Energy aid is being misused, audit finds

10:16, May 14, 2011      

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Some Chinese enterprises have misused or fraudulently acquired subsidies assigned by the central government to boost energy efficiency, the nation's top auditing office said on Friday.

The National Audit Office (NAO) also said new industrial projects were falling short of national environmental protection standards.

The findings were in a report generated from a study of energy efficiency in power, steel and cement industries across 20 provinces from 2007 to 2009.

"Some companies have fabricated data in application materials to cheat the government for energy-efficiency subsidies, while others were found to have either over-applied or appropriated the subsidies," said Wang Dannong, head of the department of agriculture, resources and environmental protection audit of the NAO.

New energy-consuming and highly polluting projects are still being established, Wang said.

China has set a goal to reduce energy consumption per unit of GDP by 16 percent during the 12th Five-Year Plan (2011-2015) period.

The nation's economic growth has become increasingly dependent on a vast amount of energy produced by oil and coal. That poses a threat to China's energy security, environment and sustainable development.

To achieve the energy-saving target, the country embarked on a series of "iron-fist" measures, including eliminating outdated industrial capacity, halting new energy-guzzling projects and subsidizing enterprises to improve energy efficiency.

Some provincial and municipal officials have tried to slacken the central government's attempts to close polluting factories in their jurisdictions. Earlier reports exposed that businesses were found misusing the fund that was set aside to help them improve energy efficiency.

In its latest investigation, the NAO found 40 Chinese companies appropriated or over-applied government energy subsidies totaling 205 million yuan ($31.5 million).

It also found that 186 companies illegally built 234 projects in the energy-guzzling thermal power, cement and steel sectors. A further 183 companies made false reports on their work to eliminate outdated capacities.

These companies have been told to return the money or to correct their misdeeds, the office said. Twenty people have been penalized.

Wang said the NAO will strengthen its auditing work to help ensure the success of China's energy efficiency campaign during the next five years.

Source: China Daily
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