latest data in BP’s “Statistical Review of World Energy 2011”, China is now the world largest consumer of energy. In 2010, China consumed 20.3% of the world’s energy, ahead of the US, which consumed 19.0% and the EU at 14.4% (see chart attached). China also accounted for nearly two-thirds of growth in total energy consumption last year.
In comparison, South Africa consumed 1% of world energy in 2010. While 1% sounds incredibly little, it does imply that SA is relatively energy intensive by world standards.
Within China, coal is the main energy source, accounting for about 70% of primary consumption in 2010. While the country has the third-largest global reserves of coal, its domestic supplies have not been able to keep up with the growing demand, accounting for 48% of the global coal consumption. China was a net exporter of coal until 2007, but is set to overtake Japan this year as the world’s largest importer (SA could benefit more if the domestic infrastructure was better).
Furthermore, with much of China’s domestic coal resources located in the North-central inland part of the country and the major industrial demand located along the South-eastern coastal area, high transport cost means many industries in China are increasingly seeking overseas coal supplies.
Coal accounts for more than 80% of pollutant emissions in China.
Oil plays a smaller role in China, accounting for only 18% of energy consumption, compared to 37% in the US. However, imports of oil rose to 55% of total consumption in 2010, mainly because of limited domestic oil reserves and strong demand. China’s dependency on oil imports have surpassed the US for the first time. In other words, China is more dependent on oil imports than the US. (This dependency is nothing like Japan, which is over 90%).
Energy intensity in China, measured as energy consumption per unit of GDP, has been declining continuously. However, energy intensity in China is still 2.7 times as large as in the US and 4.5 times as large as Japan’s. This reflects the differences in the structure of the respective economies. For example, in 2010, China produced nearly two-thirds of global pig iron, about half of global cement and steel and 41% of global aluminium.
China’s 12th Five-Year Plan for 2011-2015 that was announced in March calls for reducing growth in energy consumption to an average of 4% to 3% per year from 9% in the previous ten years. Part of the reduction is because the Chinese authorities have lowered the target rate of real GDP growth, which is now expected to average 7% per year over the next five years. In addition, energy intensity is to be reduced by 16% during the same period. While this is welcome goal, it is unclear how it will be achieved?
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