World Energy Outlook 2007

towards gas-based ammonia production. If this process were included, an
energy-intensity improvement of more than 20% could be achieved (IEA,
2007). However, we do not expect this to happen, as the supply of natural gas
for industry is limited.
Transport
Policy Assumptions and Effects
Over the past few years, the Chinese government has introduced an increasing
amount of regulation in the transport sector, with the twin objectives of
containing oil import growth stemming from incremental mobility needs and
tempering the pollution and congestion that are major consequences of
the increase in vehicle ownership (see Chapter 9). A summary of the key
policies enacted and proposed is presented in Table 11.6. China introduced
mandatory fuel-economy standards for passenger cars and sport utility
vehicles (SUVs) in 2006. These will be tightened in 2008. It has also
introduced a tax on car ownership that is differentiated according to weight
and engine size, to discourage sales of larger and more powerful vehicles. All
vehicles also have to comply with scrappage rules. Local governments are
supporting, to different degrees, the development of mass transportation; for
example, bus and metro rail networks are being expanded substantially in
Beijing and Shanghai. Local governments, mainly concerned with curbing
pollution, are supporting alternative fuels. A national fuel tax is also under
discussion.
In the Alternative Policy Scenario, we assume the following:
■ Fuel efficiency standards are prolonged and tightened. As a result, in 2030,
new light-duty vehicles (LDVs) are on average 40% more efficient than
2005 models (compared with 30% in the Reference Scenario), while new
trucks are 36% more efficient (25% in the Reference Scenario). In 2030, a
new car in China is around 10% more efficient than a new EU model in
2012. New trucks are 15% more efficient than current Japanese new
models. These efficiency gains result from improvements in the efficiency of
internal combustion engines and the introduction of advanced vehicle
technologies, including a higher penetration rate of mild and full hybrid
technologies.
■ Cars and trucks are scrapped two years earlier on average than in the
Reference Scenario.
■ Public transport develops more quickly than in the Reference Scenario,
reducing car usage by 5%.
■ The use of alternative fuels – including coal-based fuels, compressed natural
gas, ethanol, biodiesel – is encouraged more than in the Reference Scenario.
378 World Energy Outlook 2007 - CHINA’S ENERGY PROSPECTS