A report from China's State Council, or cabinet, said the investments will take China almost halfway to meeting its target to cut the energy intensity 16 percent below 2010 levels by 2015.

The government has earmarked $155 billion of the money for projects that shrink energy use, and while the plan did not detail which types of projects or sectors would benefit from the funds, a big share of the cash is expected to go to industry.

The Ministry of Industry and Information Technology (MIIT) in February set an overall 21 percent energy intensity reduction target for industry from 2010 to 2015.

The State Council plan said steel producers must reduce their energy use per unit of production by a quarter over the five years, coal-fired power plants by 8 percent and cement manufacturers by 3 percent.

China's economic growth over the past three decades has turned it into a major importer of oil, gas and coal, and high international fossil fuel prices have contributed to huge losses at some of China's large state-owned power companies.

The central government's drive to reduce China's insatiable appetite for fossil fuels is aimed at improving the country's future energy security, and is a central plank of its policy to slow down growth in greenhouse gas emissions.

China, the world's biggest emitter of greenhouse gases, plans to cut its CO2 emissions per unit of GDP by 40-45 percent from 2005 levels by 2020.

Over the past few years China has phased out thousands of old, inefficient factories and fossil fuel-fired power plants while becoming the world's biggest producer of renewable energy.

However, greenhouse gas emissions continue to rise, and according to a recent report, China's carbon output grew by 800 million tonnes to 9.7 billion last year, or 29 percent of the world's total CO2 emissions.

Government officials said they expect China's greenhouse gas emissions to peak around 2030.

Seven Chinese cities and provinces will launch CO2 emissions trading schemes over the next two years ahead of a national scheme later in the decade, as China seeks to move away from traditional command-and-control measures to combat spiraling carbon emissions. (Reporting by Kathy Chen and Stian Reklev)

• A Permanent Economic Emergency