China has claimed big gains in energy efficiency for 2016 despite coal and steel production that covered cities in smog during the second half of the year.
Official figures from the National Bureau of Statistics (NBS) have offered a murky mix of partial data, unexplained results and apparent discrepancies in accounting for the country’s energy use in a year of lower economic growth.
In its statistical communique released this month during China’s annual legislative sessions, the NBS said that energy use per unit of gross domestic product dropped by a substantial 5 percent last year, although several key indicators rose.
The measure of energy intensity fell almost as much as the 5.6-percent improvement recorded for 2015. But electricity consumption increased by 5 percent in 2016 compared with a much weaker gain of 0.9 percent a year before, according to the National Energy Administration (NEA).
The numbers pose a puzzling question with several implications for China’s economy and the environment.
How could the country have made such an advance in energy efficiency at a time when power consumption climbed by such a large amount and GDP grew by 6.7 percent, the slowest pace in 26 years?
Other energy figures from the NBS may only add to the mystery.
According to the official data, consumption of crude oil also rose 5 percent and natural gas increased 8 percent, but coal use fell 4.7 percent in a big decline for China’s main fuel.
The reported reduction in coal use for the third year in a row has been hailed by environmentalists, raising hopes that consumption may have peaked in 2013.
On March 17, the Paris-based International Energy Agency (IEA) credited China’s reduction in coal demand for helping to avoid an increase in global greenhouse gas emissions for the third consecutive year.
China’s carbon dioxide (CO2) emissions fell 1 percent in 2016, while U.S. emissions were down by 3 percent, the IEA said.
The major drop in coal consumption accounts for China’s official calculation that total energy use rose by only 1.4 percent, far less than GDP, allowing the NBS to claim greater efficiency.
Source of confusion
But the coal numbers by themselves have been a source of questions and confusion.
In reporting the percentages for coal, oil and gas, the NBS has provided no actual tonnage or volume figures, making the rates impossible to check or compare.
In an analysis, the environmental group Greenpeace cited conflicting readings of the data on China’s low-quality coal.
While the NBS reported a 4.7-percent drop in coal use based on undisclosed tonnage, it also claimed that coal’s share of total energy use fell from 64 percent in 2015 to 62 percent last year.
The share numbers imply that coal consumption fell 1.3 percent based on the energy content of the fuel rather than physical tonnage, Greenpeace calculated.
“The difference can be due to either a major improvement in coal quality or data discrepancies,” the Greenpeace analysis said.
The NBS has not explained why it reported percentage figures without the tonnage or volume details.
The uncertainty casts doubt over the validity of the efficiency figures.
The NBS estimates may also be in conflict with what actually happened in the coal market last year.
Government agencies have acknowledged missteps in pursuing cuts in coal production overcapacity too aggressively last year, leading to sudden shortages and a price spike before the winter heating season began.
After berating coal companies for moving too slowly on closing excess mining capacity, the National Development and Reform Commission (NDRC) reversed course and authorized more production as supplies ran low and prices climbed by more than 70 percent.
Similar moves in the steel industry spurred smelters to restart idled production as price incentives took hold, adding to coal demand and urban smog.
While the effects on market prices and air quality were evident, official reports of coal production and consumption continued to show declines.
A study released by Greenpeace’s East Asia affiliate in February found that publicized cuts in the steel industry included previously-closed plants. Production capacity actually rose as smelters reopened to profit from higher prices, the study said.
Inspectors from the Ministry of Environmental Protection (MEP) and the State Administration of Work Safety (SAWS) have reported numerous violations by manufacturers operating in spite of shutdown orders.
Doubts about estimates
Although actual coal use is hard to quantify from such anecdotal evidence, the reports also raise doubts about NBS estimates that coal production last year fell by a whopping 9.4 percent.
If production had declined at double the rate of the drop in consumption, it would imply much tighter supplies.
China energy experts have been unable to substantiate the official figures.
“Those coal consumption numbers certainly don’t make sense on the surface, and I’m not completely sure how to interpret them,” said David Fridley, staff scientist for the China Energy Group at the Lawrence Berkeley National Laboratory in California.
“Nor can I account for the source of the decline. Cement, steel and thermal power were all up in 2016, and they were the main sources of decline in 2015,” said Fridley by email.
Fridley noted that the NBS communique is a “flash,” or early, estimate and may be subject to revisions.
He also suggested that coal consumption could have fallen in sectors and uses such as district heating that have yet to be reported, although the frequency of winter smog alerts argues otherwise.
“I guess the only thing for certain is that China reported another year of coal consumption decline—period,” said Fridley.
And there is an additional problem, in that the regions in China cannot always be relied upon to send truthful statistics to the Central Government.
What is clear is that the Chinese Communist Party only has the interests of the country, and ultimately itself, at heart, and will do all it can to further them.