'Grim year' for China's environment
Commenting on the figures Pan Yue, vice minister of the State Environmental Protection Administration (SEPA), said 2006 was "the most grim year for China's environmental situation".
"The goals set out by the cabinet at the start of the year, of cutting energy intensity by four per cent and emissions of pollutants by two per cent have absolutely not been achieved," he said in a statement on the SEPA website.
Pan did not say by how much China missed the goals and figures are not yet available for the second half of the year.
China has the world’s highest level of acid rain-causing sulphur dioxide emissions, rising 27 per cent from 2000 to 2005, mostly from coal-burning power stations.
Heavy use of coal for cooking and heating, vehicle exhaust fumes and construction dust have compounded pollution problems, particularly in the northern cities.
According to the China Daily only Beijing and five other regions, out of the country's 31 provinces and self-governing cities, managed to meet the state-set goals.
The report did not cite a source or name the other successful regions.
According to the paper China's central bank is currently working with the SEPA on a new credit evaluation system that could see firms with poor environmental records being turned down for loans.