Quantitative assessment of factors affecting energy intensity from sector, region and time perspectives using decomposition method: A case of China’s metallurgical industry

Abstract

As a typical high-energy consumption industry, the metallurgical industry has brought great challenges to energy saving and emission reduction in the whole China. Reducing the energy intensity of this crucial sector is of great importance to China’s green transition. This paper seeks to determine the drivers of the energy intensity change in China’s metallurgical industry during 2000–2016. To serve this purpose, we construct a comprehensive framework which combines Index Decomposition Analysis (IDA) and Production Decomposition Analysis (PDA) methods to fully decompose the change of energy intensity, and in this way more complete and in-depth insights can be provided. The results showed that the technological progress effect made the greatest contribution to the decline in energy intensity, with a cumulative reduction of 72.32%, while the labor-energy substitution is the greatest obstacle to the energy intensity reduction. As to the provincial contribution, except for Xinjiang and Inner Mongolia, all the other provinces make positive contributions to the energy intensity reduction in China’s metallurgical industry. Therein, Hebei, Hunan and Shannxi provinces rank the top one contributor in Eastern, Central, and Western China, respectively. Based on the empirical results, some targeted recommendations to formulate energy-saving policies for China’s metallurgical industry are put forward.