EIA: China promoting both fuel efficiency and alternative-fuel vehicles to curb growing oil use
13 May 2014
Consumption of gasoline in China grew from 0.9 million barrels per day (bbl/d) in 2003 to more than 2 million bbl/d in 2013, according to figures from the US Energy Information Administration (EIA). This continues a trend of significant growth in China’s transportation sector since the 1990s.
Increasing oil demand is requiring increasing imports; since 2009, China has been importing more than half of its petroleum needs. To counter this trend triggered by China’s rapid motorization, the Chinese government is adopting a broad range of policies, including improvements in the fuel economy of new vehicles and the promotion of alternative-fuel vehicles, EIA notes.
|China vehicle sales and gasoline consumption. Source: EIA. Click to enlarge.|
Under the Energy Saving and New Energy Vehicle Plan for 2012 to 2020 released in 2012, average passenger car fuel economy is targeted to increase to 34 miles per gallon (6.9 l/100 km) by 2015 and 47 miles per gallon (5.0 l/100 km) by 2020.
In its 12th, and current, Five-Year Plan, the Chinese government also launched a new strategy to promote new energy vehicles (NEV; vehicles that are partially or fully powered by electricity) and to support its domestic automobile industry to mass-produce NEVs. The government plans to invest an estimated $15 billion in alternative-fuel vehicles during the next 10 years.
The national target for cumulative production and sales of electric and plug-in hybrid vehicles is 500,000 units by 2015. The NEV target for 2020, originally set at 5 million vehicles, was recently scaled back to 1 million vehicles.
To meet NEV penetration targets, to boost consumer demand, and to make alternative-fuel vehicles more affordable, the Chinese government has been offering many financial incentives, including some $4 billion allocated for energy-saving products, primarily NEV and household appliances.
Additionally, in 2012 the Chinese Ministry of Finance announced it would provide annual subsidies up to two billion yuan ($323.6 million) to support NEV manufacturing. In September 2013, the government announced additional subsidies that will support the growth of new energy vehicle ownership through 2015.
For electric vehicles, subsidies from the central government are often matched by local subsidies. For example, in Beijing, the central government subsidy of 60,000 yuan ($9,700) is matched by a subsidy of equal amount from the city of Beijing. The Shenzhen government offers one of the highest subsidies for electric vehicles in the country—120,000 yuan ($19,400) per passenger vehicle—reducing the price of such vehicles by more than half.
In addition to financial incentives, some cities offer other incentives, including free license plates for NEVs and exemptions from vehicle license plate quota systems. For example, Shanghai (where a license plate can cost as much or more than an entry-level domestically manufactured car) offered free license plates for 20,000 electric vehicles purchased before the end of 2013. Guangzhou offers 12,000 free plates allocated by lottery, and Beijing offers electric vehicles an exemption from the vehicle license lottery, which prospective owners of gasoline-fueled automobiles are required to enter.
Despite incentives, electric vehicles sales to date have been minimal. NEV sales account for less than 1% of total vehicle sales in China, which in 2013 remained the world’s largest vehicle sales market for the fifth year in a row. According to China Daily, as of March 2013, an estimated 39,800 electric vehicles were on the road, approximately 80% of which are used for public transport.
EIA suggests that some of the reasons behind low sales of NEVs to date are high vehicle costs despite government subsidies, inadequate charging infrastructure, limited driving range when compared to conventional internal combustion engine vehicles, lack of a national industry standard for charging connectors, consumer education and acceptance of the new technology, and vehicle safety issues, among others.
Ever wonder why we need the XL pipeline?: Answer: so the oil companies can sell refined products like gasoline to China. XL is not for the American consumer's benefit.
Posted by: Lad | 13 May 2014 at 08:22 AM
Reducing liquid fuels use will also reduce local air pollution in China?
XL pipeline is required to maintain the profit margins of US Oilcos. They in turn will promote the election of the proper leaders to reduce their taxes. The 97% will applaud because liquid fuel taxes will not be increased.
Posted by: HarveyD | 13 May 2014 at 08:41 AM
Keystone XL will replace Venezuelan heavy sour with Albertan bitumen. If the socialist regime in Caracas wants to ship its product to China, let them; Canada is capable of supplying the Gulf coast refineries and keeping that money in N. America, if we let it happen.
Any reduction in air emissions from EVs in China depends on how clean the electricity supply is. Given how much un-scrubbed coal capacity is feeding China's grid, an EV may cause much more local pollution than an ICEV.
Posted by: Engineer-Poet | 13 May 2014 at 08:09 PM
EP - Canada can ship product from their own fields through their own ports to China, and the money will still stay in N America. Just the refineries on the Gulf Coast will not be doing the refining.
Harvey - the 97% will applaud all the "new jobs." That is the 500 jobs that will be created for the next 4 years while the pipeline is being built and then disappear after it is finished.
Posted by: JMartin | 13 May 2014 at 08:17 PM
Question, JMartin and Harvey: are you two amongst the 3% who really know all the dark secrets and the rest of the world operates sadly without your deeper expertise? If so maybe it would be best if you just found something else to do besides comment here since the rest of us will just not heed your exceptional wisdom.
Posted by: Herman | 13 May 2014 at 09:16 PM
Harvey has been posting here for years, you are new here. It is not a good idea trying to tell people what to do. That is the one thing people can tell others to do, keep their egos under control. This site is about Sustainable Mobility.
Posted by: SJC | 13 May 2014 at 09:32 PM
If the site is indeed about Sustainable Mobility, then perhaps a continuous rain of insults or political inferences does not belong, yes?
When the poster clearly states, as Harvey has done, that hospital Emergency Rooms personnel will actively lobby against the safety improvements from autonomous autos because they have an economic interest in carnage, does his seniority as a poster inoculate him from criticism?
I'm not telling Harvey what to do --- I'm just calling out his worst BS because it's annoying.
Posted by: Herman | 14 May 2014 at 01:45 AM
I think the question is can China have a uniquely Chinese approach to low impact mobility.
They can follow the west and make more efficient versions of the cars they/we have now, culminating in electric cars.
However, this doesn't really solve the problem as their electricity is mostly generated from coal, and an electric car takes up as much road and garage space as an ICE car.
Can they get people to use e-scooters or e-bikes (120M people say yes it is said), that would help, or will the roads fill up with cars regardless of whatever else is available.
Even a very small car, like a smart takes a full car width on the road. You need a 2 wheeler to really pack them in, and probably NOT an enclosed 2 wheeler.
So can they come up with a kind of electric scooter that is small, economical and safer than current 2 wheelers.
A "vehicle with Chinese characteristics"
Posted by: mahonj | 14 May 2014 at 04:11 AM
Herman, Don't get me wrong. I am not opposed to nuclear energy, nor am I expert enough to evaluate all the financials. I simply point out what is no dark secret -- that investors are not willing to risk their own money in nuclear energy. Only if Governments take that risk will there be development. Maybe I am wrong, but I don't see any evidence so far.
Posted by: JMartin | 14 May 2014 at 07:22 AM
China does indeed get most of its electricity from coal (currently ~79%) but there's not much they can about that: Even if they began a massive nuclear build out now best estimates are they'd still be at 70-75% coal going into 2030.
About the only things they can do to control their CO2 emissions are carbon sequestration, and investing in negawatts - they need to increase the efficiency of their energy use. Electric cars DO use energy more efficiently than ICEVs.
Posted by: ai_vin | 14 May 2014 at 08:54 AM
Remember, China started a research push into molten-salt reactors in 2011, and escalated that to a wartime-level effort just this year. The goal is to have something in 10 years, meaning 2024.
MSRs run hot enough to produce steam at coal-boiler temperatures and pressures. By 2030, China may be doing drop-in replacements of coal boilers with mass-produced modular molten salt reactors.
Posted by: Engineer-Poet | 14 May 2014 at 10:15 AM
Electric-assisted bikes is non-polluting and consumes very little energy, while does allow people the chance to exercise. Dedicated bike-lanes and overhead bikeways that can even go through buildings and over rooftop of houses can allow a biker to "boldly go where no car has gone before!" Put an enclosure around the overhead bikeways and one can ride bikes anytime of the year and in any weather condition! In car-restrict cities in China, this would be a way to go, leaving cars for the suburbs.
Posted by: Roger Pham | 14 May 2014 at 04:07 PM
Installing a ($8+B) 1900+ Km, wide diameter pipeline from Alberta to Texas, to feed existing refining facilities with lower cost Alberta Oil ($83/barrel instead of $102/barrel), in order to export the refined products, will mostly benefit USA's refiners, NOT the American fuel users.
A 900 Km pipeline from Alberta to the Pacific Coast to export to Asia would get higher prices for Alberta's oil and create more jobs in Canada.
Posted by: HarveyD | 14 May 2014 at 04:58 PM
You know, we could help the Chinese lower their CO2 emissions. A major part of their energy consumption is in the factories that produce cheap junk for export: If we "think globally and buy locally" they wouldn't need to burn as much coal. We can produce the same goods with lower pollution & GHG emissions because our energy supply is already cleaner.
Oh and yeah, THAT would create jobs here as well.
Posted by: ai_vin | 15 May 2014 at 07:50 AM
Good idea ai_vin but it may not happen as long production cost is much lower in China than in USA and Canada.
If you look around the house you may note that almost 100% of small electrical appliances we use are made in China. The same applies to TVs, phones, cell-phones, batteries, fans, flash lights, light fixtures, steam irons, mixers, light bulbs, computers, PC Displays, routers, MODEMs, tablets, UBS keys, DVDs, Blue rays, electronic thermostats and thermometers, movement sensors, fire alarms, cameras and security systems, pencils, pens, toys, hand tools, cables, utensils, tableware, decorations, cars parts, tires, etc to name a few.
During my last trip to China a bought 12+ top Brand name silk ties at about $1 each. The same ties sell for $30 to $50 in the locals stores. The same applies to shirts, socks, underwear, sweaters, silk scarves, etc.
The price difference is so large that those items will not be produced locally soon unless we want to survive with ONE EACH?
Posted by: HarveyD | 15 May 2014 at 09:45 AM
Manufacturing is re-shoring from China back to the USA. Supply-chain difficulties and quality issues are big drivers. I just read an article which featured Generac's shift back to Wisconsin from China. The big factor is productivity: automation allows a US worker to do in 1 man-hour what the Chinese did in 4.
Of course, this also means that the Wisconsin plant employs only a fraction of the workers it did before off-shoring to China. We make more with fewer people.
The real take-home from this is that we don't need immigration to fill jobs. We don't need immigration, period.
Posted by: Engineer-Poet | 15 May 2014 at 10:49 AM
Canada takes in about 300,000 immigrants a year (almost 1% of the current total population) and many low paying employers like MacDonald, Walmart, Target, Reno Depot, Home Depot, Canadian Tire, most farmers, road builders, construction firms etc + Fed and Prov governments want even more.
For many, immigrants are a source of essential cheap labor to keep the economy afloat.
OTOH, countries like Norway, Sweden, Switzerland, Japan etc have stable economies and high living standards with very little immigration.
Posted by: HarveyD | 15 May 2014 at 01:24 PM
The point is that before Deng Xiao Peng's time, China hardly exported anything and the rest of the world were doing just fine, much less pollution and much less CO2 released. The air in China was a lot cleaner and there were far fewer cancers and lung and heart diseases in China! I'd bet that the Mercury level in the ocean was a lot lower back then, too!
Do we need to change PC computers every 4 years like Microsoft wants us to? Nope. Most of our 15-17 yr old PC's have been running fine, was updated from Win 98 to Win 2k and kept humming ever since. These were bought used for ~$150 12-14 years ago and most are still running. The best kept secret was that Win 2k was the most stable and least vulnerable OS to viruses and attack...and too bad, the whole IT industry did a planned obsolescence on it, and now with Win XP (more ergonomic but less secure! than Win 2k. Electronic wastes are very damaging to the environment, besides the wastes created from mining rare earth elements and the coal burned to make them and all the bunker oil used to transport them 10,000 miles from China to here! Do we need to change smart phones every 2-3 years? Or TV set...or whatever?
Without imports from China, we will be keeping a lot more old stuffs and they will be running just fine, and more workers in the West will get to keep their jobs and the environment will be a lot cleaner and we will have much more time to deal with the looming Global Warming disaster that no doubt is greatly accelerated by the China's mad rush to burn coal like there is no tomorrow! In Cuba, they are still driving American cars made in the 50's...
I agree with ai vin. The best way to clean up China's pollution is to assess environmental tariffs on all imported goods from countries with lower environmental quality than the USA, and to get other countries to do the same. This is a way to level the playing field economically and environmentally, to avoid a race to the bottom in which we all will lose! Tariff-free free-trade zone will be set up among countries with comparable environmental quality to promote economic growth and diversity of products and competition.
Posted by: Roger Pham | 15 May 2014 at 09:30 PM
Yes, we transferred loads of pollution to China when we transferred manufacturing facilities to get cheaper goods.
Posted by: HarveyD | 17 May 2014 at 09:34 AM
@RP...sometime, we do not have a choice. A gave up on my 10-year old custom built super PC because it was too slow and too costly to upgrade (again). My new (Chinese Lenovo) Touch 27-inch AIO with the latest Intel i7 (4th generation) CPU handles W-8.1 with ease and speed. The touch display is excellent. It consumes only 49 watts instead of 210 watts consumed by the old PC + its 24-inch monitor. Consumption on sleep mode is so low that I cannot measure it.
My favorite daily newspaper will stop the printed version soon and I will be forced to buy 2 tablets so my wife and I can continue to read our preferred morning paper. I already gave my 10 inch tablet because it was too small for me. The ultra thin, ultra light new Samsung Galaxy 12.2 inch, operating on Android 4.4 (KitKat) is more suited to read the daily paper but it is still very expensive. The Windows 8.1 version is not out yet.
I averaged 42.5 mpg with the Camry Hybrid for the last 2,000+ Km in mixed city-highway driving. My wife does slightly better. My son does even better with the same car. His is a recent 2014 model and mine is a one year old 2013 model. It seems that his stays longer on EV mode than mine. When gas is $1.47/liter, it pays to drive Hybrids.
Posted by: HarveyD | 17 May 2014 at 11:15 AM
Sorry, Harvey, we all are victims of the planned obsolescence conspiracy by both the software and hardware industry chasing after our hard-earned money. Microsoft usurp its monopoly and forcing us all to upgrade when they abandonned previous generations of Windows.
Using Win 2k sp4 on a Pentium III 733 w/ 512MB RAM and Firefox browser, I am able to surf the net adaquately including this website and did many of the postings with it. Of course, I uninstalled long time ago all antivirus softwares and relying on limited account to ward against viruses and unauthorized change to my settings. Win 2k on limited user account is very stable against viruses and malwares. I've never had any viruse nor malware using Win2k. Win XP and Vista are not as virus-resistant...has had viruses with those...perhaps MS did it on purpose so that antivirus software vendors can have their business.
Of course, most Doctors, Dentists, Lawyers, Mechanics, Plumbers, Insurance sale person, Sales persons, any kinds of repairmen, oil-change & car service places... etc... are also crooks and eager to cheat and scam on you if they can...It's a sad, sad world!!!!
Posted by: Roger Pham | 17 May 2014 at 03:28 PM
RP...I recently switched to a much lower cost anti-virus ($19.95 - 15% CDN for the CD version) and it seems to be doing a good job. It comes in an orange box with a white bulldog on it.
Posted by: HarveyD | 17 May 2014 at 05:51 PM
My point was that anti-virus tends to slow your PC way down, especially on older computers. I cleaned up the old PC's considerably and disabled all unnecessary services and processes and device drivers and programs and anti-virus program, and was able to realize huge gains in performance.
None of my Win2k was infected w/ virus when limited user account was used WITHOUT anti-virus. However, on similar net-surfing activities, WinXP and Vista were far more vulnerable to malwares, EVEN with anti-virus, and I had to clean them up! I guess they don't make things the way they used to... and when something was real good, time to move on and to force bugy softwares on the captive Windows users so that the industry can continue to sell more products and services!
How does the above relates to EV's? Well, we don't expect human nature to change, do we?
Posted by: Roger Pham | 17 May 2014 at 10:18 PM
@Lad: Are US refiners currently exporting all their gasoline to China? Answer is no, so why would they start just because they swapped Venezuelan crude for Canadian crude?
Posted by: vrd863 | 18 May 2014 at 12:10 PM
Posted by: ai_vin | 22 May 2014 at 08:15 AM