The programme aims to reduce energy consumption by nearly 19 million tonnes of coal equivalent in the first three-year phase of the programme, cutting carbon emissions by 12 million tonnes.

With relatively dirty coal used to generate over two-thirds of the country's power, air pollution is also moving up the government agenda because of its impact on health and growth.

"(It) seeks to remove barriers to the widespread application of energy conservation and efficiency in China's major energy end users -- industry and buildings," Khalid Malik, UN Resident Coordinator in China, told a news conference.

With industrial users accounting for around 70 percent of energy consumption, the government plans to invite six firms from energy-intensive sectors -- steel, chemicals and cement -- to join voluntary pilots over the next three years, said an official from the National Development and Reform Commission said.

The construction sector is another key target, making up some 20 percent of the country's energy demand -- and energy efficient designs a key factor in future power use, NDRC programme coordinator Niu Bo added.

Energy efficiency standards and labelling for electrical goods in the residential and service sector ranging from refrigerators to air-conditioners would also be brought in over three years.

The Global Environment Facility (GEF) will provide $17 million for the first three-year phase of the programme, the Chinese government will supply $31 million and another $32 million will come from the private sector, Malik said.

Premier Wen Jiabao has urged the country to step up power conservation to relieve an energy crunch that is impeding economic growth.

The government issued China's first medium and long-term plan for energy conservation late last year under which China would aim to burn 2.25 tonnes of coal for every 10,000 yuan ($1,200) worth of GDP by 2010, down from 2.68 tonnes per 10,000 yuan in 2002.