The directive requires non-fossil energy consumption to increase by about 1% annually through 2028. It also mandates limiting coal use in power generation to achieve a 15% increase in coal-fired power capacity that meets national energy performance standards.

These measures are part of the Action Plan for Carbon Peaking during the 15th Five-Year Plan (2026–2030), which targets a 17% reduction in carbon emissions per unit of GDP from 2025 levels by 2030. At that time, non-fossil fuels must account for 25% of total energy consumption, and clean energy sources must meet all new electricity demand nationwide.

‘The plan will strengthen China’s energy security during global energy market instability while helping the country move into a time when non-fossil energy becomes the dominant source of supply,’ said Tian Zhiyu, Director of the Centre for Energy Sustainable Development under the Energy Research Institute of the NDRC.

An NDRC official stated that the commission will work with relevant departments to implement the plan and support national goals to peak CO₂ emissions before 2030 and achieve carbon neutrality before 2060.

The new implementation frameworks target nine high-emission industries: steel, electrolytic aluminium, cement, flat glass, oil refining, ethylene, synthetic ammonia, methanol and coal-fired power generation. Official data shows these industries remain the main sources of national energy consumption and carbon emissions due to their large industrial base. The steel industry alone accounts for about 15% of China’s total carbon emissions.

This high percentage is due to the long-process production model in China’s steel sector, which results in higher carbon intensity than steel manufacturing in the European Union, Japan and South Korea. Government reports indicate that much of the domestic capacity in crude steel, electrolytic aluminium and cement clinker does not meet advanced energy efficiency benchmarks. In addition, industrial operators face increasing bottlenecks as conventional energy-saving technologies reach operational limits, raising the marginal cost of further carbon reductions. In the cement sector, which accounts for about 9% of national carbon emissions, over half of emissions come from the limestone calcination process rather than fuel combustion.

To address this, the government’s action plan calls for coordinated efforts across industries, as carbon emissions in key sectors depend on both upstream energy sources and downstream applications. For example, the carbon intensity of the electrolytic aluminium industry is influenced by the carbon footprint of its power supply as well as the grid’s ability to absorb wind and solar power.

To monitor carbon data across interconnected supply chains in automotive manufacturing and construction, authorities are implementing national product-specific carbon accounting. These systems embed carbon costs into corporate operational expenses, increasing financial pressure on substandard facilities. Regulators will apply differentiated electricity pricing and restrict carbon quota access for enterprises that do not meet energy efficiency standards. High-efficiency enterprises will receive policy incentives and financial benefits through the national carbon quota trading market.

The national guidelines direct industries to adopt digital management tools, intelligent sensors and big data analytics for real-time energy monitoring and efficiency optimisation. Pilot programmes in Zhejiang Province have applied these tools to over 3,400 high-energy-consuming enterprises, raising local steel and ethylene operations to national standards. To support these efforts, the state is developing new infrastructure, including about 100 national-level zero-carbon industrial parks and 500 zero-carbon factories.

The plan also includes developing multiple zero-carbon transport corridors to reshape regional logistics networks between industrial centres. In Baotou, a green power transmission project delivers clean electricity from 200 km away, enabling local aluminium producers to manufacture low-carbon metals using renewable energy.

To support clean energy integration across the grid, the Chinese government has established a capacity-based electricity pricing system that compensates flexible power sources, including coal-fired power and energy storage facilities. Reforms linking the national carbon market and the power market aim to incorporate carbon-related costs directly into electricity pricing.

On the consumption side, the guidelines prioritise replacing fossil fuels with non-fossil energy in transportation and construction. The three-year roadmap calls for expanding new energy vehicles so they make up about 30% of all vehicles on the road by 2030. For transportation infrastructure, operators must first upgrade high-power charging facilities at stations where utilisation rates exceed 40% during major holidays.

Finally, the directive requires coordinated development between green electricity supply and emerging data industries, with a focus on computing power facilities. This approach aims to improve regional energy distribution by aligning the high electricity demands of data centres with local renewable energy generation.