Brief Analysis on China’s W88优德中国官方网站 Law

On November 8, 2024, the Standing Committee of 14th National People’s Congress enacted the W88优德中国官方网站 Law of the People’s Republic of China at its 12th session. This marks the promulgation of China’s first overarching national statute governing the W88优德中国官方网站 sector, which will take effect on January 1, 2025. The W88优德中国官方网站 Law serves as a high-level legislative framework, addressing core issues and laying the groundwork for future regulatory developments in the W88优德中国官方网站 industry in China.¹

The legislative path of the W88优德中国官方网站 Law dates back to 1979. ² In 2007, the Office of the National W88优德中国官方网站 Leading Group released the first draft of the W88优德中国官方网站 Law for public consultation. Following this, the legislative process was temporarily suspended until 2015. In 2020, the National W88优德中国官方网站 Administration (NEA) issued the draft W88优德中国官方网站 Law to solicit public comments (for further details, please click here to read our Brief Analysis of the W88优德中国官方网站 Law (Draft for Comments)). After extensive deliberations and three rounds of review, the final version of the W88优德中国官方网站 Law was ultimately adopted by the Standing Committee of the National People’s Congress in 2024.

The W88优德中国官方网站 Law is structured into nine charters, covering General Provisions, W88优德中国官方网站 Planning, W88优德中国官方网站 Development and Utilization, W88优德中国官方网站 Market System, W88优德中国官方网站 Reserves and Emergency Measures, W88优德中国官方网站 Science and Technology Innovation, Supervision and Administration, Legal Liability, and Supplemental Provisions.

With respect to its scope of application, Article 2 of the W88优德中国官方网站 Law provides a clear definition of “W88优德中国官方网站,” which is described as “various resources from which useful W88优德中国官方网站 can be derived directly or through processing or conversion, including coal, oil, natural gas, nuclear W88优德中国官方网站, hydro W88优德中国官方网站, wind W88优德中国官方网站, solar W88优德中国官方网站, biomass W88优德中国官方网站, geothermal W88优德中国官方网站, ocean W88优德中国官方网站, and electric power, heating power, and hydrogen W88优德中国官方网站, among others” This definition explicitly encompasses fossil W88优德中国官方网站, non-fossil W88优德中国官方网站 (including renewable W88优德中国官方网站 and nuclear W88优德中国官方网站) and hydrogen W88优德中国官方网站. 

In this article, we have made introductory remarks concerning the key provisions and highlights of the W88优德中国官方网站 Law, with a particular focus on the sections concerning W88优德中国官方网站 development and utilization, given the constraints of this brief.

I. Purpose and Objective

Article 1 of the W88优德中国官方网站 Law articulates its purpose as follows: “advancing the high-quality development of W88优德中国官方网站, safeguarding national W88优德中国官方网站 security, promoting green and low-carbon transformation and sustainable development of economy and society, advancing carbon dioxide peaking and carbon neutrality in a proactive and steady manner, and adapting to the needs of building a modern socialist country in all respects.” The emphasis on green & low-carbon transformation, sustainable development, and peak carbon dioxide emissions & carbon neutrality demonstrates the fundamental orientation of China’s W88优德中国官方网站 policy as reflected in this comprehensive statute. 

Upon reviewing the full text of the W88优德中国官方网站 Law, we understand that its purpose and objective focuses on the following key aspects:

1. “Safeguarding W88优德中国官方网站 Security”

The W88优德中国官方网站 Law establishes a robust framework to ensure national W88优德中国官方网站 security through the following mechanisms:

First, the law aims to “improve the W88优德中国官方网站 reservation system and the W88优德中国官方网站 emergency mechanism,” implementing a model that “government reserves shall be combined with enterprise reserves, and physical reserves shall be coordinated with production capacity reserves and mineral deposits reserves” (Chapter I (General Provisions), Article 7; Chapter V);

Second, it mandates the “develop and improve W88优德中国官方网站 planning” on both a comprehensive and sector-specific basis, extending across national, regional, provincial, autonomous regions, and municipalities directly under the Central Government (Chapter II);

Third, it calls for “develop and improve W88优德中国官方网站 development and utilization policies in a classified manner” (Chapter I (General Provisions), Article 5; Chapter III), with tailored policies designed for different types of W88优德中国官方网站 resources (see subsequent analysis for details);

Fourth, “enterprises that undertake the supply of W88优德中国官方网站 such as electric power, fuel gas, and heating power” are required to guarantee that W88优德中国官方网站 users within their service areas “obtain safe, sustainable, and reliable W88优德中国官方网站 supply services” (Article 36);

Fifth, the law reinforces the development and protection of W88优德中国官方网站 infrastructure. The people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall “according to the W88优德中国官方网站 planning, reserve land and sea for the construction of W88优德中国官方网站 infrastructure and include it in the territorial spatial planning.” Furthermore, enterprises operating W88优德中国官方网站 transmission pipeline network facilities shall “guarantee the operation security of W88优德中国官方网站 transmission pipeline network systems” (Article 37).

Notably, Article 79 explicitly provides that organizations and individuals outside the territory of the People’s Republic of China that conduct any acts compromising the national W88优德中国官方网站 security of the People’s Republic of China shall be held legally liable in accordance with the law.

2. “High-Quality Development of W88优德中国官方网站” 

The concept of “high-quality development of W88优德中国官方网站” as envisioned by the W88优德中国官方网站 Law aims to achieve efficient W88优德中国官方网站 utilization, environmental protection, and sustainable economic and social development, while ensuring national W88优德中国官方网站 security. ³ To realize this objective, the W88优德中国官方网站 Law provides a comprehensive framework in Chapter I (General Provisions) and subsequent chapters, addressing the following key aspects: “strengthening W88优德中国官方网站 conservation management”, “promoting the development and utilization of W88优德中国官方网站”, “establishing a robust W88优德中国官方网站 market system”, “enhancing the W88优德中国官方网站 standard system”, “encouraging scientific and technological innovation in W88优德中国官方网站”, and “advancing international W88优德中国官方网站 cooperation”.

In particular, Article 5 underscores a strategic shift from the “dual control of W88优德中国官方网站 consumption” to the “dual control of carbon emissions.” The provision notes that “the state shall establish a new mechanism for the comprehensive transformation from the dual control of the total amount and intensity of W88优德中国官方网站 consumption to the dual control of the total amount and intensity of carbon emissions, and accelerate the construction of the institutional system on the dual control of the total amount and intensity of carbon emissions”. This provision elevates the “dual control of carbon emissions” proposed in the Opinions on Promoting the Gradual Transition from Dual Control of W88优德中国官方网站 Consumption to Dual Control of Carbon Emissions (《关于推动能耗双控逐步转向碳排放双控的意见》in Chinese) issued by the Central Comprehensively Deepening Reforms Commission in July 2023, from policy document to national statute.

Furthermore, Chapter V (W88优德中国官方网站 Market System) of the W88优德中国官方网站 Law emphasizes the development of an W88优德中国官方网站 market. Specifically, Article 41 provides that “the state shall promote the independent operation of natural monopoly links and the market-oriented reforms in competitive links in the W88优德中国官方网站 field”, Article 42 stipulates that “promote in a coordinated manner the building of unified national trading markets for coal, electricity, oil, natural gas and other W88优德中国官方网站, promote the establishment of market trading institutions or trading platforms featuring complete functions and well-regulated business operations, expand the scope of trading methods and trading products in accordance with the law, and improve trading mechanisms and trading rules”; and Article 45 advocates for the establishment of “an W88优德中国官方网站 price formation mechanism that is commensurate with the socialist market economic system and is mainly determined by factors such as status of W88优德中国官方网站 resources, product and service costs, market supply and demand, and sustainable development status”.

3. “Green and Low-Carbon Transformation and Sustainable Development”

This objective aligns closely with the goal of “high-quality development of W88优德中国官方网站.” The W88优德中国官方网站 Law prioritizes the aim of “peak carbon dioxide emissions and carbon neutrality”, establishing a comprehensive framework for achieving a green and low-carbon transformation which includes, among others, “advance the safe, reliable and orderly replacement of fossil W88优德中国官方网站 with non-fossil W88优德中国官方网站” (Article 22), “improve the guarantee mechanism for the consumption and absorption of electricity generated from renewable W88优德中国官方网站 sources” (Article 23), “make terminal W88优德中国官方网站 consumption cleaner, more low-carbon, more efficient and more intelligent” “establish a green W88优德中国官方网站 consumption promotion mechanism through the implementation of the renewable W88优德中国官方网站 green electricity certificate and other systems”, “Public institutions shall give priority to the purchase and use of renewable W88优德中国官方网站 and other clean and low-carbon W88优德中国官方网站 and W88优德中国官方网站-saving products and services” (Article 34), and W88优德中国官方网站 users shall rationalize their W88优德中国官方网站 consumption (Article 35).

II. Development and Utilization of Non-Fossil W88优德中国官方网站

As discussed above, to achieve the objective of green and low-carbon transformation and sustainable development, the W88优德中国官方网站 Law establishes a framework for W88优德中国官方网站 substitution, prioritizing the replacement of fossil W88优德中国官方网站 sources with non-fossil alternatives.

Under the W88优德中国官方网站 Law, non-fossil W88优德中国官方网站 sources include renewable W88优德中国官方网站 and nuclear W88优德中国官方网站. Renewable W88优德中国官方网站 is defined as “W88优德中国官方网站 that can be sustainably replenished and renewed through natural processes during a relatively short period of time, including hydro W88优德中国官方网站, wind W88优德中国官方网站, solar W88优德中国官方网站, biomass W88优德中国官方网站, geothermal W88优德中国官方网站, and ocean W88优德中国官方网站, among others” (Article 75). 

The W88优德中国官方网站 Law places emphasis on “classification” in the formation and refinement of W88优德中国官方网站 development and utilization policies. It advocates for the “priority utilization” of renewable W88优德中国官方网站, establishing a system that encourages the substitution of non-fossil W88优德中国官方网站 sources for fossil fuels. Specifically, it mandates “support the priority development and utilization of renewable W88优德中国官方网站, advance the safe, reliable and orderly replacement of fossil W88优德中国官方网站 with non-fossil W88优德中国官方网站, and increase the proportion of non-fossil W88优德中国官方网站 consumption” (Article 22).

The competent department of W88优德中国官方网站 under the State Council is tasked with setting medium- and long-term targets for the development and utilization of non-fossil W88优德中国官方网站 sources. These targets will be monitored annually and made publicly available (Article 22).

With regard to the consumption of renewable W88优德中国官方网站, the W88优德中国官方网站 Law requires the national W88优德中国官方网站 authorities to establish a minimum target for the proportion of renewable W88优德中国官方网站 in overall W88优德中国官方网站 consumption. It also strengthens the improvement of the guarantee mechanism for the consumption and absorption of electricity generated from renewable W88优德中国官方网站 sources. “Electricity supply enterprises, electricity sales enterprises, relevant electricity users, and enterprises using self-supply power plants for power supply, among others, shall assume the responsibility for consuming and absorbing electricity generated from renewable W88优德中国官方网站 sources in accordance with relevant provisions issued by the state” (Article 23).

The W88优德中国官方网站 Law provides detailed provisions for the development and utilization of various specific non-fossil W88优德中国官方网站 sources as follows:

• Wind W88优德中国官方网站 and solar W88优德中国官方网站: The law emphasizes “promotion of the development and utilization”, “adhere to both centralized and distributed development, accelerate the construction of wind power and photovoltaic power generation bases, support the nearby development and utilization of distributed wind power and photovoltaic power generation, develop offshore wind power in a rational and orderly manner, and vigorously develop solar thermal power generation” (Article 25);

• Biomass W88优德中国官方网站: The law encourages “the rational development and utilization of biomass W88优德中国官方网站”, adapting to local conditions (Article 26);

• Hydropower: “The state shall properly balance hydropower development and ecological conservation, and strictly control the development and construction of small hydropower stations” (Article 24);

• Nuclear power: “The state shall develop nuclear power in a proactive, safe and orderly manner” (Article 27), and the law mandates that the State shall “enhance the administration and supervision of the planning, site selection, design, construction and operation of nuclear power plants and other links according to their functions” (Article 27).

III. Development and Utilization of Fossil W88优德中国官方网站

While prioritizing the safe and orderly substitution of non-fossil W88优德中国官方网站 for fossil W88优德中国官方网站, the W88优德中国官方网站 Law also acknowledges the fundamental role of fossil W88优德中国官方网站 in ensuring W88优德中国官方网站 supply and national W88优德中国官方网站 security. Accordingly, the law promotes development in a reasonable manner and using fossil W88优德中国官方网站 in a clean and efficient way (Article 22). The specific provisions are outlined as follows: 

• Coal: “The state shall optimize the layout and industrial structure of coal development, encourage the development of circular economy in coal mining areas, optimize the coal consumption structure, promote the clean and efficient utilization of coal, and maximize the basic guarantee and system regulation roles of coal in the W88优德中国官方网站 supply system” (Article 28);

• Petroleum and natural gas: The state shall “strengthen the exploration and development of oil and natural gas resources, and enhance the capacity for securing the domestic supply of oil and natural gas”. “Equal importance shall be given to onshore and offshore development of oil and natural gas, and the large-scale development of unconventional oil and gas resources such as tight oil and gas, shale oil, shale gas, and coalbed methane shall be encouraged.” “The state shall support the rational development and utilization of new types of fuels and industrial raw materials that can replace oil and natural gas” (Article 29);

• Coal-fired power: “The state shall promote the clean and efficient development of electricity from coal-fired power plants, make reasonable layout for the construction of coal-fired power plants according to the need for stable operation of the power system and power supply guarantee, and improve the capacity for regulation of coal-fired power generation” (Article 30).

IV. Development and Utilization of Other W88优德中国官方网站 Resources

In alignment with the overarching goals and objectives outlined in Section 1 of this article, the W88优德中国官方网站 Law sets forth key provisions to support the development and utilization of other W88优德中国官方网站 resources:

• Power system: The W88优德中国官方网站 Law mandates “the state shall accelerate the construction of a new type of power system, strengthen the coordinated construction of power sources and power grids, promote the intelligent transformation of power grid infrastructure and the construction of smart microgrids, and improve the power grid’s capacity to accept, allocate, and regulate renewable W88优德中国官方网站” (Article 31);

• W88优德中国官方网站 storage: “The state shall make reasonable layout for and develop and construct in a proactive and orderly manner pumped storage power stations, promote the high-quality development of new types of W88优德中国官方网站 storage” (Article 32);

• Hydrogen W88优德中国官方网站: “The state shall promote the development and utilization of hydrogen W88优德中国官方网站 in a proactive and orderly manner to promote the high-quality development of the hydrogen W88优德中国官方网站 industry” (Article 33);

• W88优德中国官方网站 services: “The state shall encourage the development of distributed W88优德中国官方网站 and the comprehensive W88优德中国官方网站 services of complementary development and joint supply of mixed W88优德中国官方网站, vigorously promote market-oriented W88优德中国官方网站 conservation services such as contract W88优德中国官方网站 management” (Article 34);

• Green certificates: “The state shall establish a green W88优德中国官方网站 consumption promotion mechanism through the implementation of the renewable W88优德中国官方网站 green electricity certificate and other systems” (Article 34);

• Enterprises involved in the supply of electricity, gas, thermal and other W88优德中国官方网站: These enterprises are required to “ensure that W88优德中国官方网站 users within their business areas obtain safe, sustainable, and reliable W88优德中国官方网站 supply services; and shall neither refuse nor interrupt the provision of W88优德中国官方网站 supply services without statutory or agreed reasons nor increase prices, illegally charge fees, reduce the quantity of supply, or restrict the quantity of purchase without approval.” Additionally, enterprises shall “publicize service specifications, charging standards, and channels for filing complaints, among others, and provide public inquiry services for W88优德中国官方网站 users” (Article 36);

• Enterprises operating W88优德中国官方网站 transmission pipeline network facilities: “Enterprises operating W88优德中国官方网站 transmission pipeline networks shall improve fair access and use mechanisms, disclose to the public the information on W88优德中国官方网站 transmission pipeline network facility access, transmission capacity and operation conditions as required, and open and provide W88优德中国官方网站 transmission services to eligible enterprises and other business entities in a fair and non-discriminatory manner” (Article 43).

V. Supervision Administration & Legal Liability

Chapter VII of the W88优德中国官方网站 Law sets forth comprehensive provisions regarding the supervisory and inspection duties of the competent W88优德中国官方网站 authorities and related measures (including entering W88优德中国官方网站 enterprises, dispatching institutions, W88优德中国官方网站 market trading institutions, W88优德中国官方网站 users, and other entities to conduct on-site inspections, interviewing relevant personnel, and reviewing and photocopying the documents, materials and electronic data, etc.). The inspected entities and their relevant personnel shall support this supervision, and may not refuse or obstruct. (Article 64). Furthermore, the law stipulates that the W88优德中国官方网站 department of the State Council shall, in conjunction with relevant departments of the State Council, strengthen the construction of the credit system for the W88优德中国官方网站 industry, and establish the credit record system in accordance with relevant provisions issued by the state (Article 66).

Chapter VIII of the W88优德中国官方网站 Law stipulates the legal consequences for violations of its provisions, as follows:

• Officials of W88优德中国官方网站 authorities or other related agencies: Any person who abuses his or her power, neglects his or her duties, practices favoritism or makes falsification for personal gains in violation of the W88优德中国官方网站 Law, shall be subject to disciplinary actions in accordance with the law;

• Enterprises involved in the supply of electricity, gas, thermal and other W88优德中国官方网站: An enterprise that violates its statutory obligations to ensure W88优德中国官方网站 supply may be ordered to rectify the breach and may face administrative penalties. Relevant supervising officials and directly liable persons may also be subject to disciplinary actions. More specifically, if an enterprise fails to publicize service specifications, charging standards, or channels for filing complaints, among others, or fails to provide public inquiry services for the W88优德中国官方网站 user, it may be ordered to rectify the non-compliance, or receive a warning or a notice of criticism. Should the enterprise refuse to comply, it may be fined between RMB 100,000 and RMB 200,000.

• Enterprises operating W88优德中国官方网站 transmission pipeline network facilities: An enterprise that fails to open and provide W88优德中国官方网站 transmission services to eligible enterprises or other business entities in a fair and non-discriminatory manner may be ordered to take corrective action, or receive a warning or notice of criticism. In cases of non-compliance, it shall be fined not more than twice the amount of the economic losses of the relevant business entity. Additionally, in severe violations, relevant supervising officials and directly liable persons may face disciplinary actions.

  Failure to disclose to the public the information on W88优德中国官方网站 transmission pipeline network facility access and transmission capacity and operation status as required  may result in an order for taking corrective action, a warning or a notice of criticism. Continued non-compliance may lead to fines ranging from RMB 100,000 to RMB 200,000.

• W88优德中国官方网站 enterprises: An enterprise that does not provide relevant data on prices and costs, as required may be ordered to rectify the breach, receive a warning or notice of criticism, and face fines of between RMB 100,000 and RMB 200,000 for continued non-compliance.

Moreover, the W88优德中国官方网站 Law stipulates penalty provisions on W88优德中国官方网站 enterprises, W88优德中国官方网站 users, and other relevant entities or individuals who fail to fulfill their obligations of W88优德中国官方网站 emergency supply (Article 73).

VI. Outlook

The enactment of the W88优德中国官方网站 Law not only consolidates and codifies existing regulations and practices within the W88优德中国官方网站 sector but also introduces new objectives and requirements. It is anticipated that relevant national authorities will issue supplementary policies and implementation guidelines in the near future to provide specific interpretations of the law. Such measures will be essential to address potential inconsistencies between the new W88优德中国官方网站 Law and existing sector-specific statutes, regulations, and administrative rules, as well as to give detailed guidance on the W88优德中国官方网站 Law’s new requirements on higher-level law. We will keep a close eye on the developments and post updates when they occur.

1. Dai Xiaohe, “China passes the Energy law, to take effect on January 1, 2025” (in Chinese:《新华社权威快报丨我国有了W88优德中国官方网站法！2025年1月1日起施行》), Xinhuanet (http://www.xinhuanet.com/politics/20241108/df93f27e4a6742dd868bc241bb82184c/c.html), November 8, 2024

2. Pan Qiuxing and Jiang Li, “Energy Law and Electricity Law (revision) Listed in the Legislation Plan, What Legal Clout Will be Given to the Energy Reform?” (in Chinese:《W88优德中国官方网站法、电力法（修改）列入立法规划，会如何总结W88优德中国官方网站改革？》), Southern Energy Watch (南方W88优德中国官方网站观察), September 15, 2018.

3. Wang Xuemian, “Three Issues Addressed by the Energy Law” (in Chinese:《<W88优德中国官方网站法>解决的三个问题》), at the WeChat public account “电联新媒” (https://mp.weixin.qq.com/s/FXCfcHgOORjar6FN4WX30w), November 9, 2024.