The efficiency improvement potential for coal, oil and electricity in China's manufacturing sectors

• An improved total-factor energy-saving target ratio is proposed.
• Energy saving potentials of energy carriers for sectors in 1998–2011 are calculated.
• Policy implications for energy savings in sectors and energy carriers are discussed.
• Some suggestions for the energy policies of China's economy are discussed.

This paper introduces an improved total-factor ESTR (energy-saving target ratio) index, which combines the sequence technique and the “energy direction” to a DEA (data envelopment analysis) model, in order to measure the possible energy saving potential of a manufacturing sector. Afterward, the energy saving potentials of four different energy carriers, namely coal, gasoline, diesel oil and electricity, for 27 manufacturing sectors during the period of 1998–2011 in China are calculated. The results and its policy implications are as follows: (1) the average ESTRs of coal, gasoline, diesel oil and electricity are 1.714%, 49.939%, 24.465% and 3.487% respectively. Hence, energy saving of manufacturing sectors should put more emphasis on gasoline and diesel oil. (2) The key sectors for gasoline saving is the energy-intensive sectors, while the key sectors for diesel oil saving is the equipment manufacturing sectors. (3) The manufacture of raw chemical materials and chemical products sector not only consumes a large amount of oil, but also has a low efficiency of oil usage. Therefore, it is the key sector for oil saving. (4) Manufacture of tobacco and manufacture of communication equipment, computers and other electronic equipment are the benchmark for the four major energy carriers of energy-saving ratios.