Report: China to set regional energy caps

China's efforts to curb its greenhouse gas emissions are poised to take another major step forward, according to reports from the state-backed Xinhua news agency detailing plans to set binding regional caps on energy consumption.

Quoting Jiang Bing, head of the planning department of the National Energy Administration, the news agency reported that the proposals for energy quotas would be released in the near future, although it added that the plans would need approval from China's State Council.

Jiang also signalled that the quotas would only apply to energy derived from fossil fuels with hydro, wind and solar power exempted from the caps.

The Chinese government has previously said it will impose a cap on energy consumption as part of its latest five-year plan, which has set a series of targets designed to enhance energy efficiency and cut the carbon intensity of the country's economy by 17 per cent by 2020. The plan is seen as essential to meeting China's stated goal of cutting its carbon intensity by between 40 per cent and 45 per cent by 2020.

The government has shown a willingness to impose relatively draconian legislation in order to ensure energy targets are met. In 2010, premier Wen Jiabao vowed to use an "iron hand" to ensure energy efficiency targets are met, overseeing a programme of forced closure for many of the country's most inefficient factories.

The proposed energy consumption quotas are the latest in a series of mooted green policy announcements from Beijing designed to curb emissions and accelerate investment in clean technologies.

In the last month alone reports have emerged detailing the government's plans to increase its renewable energy target for 2015, impose a major new resource tax on oil, gas, coal and scarce raw materials, and tighten air pollution standards.