Green China – Denmark’s initiative to open the Chinese energy market. By Henrik Martens, Royal Danish Embassy, China.

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China’s current state
First of all, China has in its latest 5-year plan staged a very ambitious goal in the area of energy and environment: The relation between the economic value creation (GDP) and the energy consumption must be improved by 20 percent by 2010 at the latest. These goals are of great importance to the central politicians as well as the leaders of the provinces and the large million cities, and the fulfilment of these goals – or the lack of fulfilment – will henceforth have direct influence on the further career of the politicians’ and officials. This, combined with failed attempts to fulfil the goals, now calls even more for actual and concrete solutions.

Another important and relevant issue is the Chinese legislation in the area of energy and environment. China is currently about to implement its first overall energy law. This will be followed up by a rewriting of all underlying laws and notices, which define the market for the sale of energy saving architecture, thermostats, isolation materials, flue gas cleaning equipment, wind turbines etc.
Concurrently, China has promoted the Ministry of Environmental Protection (formerly known as SEPA) to become an actual ministry as a voting member in the government, and the establishment of a superior ministry for energy are currently being discussed. This is merely a sign that shows how environmental issues have become a high priority on the official Chinese agenda.

In the light of these issues, Denmark has the advantage that the Danish energy mix is fairly similar to the energy mix in China. Through the last 30-40 years, Denmark has struggled with solving the problems now faced by China. Since the first oil-crisis in 1973 Denmark has struggled to lower energy consumption per GDP unit and has almost doubled GDP per energy unit the last 25 years.

Green China
Green China is a new concept conceived by the Trade Council of Denmark-China, with the purpose of strengthening the Danish energy companies’ ability to compete in the Chinese market. Green China not only applies to companies already established in China but also to companies which are considering engaging the market.
The Chinese market consists of several challenges, but three of the most important ones in relation to energy and environment are:
1. Understanding the legislation
2. Ensure awareness among decision makers of the solutions offered by Danish companies
3. Secure a network in order to gain access to the right decision makers

1. While laws and plans are often available in English, the crucial regulations and specifications – which actually define the market – are typically only available in notices written in Chinese. In addition to this, the provinces in many cases implement the legislation differently. In the area of energy and environment it is therefore not enough to know and affect the national legislation – a close dialogue with the authorities in each province is a prerequisite for understanding the actual market conditions.

2. At the same time it is essential to extend the knowledge of the Danish solutions. In many places there is no attention on the use of surplus/excess heat from the production of electricity for heating or cooling households. There is also no focus on the fact that isolation of houses in areas with hot summers, where a lot of energy is used on cooling, is just as important as the isolation of houses that use energy on heating. And there is no focus on how the energy consumption in industrial processes can be decreased by mandatory use of enzymes, for example.

We learned the lesson in Denmark, when we were severely hit by the oil crisis in the 70’ies, and we therefore have comprehensive knowledge about optimising the growth and welfare we can get from one piece of coal, one wind blow, biomass etc. At the same time we were the first country in the world to establish an environmental ministry (once known as Ministry of Pollution Control). These experiences make us a trustworthy partner for China, which is (and will continue to be) very dependent on coal – and which until 2030 is expected to increase its energy production by 1200 GW to a total of 2000 GW. The increase itself is larger than the present capacity of the US. Effective solutions to the Chinese challenges are therefore also politically crucial for solutions to the global climate challenges.

3. Finally there are the networks, which are important in all countries but absolutely fundamental in China. Both in order to get information about new initiatives and future plans, but also to be considered in the sales process itself. It is a task which is difficult and extremely time consuming. Difficult because the Chinese decision makers are often very hard to get to talk, and important because procurement decisions are often made at a high level. The challenge is therefore essential for most Danish companies in China. With over 1.3 billion people and an area the size of Europe, an exceptionally focused market processing is essential in order to be successful.

Green China – A part of the company’s solution
With “Green China”, the Ministry of Foreign Affairs and the Trade Council of Denmark provides a unified founding solution to these challenges. In order to secure focus and impact, TCD-C is working with a focus on six of Chinas provinces: Shandong, Zhejiang, Liaoning, Hebei, Chongqing, Tianjin and the capital Beijing. The six provinces do not only cover 280 million people, but have also been selected as they are economically strong and ambitious in the area of energy and environment.

Green China provides the platform for the participating companies in these provinces:
1. Overview of the implementation of the national legislation, and a dialogue with the authorities on how the implementation can be improved.
2. A joint platform for high-level dialogues with decision makers in the energy and environment area – a platform that will increase the decision makers’ knowledge of Danish technology and will provide a solution to the environmental challenges.
3. Establishment and maintenance of a direct network to the decision makers. 
                 
Contact information:
For further information please visit www.dtcchina.um.dk
or contact Henrik Martens on +86 13911870373 or at henmar@um.dk

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