China Government to Focus on Energy Efficient Industry Subsidies

To achieve carbon emission reduction goals, China will be turning its focus to strengthening energy efficient and low carbon industries financial support and tax incentives, according to a recent report by

China has fallen behind schedule in meeting carbon reduction goals, and will need to continue to work hard, said Xie Zhenhua, Vice President, National Development and Reform Commission (NDRC) at a recent meeting. 

LEDs have shown excellent energy efficiency. The Chinese government in cooperation with United Nations Development Program (UNDP) and Global Environment Fund have facilitated the phase-out of China’s incandescent bulbs project, the Phasing Out of Incandescent Lamps and Energy Saving Lights Promotion (PILESLAMP) project. From 2009 to 2013, incandescent bulbs phased out in the country reached 650 million, approximately 16 percent of incandescent bulbs manufactured in the country. In the next phase of the project, China will follow the incandescent bulb phase out roadmap and intensify transition towards more efficient lighting, said Lv Fangxiang, Deputy Director of the PILESLAMP project.

Average CFL lifetimes are more than 6,000 hours, which is six times that of incandescent bulbs. CFL can conserve 60 percent to 80 percent of electricity. Compared to CFL, LED lifetimes can be three times higher, and consumes about 60 percent of energy. The PILESLAMP project is expected to directly conserve 4 billion kilowatt per hour of electricity and cut 4.40 million metric tonnes of carbon dioxide, said Xie during the project’s initiation ceremony. The project is expected to cut 175 million to 237 million carbon emission within 10 years.

In recent years, China is nearing carbon reduction deadlines. The country announced in 2011, a roadmap for the gradual phase out of incandescent bulbs. Import bans on 60W and above incandescent bulbs for general lighting will be effective starting Oct. 1, 2014. The approaching midterm evaluation of the incandescent bulb phase out roadmap will speed up the replacement trend. Last year, China’s lighting market value reached RMB 260 billion (US $41.4 billion), and CFL accounted for 80 percent market share, said a high-ranking officer of a listed LED company. LEDs have high market potential, and is projected to claim 20 percent to 30 percent market share by 2015.

“CFL are not environmental friendly because of its mercury contents with many (Chinese) local governments have cancelling CFL subsidies,” said the officer. “In the residential lighting market, LEDs have realized Cost/Performance ratio and are environmental friendly. Manufacturers now are expecting the timely release of LED subsidies.”

LED industry started to rebound in 2013, according to analysis by industry insiders. A couple of years ago, 5W LED prices were three to four times that of CFLs with the same brightness. However, in recent years upstream LED chip prices have declined at a rate of around 30 percent, and in general costs have declined. By 2013, LED luminaire prices are basically the same as CFL. The LED industry will be entering a phase of completely replacing conventional luminaires.

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