POLICY NEWS

China is advancing its electricity market reform as renewable energy deployment accelerates. The National Development and Reform Commission and the National Energy Administration issued new “Basic Rules for the Medium- and Long-Term Electricity Market”, strengthening the role of long-term contracting and introducing more flexible trading arrangements, cross-provincial transactions, and clearer participation rules for new market actors. At the same time, China is expanding market-based electricity pricing by removing fixed time-of-use tariffs in several provinces and refining capacity payment mechanisms for dispatchable power and storage.

With the adoption of China’s first comprehensive “Ecological and Environmental Code” on 12 March 2026, the country takes a significant step toward strengthening its legal framework for environmental governance. Entering into force on 15 August 2026, the Code integrates existing legislation while introducing new legal provisions for emerging areas such as green and low-carbon development.

Issued on 8 April 2026 by four Chinese authorities, the “Action Plan for Promoting the Mutual Empowerment of AI and Energy” shifts from one-way AI deployment in energy to two-way coordinated growth. It aims to ensure that AI computing infrastructure is supplied with clean power, while using AI to make the energy system smarter and more efficient. The plan lays out measures for green data centre power supply and expanded use of AI across grids, renewables, storage and fossil energy sectors. With pilot scenarios launched in June 2026 and milestones for 2027/2030, it seeks to establish a complete AI-energy industrial ecosystem.

On 19 December 2025, the Ministry of Finance of China, in coordination with nine relevant authorities, released the Corporate Sustainability Disclosure Standards No.1 — Climate (Trial) (hereinafter referred to as the “Climate Standard”). The Climate Standard is intended to support China’s goals of carbon peaking and neutrality through top-level design, guiding enterprises from observation to more substantive action. It serves as a policy instrument linking corporate climate governance to capital market behaviour.

On 23 October 2025, the Communist Party of China (CPC) adopted its recommendations for the 15th Five-Year Plan for National Economic and Social Development (2026–2030). The recommendations intend to scale up renewable energy supply, ensure the substitution of fossil fuels, and improve the flexibility and resilience of the national power system. Climate priorities include strengthening carbon governance, enhancing carbon market mechanisms, and building resilience against climate risks. The State Council is now developing the draft outline of the 15th Five-Year Plan, based on the CPC recommendations. During the two sessions in March 2026, the draft outline of the 15th FYP will be reviewed, voted on and potentially adopted before being officially released.

Following the announcement to establish a domestic carbon footprint management system in 2024, the Ministry of Ecology and Environment (MEE), the National Development and Reform Commission (NDRC), and five other government bodies jointly issued the “Guidelines for the Construction of Product Carbon Footprint (PCF) Factor Database” on 12 December 2025.

China’s Ministry of Finance (MoF) issued the “Sustainability Information Assurance Services Standards No. 6101 — Basic Standards (Trial)” in January 2026, following the launch of the Corporate Sustainability Disclosure Standards series in 2024-2025. This establishes a unified regulatory framework for sustainability assurance in China, filling a national regulatory gap in the market and completing the institutional chain from corporate sustainability disclosure to third-party verification.

On 9 October 2025, China’s Ministry of Natural Resources (MNR) issued the “Guideline for the Implementation Assessment of Provincial Spatial Ecological Restoration Plans (Trial)” which aims to standardise the evaluation of provincial ecological restoration initiatives. The assessment introduces a system of 39 indicators to measure progress, benefits, and overall success of restoration efforts at the provincial level. Assessments will be led by provincial natural resources departments with cross-departmental support and will occur every five years, integrating results into the national spatial planning system. The new guideline complements the “Guide for the Compilation of Provincial Spatial Ecological Restoration Plans” (July 2025) and focuses on the evaluation phase.