A Snapshot of Energy Efficiency Market Opportunities in China for US Companies


Sponsored by the China-US Energy Efficiency Alliance and ChinaSF

with the support of the US-China Clean Tech Center and the US Commercial Service


A Snapshot of Energy Efficiency Market Opportunities in China for US Companies

Prepared by:
Innovation Center for Energy and Transportation (iCET)/US-China Clean Tech Center (UCCTC)

This is an overview of a 10-page market analysis that will be made available before the trade mission.

China’s continuous rapid economic growth over the last several decades has been accompanied with even faster growing energy demand. In 2011, China’s energy use surpassed that of the long-time leader, the U.S., to be the world’s largest consumer of energy, accounting for approximately 21% of global energy use. This energy demand will keep increasing. By 2020, China’s energy consumption is expected to double and outpace all other countries.

As a result, energy efficiency has become an issue of national importance to China because the enormous energy consumption brings serious environmental consequences including water pollution and air pollution, along with record greenhouse gas (GHG) emissions. The U.S. is in a prime position to export both technology and practices that would improve Chinese energy efficiency while strengthening U.S.-China cooperation.

The goal of this guide is to provide targeted information to help US companies identify opportunities, challenges, and potential partners in China, with the ultimate goal of increasing US energy efficiency exports to China.

In China’s 12th Five-Year Plan (2011-2015), the Central Government announced its energy efficiency goal of a 16% reduction in energy intensity as well as a 17% reduction in carbon intensity below 2010 by 2015.

Provinces and cities in China also have their own energy efficiency demands. For example, by the end of the year 2015, 65% of new residential buildings in Qingdao must meet new energy efficiency standards.  Furthermore, new and planned regulations that cross sectors – such as the “Top 10,000 Energy-Consuming Enterprises Program”, industrial energy performance standards and energy-efficiency appraisals for new large industrial projects – will continue to bring immense opportunities to companies and organizations interested in promoting energy efficiency in China.

China’s largest energy consumption sector by industry is manufacturing (50.4% of national energy consumption), followed by the second largest, residential (26.3%), and the third largest, transport (11.9%).  Furthermore, within manufacturing, the three largest subsectors – iron and steel, cement, and chemicals — together account for about 60% of the country’s industrial energy consumption. U.S. companies should find higher demand in sectors such as these, although other sectors also present opportunities. The average energy consumption per unit of product in China’s major industrial sectors is 15-20% higher than the world average, indicating substantial space for energy-saving in industrial manufacturing. Three energy measures that are especially noted to provide high benefits with low cost in China include cogeneration, natural gas blast furnace injections and preventative maintenance measures.

When looking across sectors for other market opportunities, buildings (both commercial and residential) account for 33% of China’s total energy consumption. Recognizing the need, China continues to raise its requirements on buildings. According to the 12th Five-Year Plan, by 2015, one billion m2 of newly added building space will either meet China’s highest green building certification (3-star), or the U.S.- recognized LEED standard, up from only 69.5 million m2 in 2012. Residential buildings, especially in northern regions, and commercial buildings throughout the country, consume much more energy and are primary market drivers in China. As a result, analysis from McKinsey shows that the building sector generates the most energy savings as well as highest return on investment.

By using the most recent available data and analysis, this report focuses on the largest market opportunities, such as industrial energy efficiency and building energy efficiency. In the full report, more information will be available such as details on the key regulatory authorities in China, incentives and regulations that will affect U.S. companies, and other notable trends and forecasts in the Chinese energy efficiency market.