China will step up efforts to cut its emissions and improve energy efficiency this year after record air pollution in Beijing, where the national legislature opened its annual meeting today.

The government will reduce the nation’s carbon emissions and energy use per unit of gross domestic product by at least 3.7 percent in 2013 and carry out carbon-trading trials, the National Development and Reform Commission, China’s top economic planner, said in a report today. Carbon intensity fell 5.02 percent and energy use per unit of GDP slid 3.6 percent last year, beating targets of 3.5 percent, the NDRC said in Beijing.

China’s cabinet, the State Council, estimated in August it may spend 2.37 trillion yuan ($380 billion) on energy conservation and emissions reduction in the five years through 2015, and the country’s largest oil companies have announced plans for billions of yuan in refinery upgrades to produce cleaner fuel. Official measurements of fine particles in the air measuring less than 2.5 micrometers, which pose the greatest health risk, rose to a record 993 micrograms per cubic meter in Beijing on Jan. 12, compared with World Health Organization guidelines of no higher than 25.

“The energy-intensity and carbon-intensity targets for this year will probably be met,” Charlie Cao, an analyst at Bloomberg New Energy Finance in Beijing, said by phone today. “The five-year targets by 2015 are more challenging to achieve especially if economic growth eases in the following years.”

The nation plans to reduce energy consumption per unit of GDP by 16 percent and carbon intensity by 17 percent in the five years ending 2015.

Clean Energy

China will also expand electricity generation from renewable sources. Hydropower capacity will climb by 21 million kilowatts this year, wind power by 18 million and solar power by 10 million, according to the report. Nuclear power-generation will rise by 3.24 million kilowatts.

“We will make greater efforts to conserve energy and resources and protect the environment,” the NDRC said. “ We will continue to reduce the discharge of major pollutants.”

The government will introduce reforms to the pricing mechanisms for oil products and natural gas, the report showed. The NDRC started trial gas-price programs in Guangdong and Guangxi provinces in southern China in December 2011 and said they would be extended nationwide after an evaluation.

Prices, Growth

Oil-product pricing reforms may be announced after the National People’s Congress, Neil Beveridge, a senior research analyst at Bernstein in Hong Kong, said Feb 25. China may let oil companies set fuel prices according to guideline rates posted by the government, the official Xinhua news agency reported March 28, citing Peng Sen, a former vice chairman at the NDRC.

Recent environmental concerns, a “tight” gas market with strong demand growth and the country becoming more dependent on pipeline and liquefied natural gas imports point to an acceleration of reforms this year and prices may increase, Scott Darling, an analyst at Barclays Plc in Hong Kong, said in a report Jan 24.

China maintained its economic growth target at 7.5 percent for this year, according to Premier Wen Jiabao’s work report in Beijing today before his final opening address to almost 3,000 lawmakers at the annual meeting of the NPC. GDP expanded 7.9 percent in the fourth quarter compared with 7.4 percent in the previous period, snapping a seven-quarter slowdown, government figures showed Jan. 18.

Copyright 2013 Bloomberg

Lead image: GanSu, China via Shutterstock