Evaluating the factors of coal consumption inefficiency in energy intensive industries of China: An epsilon-based measure model

Considering China's low energy efficiency as a dominant barrier in achieving sustainable development goals and environmental pollution control, the presented study is intended to evaluate the influencing factors of coal consumption inefficiency in the energy intensive industries of China. In addition, a decentralized policy at a disaggregate industrial level is required to achieve sustainable coal consumption and emission reduction. However, the existing literature lacks the paucity of inclusive and comprehensive research on the factors affecting coal inefficiency in energy intensive industries of China. Thus to bridge this gap, in the first stage, the epsilon-based measure (EBM) model was used to estimate the coal consumption efficiency and energy conservation potentials, and a second stage regression analysis was also applied to evaluate the factors of coal consumption inefficiency by adopting the Tobit censored and truncated regression models. The empirical findings of the study indices that the energy structure, the industrial structure, and the scale of enterprises are the driving elements of coal consumption inefficiency. Simultaneously, the technological progress and the degree of openness have led to a decrease in coal use inefficiency. The present research suggests diverse policy recommendations to improve coal consumption efficiency and carbon emission reductions at the aggregate and disaggregate industrial level.