Beijing’s announcement of five-year energy consumption reduction targets for 17 energy-intensive industries to drive the reduction of carbon dioxide and other pollutants will spur industry consolidation, analysts said.

According to a joint circular published on Friday by regulators overseeing industrial development and environmental and energy policies, higher energy efficiency bars have been set for companies in sectors ranging from oil refining to non-ferrous metals smelting. For example, steel, cement, coal-to-chemicals, aluminium smelting – among the country’s biggest carbon dioxide emitting industries – must all meet certain minimum standards by 2025. Currently, some 20 to 40 per cent of their capacity fails to do so.

Companies whose energy efficiencies are below the minimum standards are urged to install advanced equipment and adopt new technology such as recycling of waste heat, according to the circular, which was issued by regulators led by the National Development and Reform Commission (NDRC).

Guest post from South China Morning Post