Energy conservation potential in China’s petroleum refining industry: Evidence and policy implications

China is currently the second largest petroleum refining country in the world due to rapid growth in recent years. Because the petroleum refining industry is energy-intensive, the rapid growth in petroleum refining and development caused massive energy consumption. China’s urbanization process will guarantee sustained growth of the industry for a long time. Therefore, it is necessary to study the energy conservation potential of the petroleum industry. This paper estimates the energy conservation potential of the industry by applying a cointegration model to investigate the long-run equilibrium relationship between energy consumption and some factors such as energy price, enterprise scale, R&D investment and ownership structure. The results show that R&D investment has the greatest reduction impact on energy intensity, and the growth of market participants (i.e. the decline of the share of state-owned companies) can improve energy efficiency of this industry. Under the advanced energy-saving scenario, the accumulated energy conservation potential will reach 230.18 million tons of coal equivalent (tce). Finally, we provide some targeted policy recommendations for industrial energy conservation.