UPDATE: China Premier:Energy Consumption Per Unit Of GDP +3.2%

BEIJING, May 5 -- China's energy consumption per unit of gross domestic product rose 3.2% in the first quarter, which increases pressure on the country to meet its energy consumption reduction goal in the remaining months of the year, Premier Wen Jiabao said Wednesday.

China had earlier set a target to reduce energy consumption by 20% in the five years ending Dec. 31, 2010, and consumption fell 14.38% from 2006 to 2009, Wen said in a statement posted on the central government's website.

The statement didn't specify whether Wen was referring to growth from the year-earlier period or the previous quarter. Growth in six of the energy-intensive industries in China--power generation, steel, nonferrous metals, building materials, oil and chemicals--accelerated in the first quarter, Wen said without elaboration.

Wen said China must achieve the target "regardless of the difficulties we may face." He reiterated China must "strictly control" growth in industries including steel, cement, electrolytic aluminum.

As part of its efforts, China's Ministry of Finance said Wednesday it will extend its subsidy for energy-saving air conditioner producers by one year starting June 1, which is in line with Wen's requirement of vigorously promoting energy-efficient products.

The subsidy, which was launched June 1, 2009, and originally scheduled to end May 31, has helped save energy, reduce emissions and boost domestic consumption, the Ministry said in a statement posted on its website.

The replacement of existing air conditioners with energy-saving models will help save electricity and reduce carbon emissions over the coming five years, the statement said.

Meanwhile, the State Council, which acts as the country's cabinet, also released a notification and said China will adjust the natural gas pricing mechanism, push forward tiered pricing for household electricity, and introduce feed-in tariffs for coal-bed methane and natural gas, aiming to save energy and cut emissions.

The target for reduction of energy intensity by 2020 is 40%-45%, but as the domestic economy has been recovering, energy demand has also been picking up. Energy intensity falls when GDP rises faster than energy consumption.