By Xin Zhiming (China Daily)
Updated: 2007-11-27 06:58

The government plans to spend 23.5 billion yuan ($3.2 billion) this year to raise energy efficiency and cut pollutant emissions, a senior finance official said Monday.

The pricing regimes for energy and resources will also be reformed, and charges raised for wastewater treatment, said Zhang Shaochun, vice-minister of finance, at a national conference on energy efficiency.

Of the fund, 7 billion yuan ($947.2 million) will be earmarked as grants to encourage major energy-efficient projects, Zhang said.

Grants used to be disbursed based on the value of projects but Zhang said the amount now will depend on how much energy the projects can save.

During the 2006-10 period, energy-efficient technological upgrading is expected to save 130 million tons of coal equivalent, Zhang said.

"The more they save, the more grants they will get," he told finance officials.

The energy efficiency of the projects will be appraised by independent third-party institutions, he added.

Another 6.5 billion yuan ($879.6 million) will be channeled to build or upgrade pipeline networks for waste water treatment in the central and western regions, he said.

The funds will be provided to provinces based on the total length of the networks and emission cuts in chemical oxygen demand (COD) - a key water pollution index - Zhang said.

The remainder of the fund will be used for elimination of out-dated production capacities, monitoring pollution and control of river and lake pollution.

The government has set a goal of reducing energy consumption per unit of gross domestic product (GDP) by 20 percent during the 2006-10 period, or 4 percent each year, and cutting major pollutants by 10 percent by 2010.

Zhang said the country has made headway, but more needs to be done.

Xinhua contributed to the story