An apple a day keeps the doctor away.

British proverb

A smile a day keeps a depression away.

Chinese proverb

China is the now the largest energy consumption market in the world. In 2009, China’s total energy consumption amounted to 3.10 billion tonnes of standard coal equivalent — an increase of 6.3% from 2008. China consumes twice as much diesel as gasoline; nearly 80% of commercial vehicles in China run on diesel.

In 2011, China’s economy grew by 9.2%, down from 2010’s 10.4% growth. In March 2012, Beijing cut its growth target for the whole of 2012 to 7.5%. In the first six months of 2012 China’s economy has grown at its slowest pace in three years due to slowing investments and falling demand in key markets such as the US and Europe.

The Chinese government is stimulating the economy again and in 2012 China’s central bank has cut the amount of money banks must keep in reserve in order to boost lending, and it also cut the cost of borrowing twice in one month.

China accounts for about a fifth of the world’s total economic output and any slowdown may hamper a global recovery. Currently, China relies mainly on coal and fossil fuels for energy production. Since 2006, China has surpassed the United States as the world’s biggest emitter of carbon dioxide.

China consumes twice as much diesel as gasoline due to widespread diesel use in public transport, cargo ships, and agriculture machinery. Nearly 80% of commercial vehicles in China run on diesel. In 2009, China consumed at least 144 million tonnes of fossil diesel fuel.

According to the US Energy Information Administration (www. eia. doe. gov), China will consume around 9.9 million barrels of crude oil daily in 2012. China’s own oil production only averages 3.4 million barrels per day, with over 6.5 million barrels needing to be satisfied by either imports or other energy sources.

In light of the rapid growth of the Chinese economy and rising consumption of energy, the Chinese government increasingly encourages the development and use of renewable energy sources. According to the Medium and Long Term Development Plan of China, the share of renewable energy used in primary energy consumption is to be increased to roughly 15% by 2020. The Energy-Saving Law of

China, which came into effect on 1 April 2008, also encourages the development and utilization of petroleum substitutes.

In April 2009, the Chinese Academy of Sciences released the 2009 China Sustainable Development Strategy Report, putting forward the strategies and objectives in the development of low-carbon economy in China (www. undp. org. cn/pubs/nhdr/ nhdr2010e. pdf). The objectives mandate energy consumption to decrease by 40-60% and carbon dioxide intensity (emission per unit of gross domestic product) to be lowered by 50% comparing to 2005 gross domestic product standards. Both Guang­dong and Hainanprovinces have initiated a focus in developing low-carbon economies.

According to the Law of Renewable Energy Resources, January 2006, the Chi­nese government mandates petroleum-selling enterprises to include biofuel that meets the China national standards into their fueling-selling system. In addition, the Chinese government has implemented various favorable tax policies and provided incentives to agricultural companies. The Project is qualified for gov­ernment grants from China’s State Forestry Administration, State Administration of Taxation, National Development and Reform Commission, Ministry of Agri­culture, and Ministry of Finance.

Figure 12.1 illustrates the energy consumption in China and Figure 12.2 illus­trates the top 10 oil importers in 2009. Figure 12.3 shows that the gap between China’s oil production and consumption is widening, and imports will have increase further. Figures 12.4 and 12.5 show that China has overtaken the United States in energy consumption, and dominates many commodity markets expres­sed as a share of global consumption.

12.7