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Address by H.E. Ambassador Yang Yanyi, Head of the Chinese Mission to the EU at the Conference of the College of Europe's European Energy Policy Chair
2014/04/24
 

Distinguished guests,

Ladies and Gentlemen,

At the outset, I wish to congratulate the College of Europe for organizing such an important event where sector experts, senior officials, stakeholders, policy makers and young and well-trained graduates of the College of Europe have the chance to engage in meaningful discussions about cooperation and policy responses in the energy field.

It gives me particular pleasure to be back to the College of Europe, where just a few weeks ago President Xi Jinping of China delivered a very important speech and was warmly welcomed by the students and faculty of the College.

The conference comes at an opportune time as the EU and its partners, including China, are striving for stable, sustainable and sound growth. Energy by all means is a sector crucial for sustaining economic vigor.

To fully appreciate the importance of enhancing cooperation on energy, it would be worthwhile to take an overview of the changes and challenges in the energy sector in a wider global context. As it is impossible to do justice to the subject in a short address like this, I will limit myself to some of the mega-trends in the energy sector of China.

First, with China's economy entering a new stage of improving quality and performance and restructuring growth model from energy-and labour intensive one to a capital-and technology-intensive one, the growth of China's energy demand will slow down. Though, as predicted by some experts, by 2030, the world's energy supply will be much the same while demand will keep growing, partly due to industrialization of emerging economies. China and India are expected to account for half of the world's energy consumption.

Second, China has intensified efforts on energy conservation. Over the past years, China's energy consumption per unit of GDP has come down by 21%, and its energy intensity will be cut by a further 16% by 2020. This year, China aims to cut energy intensity by more than 3.9%, and the emissions of sulfur dioxide and chemical oxygen demand will both be reduced by 2%.

Third, China takes development and utilization of new and renewable energy a key strategic measure for achieving secure, green and efficient system of energy production and consumption. Now China ranks the first in the world in terms of installed hydropower and wind power generation capacity. China will continue to raise the proportion of electricity generated by non-fossil fuel, develop smart grids and promote balanced distribution of energy resources, encourage the development of wind and solar power and biomass energy, start construction of a number of hydropower and nuclear power projects and strengthen exploration, exploitation and utilization of natural gas, coal seam gas and shale gas. By 2020, the share of non-fossil fuel in China's total energy consumption will reach 15%.

Fourth, China attaches great importance to scientific and technological innovation to build a resource-conserving and environment-friendly society. The first National Energy Technology Programme issued in 2011 outlined four key aspects of China's energy technology improvement, namely exploration and exploitation; processing and conversion; power generation, transmission and distribution; and new energy. We have speeded up development and utilization of low-carbon, and environmentally friendly technologies and products and strived to turn energy conservation and environmental protection industries into dynamic sunrise industries.

Fifth, China is quickening the pace of ecological and environmental protection. The plan for preventing and controlling air pollution has been set in place. We mainly focus on mega cities and regions with frequent occurrence of smog through improving industrial structure, raising energy efficiency, reducing vehicle exhaust emissions, and preventing and monitoring wind-borne dust. This year, 50,000 small coal-fired furnaces will be shut down. Desulphurization in coal-burning power plants with production capacity of 15 million kilowatts, denitrification in plants with 130 million kilowatts of production capacity, and dust removal in those with 180 million kilowatts of production capacity will be carried out. We have also conducted reforms on pricing of resource products and established a system of tiered pricing for household water and gas consumption.

Having said the above, to achieve "secure, green and efficient" system of energy production and consumption, we have yet to get to grips with many daunting challenges.

For one thing, with acceleration of industrialization and urbanization and upgrading of living standards, China's energy consumption will continue to rise, bringing a growing constraint on resources.

For another, our dependency on foreign suppliers of oil and natural gas is still very high. By 2030, as much as 75% of China's oil might be imported, and our dependency on overseas natural gas will also see rapid rise. This high dependency on external energy supply coupled with safety of energy transportation routes and fluctuations in the international energy market has compounded concerns over energy security.

Apart from that, China's industrial structure is yet to be rationalized. Till now, China's energy consumption per unit of GDP is much higher than those of the developed countries and some newly industrialized countries. Energy consumption of four major energy-intensive industries-steel, non-ferrous metals, chemicals and building materials-account for 40% of the national total.

Last but not least, with fossil energy continues to dominate China's energy consumption mix for a long time to come, extensive development of fossil energy, particularly coal will continue to pose serious challenge to environmental protection. 

In short, like Europe, China is confronted with the dual challenge of stimulating the growth needed to provide jobs and well-being of its 1.3 billion people, and of ensuring that the quality of this growth leads to a sustainable future.

To tackle these challenges and turn them into opportunities, China is working on two fronts, or metaphorically speaking, walking on two legs. One is to rely on itself to meet the demand of energy supply and to push forth fundamental transformation of economic growth model. Another is to take an active part in international cooperation. Transition toward a green economy calls for concerted global effort. China's vision for high-quality growth, low consumption of resources, and clean, secure and sustainable development can only be realized through close cooperation with the rest of the world.

In this connection, it is heartening to note that since establishment of China-EU relations four decades ago and especially since this relationship was elevated to Comprehensive Strategic Partnership more than 10 years ago, cooperation on energy has been an important area of China-EU mutually beneficial cooperation.

China-EU 2020 Strategic Agenda for Cooperation issued by the 16th China-EU Summit last November, the Joint Statement on Deepening China-EU Comprehensive Strategic Partnership for Mutual Benefit and China's Second Policy Paper on the EU issued early this month all acknowledged the shared objectives of China and the EU on energy security and the importance of enhancing China-EU practical cooperation on energy efficiency and energy security and the pursuit of sustainable development through, inter alia, the development of clean and renewable energy resources.

Guided by our common vision and the blue-print for cooperation, China stands ready to join hands with the EU in a number of key areas, on the basis of common interest and mutual benefit:

             ·Conduct intensive dialogue within such frameworks like China-EU Steering Committee, China-EU Innovation Cooperation Dialogue and China-EU Energy Policy Dialogue, to promote communication and coordination on energy related matters, and jointly formulate and implement energy strategy.

·Deepen scientific and technological cooperation in the field of energy, promote R&D and cooperation on reducing energy consumption, emissions and clean technology.

·Promote cooperation on the peaceful use of nuclear energy.

·Improve coordination on the International Thermonuclear Experimental Reactor Project and other large international science projects.

·Continue to make use of carbon capture and sequestration technology to achieve near-zero emission in demonstration coal-based power stations.

·Join hands to establish China-EU technological cooperation network or joint research base and foster a China-EU industry alliance on strategic emerging industries such as renewable energy, digital information, advanced manufacturing and nanotechnology based on the industrial cluster of the China-EU High-tech Park.

·Further promote China-EU Partnership on Climate Change. Deepen exchanges within the framework of China-EU Ministerial Dialogue on Environmental Policy and its coordinators' meetings.

·Expand pragmatic cooperation on low-carbon development, market schemes, low-carbon urbanization and capacity building, atmospheric pollution, biodiversity, ecosystem conservation, natural gas infrastructure, new energy, smart grid, power grid safety regulation and energy strategy modeling.

·Encourage friendly exchanges between Chinese and European non-governmental environmental organizations and businesses of the two sides to enter each other's environmental markets through fair competition.

·Make further progress in China-EU joint participation in third-party energy cooperation.

·Step up policy coordination on energy security, supply security and stability on the international arena. Promote the building of an open and efficient international energy market with fair competition; facilitate the establishment of a rational energy pricing system and sustainable world energy development.

I wish to underline here that urbanization has the greatest potential for driving China's domestic demand and it is also where the huge potential of China-EU energy cooperation lies. During the 12th Five-Year Plan period, China's urbanization rate will rise by about four percentage points, which means over 50 million people will move from rural areas to cities and townships. China's energy conservation and environmental protection sector will grow to around 15 trillion RMB in output value, providing a broad market for the development of new energy and great potential for the development and application of renewable energy in both urban and rural areas.

It will be to the benefit of both China and the EU that the two sides draw on each other's strengths and bring greater synergy between EU's rich experience and best practices in urbanization, renewable energy, energy conservation and environmental protection and its strong edge in energy science and technology with China's drive for urbanization, new energy, energy conservation and environmental protection.

In conclusion, in a deeply interdependent world, China-EU partnership is ever more important to address the common challenges that we face. That China-EU relations have come a long way bears testimony to the fact that as two strong forces for peace and stability, two most important major economies and two great civilizations, China and Europe are able to build on the firm foundations of their partnership, and further intensify their cooperation including in the energy sector in pursuit of a shared peace, prosperity and progress.

Believing in the future of the dynamic China-EU comprehensive strategic partnership, I also believe that the thought provoking engagement such as the conference of the College of Europe's European Energy Policy Chair will also contribute to maximizing its potential in the shared interest of the people of China and citizens of the EU.

With that, I wish you all a successful conference. Thank you very much.

 

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