On 29 May, China’s State Council issued a detailed action plan for energy saving and carbon reduction for 2024-2025, aiming at accelerating actions for reaching the energy efficiency target during China’s 14th Five-Year Plan (FYP). The target was to reduce energy consumption per unit of GDP by 13.5% by 2025 compared to 2020. By the end of 2023, energy intensity has however only decreased by 7.3%.
The plan sets major goals for cutting fossil fuel consumption, increasing the use of clean energy and implementing major energy-saving and carbon transformations in key sectors like steel and transport.
Key goals
The plan aims to reduce energy consumption by 2.5% and CO2 intensity by 3.9% by the end of 2024. It also targets an increase in non-fossil energy consumption to 18.9% in 2024 and 20% in 2025. Over the next two years, the plan projects a reduction of approximately 50 Mt of standard coal and a decrease in emissions by around 130 Mt of CO2. Additionally, it seeks to reduce the energy intensity (energy consumption per unit of added value) of large industrial enterprises by 3.5% in 2024.
The action plan includes 27 measures in ten areas, through which around 50 million tons of standard coal are to be saved annually. Over the next two years, approximately 260 million tons of carbon dioxide are to be saved in key areas, equivalent to about 2% of China’s total emissions last year.
Key measures
Sectoral carbon reduction and energy consumption: To achieve these goals, the plan calls for strict control of coal consumption, optimization of oil and gas use, increased non-fossil energy consumption, and energy savings and carbon emission reductions in industries such as steel, petrochemicals, non-ferrous metals, building materials, architecture, transportation, public institutions, and energy-using products and equipment.
Steel industry: China will strengthen the control of steel production capacities, and accelerate the industrial transition toward energy saving and decarbonization. It is strictly prohibited to add new steel production capacity in areas such as machining, casting, ferroalloy and others.
Transport Industry: The plan also includes major steps to reduce carbon emissions in the transport industry, with concrete plans for infrastructure upgrades and the promotion of new energy vehicles. China will accelerate the elimination of old motor vehicles, tighten the energy consumption limits for operating vehicles, and gradually lift restrictions on purchasing new-energy vehicles in various regions.
Management mechanisms: The plan emphasizes intensified responsibilities and evaluations, strengthened supervision, and the adoption of statistical accounting for energy consumption and carbon emissions. It proposes strengthening the energy-saving review and approval process for environmental impact assessments of fixed-asset investment projects and enhancing supervision on energy saving.
