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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Now launched, China’s streamlined energy law facilitates energy transition in the world’s largest economy
15/1/2025
News
China’s first Energy Law entered into force on 1 January 2025, marking a milestone in the nation’s energy legislation. After decades of fragmented energy management policies, the new law aims to set the tone for China’s future energy developments while aligning with President Xi Jinping’s ambitious carbon emissions targets.
The new Energy Law comprises nine sections that cover a wide array of topics including energy planning, development and utilisation, the energy market system, energy reserves and emergency response, energy science and technology innovation, supervision and management, and legal liabilities.
Central to the law is the prioritisation of renewable energy development, including a focus on expanding hydropower and renewables (wind and solar) as well as biomass, geothermal and hydrogen.
The law also includes provisions for the dual control of total CO2 emissions and CO2 intensity, in line with the government’s targets of CO2 emissions peaking by 2030 and achieving carbon neutrality by 2060 at the latest, as set out by President Xi Jinping at the 75th Session of the United Nations General Assembly in 2020.
In addition, the new law promotes electricity grid interconnectivity and pushes for a market-based pricing system. It also encourages the development of distributed energy, in which generators are placed closer to areas where energy will be used, as well as local development and utilisation. A green electricity certification system encourages users to prioritise the use of renewable energy, and supports the development of new technologies, business models and innovations such as advanced energy storage and smart microgrids.
For the first time, hydrogen is included in China’s national legislation, clearly defining its role as an energy source.
The drafting of the Energy Law began in 2006, with multiple drafts released for public comment and three major revisions made before final approval by the National People’s Congress on 8 November 2024. China has previously enacted several individual energy laws and regulations focused on electricity, coal, energy conservation, renewables and urban gas management. However, the new Energy Law provides a comprehensive framework that integrates these disparate policies into a cohesive strategy. Its success will depend on subsequent policies, regulations and implementation details that will gradually supplement and improve its framework.
The drafting of the new law will see a move from a system that primarily controlled total energy consumption and intensity to one that focuses on carbon emissions.
Moreover, the law’s emphasis on energy security means that coal will continue to play a role in China’s energy mix, albeit in a ‘cleaner and more efficient’ manner.
According to the Energy Institute’s Statistical Review of World Energy, coal dominated China’s energy mix in 2023, generating 61% (5,753.9 TWh) of the nation’s electricity. Hydroelectric accounted for 13% (1,226 TWh) and renewables 18% (1,668.1 TWh). Nuclear generated 5% (434.7 TWh) and gas 3% (297.8 TWh).
In terms of purchasing power, China had the world's largest total gross domestic product in 2024, at $37.1tn, according to the International Monetary Fund, although the country ranked second to the USA in terms of nominal GDP ($18.2tn). US purchasing power and nominal GDP were both $29.2tn in 2024.
