Non-fossil fuels will account for 30 percent of China`s energy consumption in 2050, compared with the current 10 percent, the China Securities Journal declared on Tuesday.

The whole world is conscious of the need to reduce emissions from fossil fuels and to develop carbon-constraining technologies.

Fossil fuels, also known as mineral fuels, are hydrocarbon-containing natural resources such as coal, petroleum and natural gas.

Coal is considered to be the cheapest and dirtiest source of energy in the world.

Even though China`s per capita greenhouse gas emissions are lower than countries like the United States or Australia, its heavy reliance on coal makes it a major polluter and a major contributor to the emissions that cause climate change.

By 2050, about 40 percent of China`s energy consumption will still come from the burning of coal, compared with the current 70 percent, the report quoted Yan Luguang, a member of the Chinese Academy of Sciences, as saying.

Oil consumption would contribute around 20 percent of the total and reach 800 million tons in 2050, 75 percent of which would be imported from foreign countries, said Yan.

As China`s energy demands continue to grow, a sufficient oil supply is critical to the country`s energy security, said Yan.

The demand for natural gas, hydropower and nuclear power will grow in the coming years and by 2050 solar energy, wind energy and biomass energy will account for 15 percent of the nation`s total energy consumption, said Yan.

Chinese Vice Premier Zeng Peiyan called for innovation in nuclear technologies on Tuesday at the launch of the State Nuclear Power Technology Co. in Beijing.

The new company is authorized by the State Council, or cabinet, to sign contracts for third-generation nuclear power technologies transfer from other countries.

Zeng said the company should speed up the re-innovation of foreign nuclear power technologies to ensure China`s energy supply.

China is seeking alternatives to coal and oil as its double-digit economic growth faces energy bottlenecks.

Zeng noted the company should strive to invent key nuclear technologies and build advanced pressurized water reactors using its own patents and brands as soon as possible.

Nuclear energy will play a key role in helping China build a resources saving and environment friendly society, the vice premier said.

The State Nuclear Power Technology Co. is co-funded by the State Council and four large state-owned enterprises, including the China National Nuclear Corporation, with registered capital of four billion yuan (519.5 million U.S. dollars).

Wang Binghua, 53, has been appointed chairman of the company. He had previously served as the general manager of the state-owned China Power Investment Corporation and deputy general manager of the China National Nuclear Corporation.

The company signed a framework contract on February 28 to buy four third-generation pressurized water reactors from the U.S.-based Westinghouse Electric Co.

Talks on the final agreement are still underway, and the official contract could be signed next month, according to Wang.

He said two pressurized water reactors will be installed in Sanmen City, east China`s Zhejiang Province, and the other two in Haiyang City, east China`s Shandong Province. The two sites have finished preliminary preparations for the `AP1000` project.

Of the 11 nuclear power reactors operating in China, three use domestic technologies, two use Russian technologies, four use French technologies, and two are Canadian designed. All the reactors employ second-generation nuclear power technologies.

The third generation program developed by Westinghouse is the only one that has received final approval from the U.S. Nuclear Regulatory Commission.

China`s present installed capacity of nuclear power plants is less than nine million kilowatts, about one percent of all its power generating capacity. It will be increased to 40 million kilowatts by 2020.

The State Nuclear Power Technology Co., co-funded by the State Council and four large state-owned enterprises including China National Nuclear Corporation, was launched in Beijing on Tuesday.

The new company is authorized by the State Council to sign contracts for third-generation nuclear power technologies transfer from other countries on behalf of China.

Experts say the establishing the company is a major move in the nuclear power sector, and indicates the country will begin to apply third-generation nuclear power technologies.

The registered capital of the company is fixed at four billion yuan (519.5 million U.S. dollars), with 2.4 billion yuan, or 60 percent, financed by the State Council.

The remaining 40 percent will be invested by China National Nuclear Corporation, China Power Investment Corporation, China Guangdong Nuclear Power Holding Co. Ltd, and China National Technical Import & Export Corp. Each of the state owned companies will contribute ten percent.

China National Nuclear Corporation and China Guangdong Nuclear Power Holding Co. Ltd are running the country`s 11 nuclear power reactors currently in operation, while the other two have experience in importing large power generating facilities.

The new company is under the direct leadership of the State Council, and the chairman of board, party secretary and general manager of the new company will be supervised by the central government.

Wang Binghua, born in 1954, has been appointed chairman of board. He had previously acted as the general manager of the state-owned China Power Investment Corporation and the deputy general manager of China National Nuclear Corporation.

The company, prior to its official inauguration, had signed a framework contract on February 28 to buy four third-generation pressurized water reactors from the U.S.-based Westinghouse Electric Co., which also included technologies transfers to China.

Talks on the final agreement are still underway, and the official contract could be signed next month, according to Wang.

The four pressurized water reactors will be installed two in Sanmen City, in east China`s Zhejiang Province, and two in Haiyang City, Shandong Province. The two sites have finished the preliminary preparations for the AP1000 project, said Wang.

Of the 11 nuclear power reactors operating in China three use domestic technologies, two are equipped with Russian technology, four with French technologies, and two are Canadian designed.

All 11 of the reactors employ second-generation nuclear power technologies.

The third generation program developed by Westinghouse is the only one to have received the final design approval from the U.S. Nuclear Regulatory Commission.

The Chinese government also expects the new company to develop self-owned, third-generation nuclear power technologies using technologies imported from Westinghouse, to build a fifth plant.

The present installed capacity of the country`s nuclear power plants is less than nine million kilowatts, slightly more than one percent of all the power generating capacity in the country.

By 2020 China will invest 50 billion U.S. dollars to have nuclear power account for four percent of the total electricity generated by China.

(05-13) 04:00 PDT Houxinqiu , China — The wind turbines rising 180 feet above this dusty village at the hilly edge of Inner Mongolia could be an environmentalist`s dream: Their electricity is clean, sparing the horizon sooty clouds and global warming gases.

But the wind-power generators are also part of a growing dispute over a U.N. program that is the centerpiece of international efforts to help developing countries combat global warming.

That program, the Clean Development Mechanism, has become a kind of Robin Hood, raising billions of dollars from rich countries and transferring them to poor countries to curb the emission of global warming gases. The biggest beneficiary is no longer so poor: China, with $1.2 trillion in foreign exchange reserves, received three-fifths of the money last year.

Scientists increasingly worry about the emissions from developing countries, which may contribute to global environmental problems even sooner than previously expected. China is expected to pass the United States this year or next to become the world`s largest emitter of global warming gases. And as a result, some of the poorest countries are being left out.

That draws attention to the Clean Development Mechanism, which has grown at an extraordinary pace, to $4.8 billion in transfer payments last year to developing countries from less than $100 million in 2002.

The Clean Development Mechanism raises its money through a complex market in trading pollution credits: Businesses and governments in affluent regions such as Europe and Japan help pay to reduce pollution in poorer countries, offsetting their own emissions. This helps advanced industrial nations stay within their Kyoto Protocol limits for emitting climate-changing gases such as carbon dioxide. For each ton of global warming gases that a developing country can prove it has eliminated, the secretariat of the Clean Development Mechanism in Bonn, Germany, awards it a credit. Developing countries sold credits last year to richer nations for an average price of $10.70 each.

Its growth has come almost entirely by focusing on efficient projects in China and other fast-growing countries that spread the administrative costs over many large efforts, while poorer lands have received almost nothing. That is why the program is becoming a battleground, pitting an unlikely coalition of bankers, traders, industrialists and environmentalists, who defend it, against economic development advocates, who warn of distortions.

According to the World Bank, China captured $3 billion of the $4.8 billion in subsidies last year for dozens of projects. Yet it accounted for less than two-fifths of the developing world`s fossil fuel consumption, the main source of warming gases.

One of the projects is the wind farm in Houxinqiu, nestled on a pine-forested hill beside a blue lake fringed by broad fields tilled into long furrows of freshly planted wheat. It is profitable even without the subsidies and is owned by a group of Chinese companies traded on the Shanghai Stock Exchange.

But it is China`s financial sophistication that has helped it soak up so much in subsidies. A vigorous cottage industry of project designers and brokers has sprung up in Shanghai — with workers translating forms into Chinese, promoting the program and taking steps to make it easy and inexpensive for Chinese companies to participate.

"There are a lot of people who know how to do it," said Tao Fuchang, the general manager and chief engineer of the Liaoning Zhangwu Jinshan Wind Power Electricity Co., which built and operates the turbines.

Next in line are India, Brazil, Mexico and Argentina, which get most of the rest of the subsidies, along with South Korea, which was incongruously classified as a developing nation by the Kyoto Protocol, the 1997 pact to limit emissions that also led to the creation of the Clean Development Mechanism.

Trailing far behind are African countries. Payments totaled less than $150 million last year for all of Africa, where government officials say they have been largely left out of one of the biggest bonanzas for the developing world in many years.

"We see this problem everywhere in Africa," said Sateeaved Seebaluck, a high-ranking environment official in Mauritius, an island nation east of Africa.

Even when very poor countries are able to organize development projects, they may lack expertise and must sometimes pay out as much as half the credits in the form of fees for international consultants and credit brokers.

U.N. executives respond, with considerable support from environmentalists, bankers and corporations, that the program`s primary task is to reduce the tonnage of carbon dioxide and other warming gases entering the atmosphere — regardless of where it comes from. By that measure, they say, the program is a success.

Kai-Uwe Schmidt, the Clean Development Mechanism`s executive board secretary, said the organization was acutely aware of regional imbalances in global warming projects and hoped to address them. But setting up an emissions reduction project usually requires considerable investment. "We do not see many investments flowing into Africa in the first place," he said.

Subsidies are readily available for a wide range of projects — straw-fired power plants, wind turbines, even the capture and burning of methane leaking from landfills. Though detailed procedures have been developed for projects in China and other fast-growing countries, they can easily be copied for use in other places.

But before manufacturers can obtain the subsidies, their national governments need to set up a legal framework for handling the money, which some of the poorest countries have not yet been able to do.

The projects that have produced the greatest number of credits so far involve attaching waste-gas incinerators to chemical factories that manufacture an ozone-destroying air-conditioner refrigerant, HCFC-22; these factories are found almost exclusively in the more prosperous developing countries.

Kristalina Georgieva, director of sustainable development strategy and operations at the World Bank, said the Clean Development Mechanism`s secretariat could simplify its rules to help poorer nations.

Georgieva said the secretariat should also pay more attention to fostering renewable energy in very poor lands, because 1.6 billion people lack any electricity and it is crucial to choose power-generating technologies for them that will contribute as little as possible to global warming.

"How the developing countries choose to electrify will determine the fate of the Earth," she said in a recent speech.

Some say the verification process is too burdensome for the poorest countries. But too much streamlining of the process could undermine the confidence of investors in rich countries that the pollution credits are genuine, Georgieva acknowledged in an interview. "What you may get is eroding trust in the system," she said.

David Doniger, an environmental official in the Clinton administration who took part in many Kyoto Protocol drafting meetings in 1997 that led to the creation of the Clean Development Mechanism, said questions had been raised then about whether very poor countries would be able to obtain credits.

But the negotiators decided against any system for guaranteeing a division of credits by region, preferring one focused on reducing emissions wherever they occurred.

"Those were rejected on the grounds that you wanted to get more bang for the buck and they didn`t want this to turn into another U.N. institution with a lot of emphasis on regional balance," said Doniger, who is now climate policy director at the Natural Resources Defense Council.

The wind turbine project in Houxinqiu, an impoverished area of China, shows the pluses and minuses of the current system. It generates almost 24 megawatts of electricity that would otherwis
e come from coal. China already is building enough coal-fired power plants each year to light all of Britain.

Farmers in Houxinqiu still use mules to pull their steel-tip wooden plows and draw their aging wooden carts, the rough-hewn slats bleached white by years of sun and rain. The setting sun vanishes into a dark murk over the plains to the west, where China has been rapidly building coal-fired power plants.

Li Guohai, a local peasant riding his mule cart home with his wife on a recent evening, explained how he had received free electricity since the wind turbines were erected four years ago. He has saved enough money that he bought an all-steel plow for his mules to pull; the new plow now frees his son to finish junior high school and perhaps go to high school, Li said.

The project is narrowly profitable even without Clean Development Mechanism payments, said Tao, the general manager. But the payments made the project more attractive and easier to raise money for it.

While Tao was reluctant to discuss the company`s finances, Clean Development Mechanism records show that the wind farm saves the equivalent of 35,119 tons of carbon dioxide emissions a year. At $8 a credit, that is worth $281,000. Tao does not rely on that money to make the project viable, as the Clean Development Mechanism subsidies aim to do, but it helps him pay for more turbines.

"Without the Clean Development Mechanism, we`d still be profitable," Tao said. But "you need the C.D.M. for further expansion."