Understanding energy efficiency and its drivers: An empirical analysis of China’s 14 coal intensive industries

Abstract

Different industries use energy with different levels of efficiency, even within the same industry. The biggest contributes of this study to the prior literature is that measured the energy efficiency by using coal consumption instead of energy consumption and explore the driving factors behind the variations in efficiency of different coal-intensive industries. The study selected 14 major Chinese coal-intensive industries and applied the super-efficiency model of data envelopment analysis to measure the total-factor energy efficiency of coal consumption (TFEEC) from 2006 to 2015. And the study used the Malmquist index to decompose the TFEEC and to analysis the variation situations of the TFEEC. The main results are as follows. (1) The TFEEC overall showed a trend of growth from 2006 to 2015, which showed that the energy saving and emission reduction policies should be further implemented, especially in developing innovative ways and policies to manage waste emissions. (2) In general, the factors causing the change of the TFEEC were mainly from technological progress, the government should encourage the enterprises to carry out energy technology innovation activities from both the energy-demand side and the supply side. However, the efficiency of different industries had different driving factor, the government should adopt different policies and measures to improve the TFEEC for different industries. (3) Half of the coal-intensive industries were still failing to efficiently utilize all of their resources, which showed that China still has large space to improve the TFEEC for different coal-intensive industries.