With a cumulative score of 2.36, Mainland China ranks number 2 among emerging markets and number 13 in the global ranking.
- Emerging markets
2.44 / 5
2.55 / 5
1.95 / 5
Net-zero goal and strategy
Mainland China has set goals to peak its carbon emissions before 2030 and reach net-zero before 2060. The government updated its Nationally Determined Contribution, or its plan to help achieve the goals of the Paris Agreement, in December 2020 with new targets, including a 65% decline in GDP carbon intensity by 2030, compared with 2005.
Nationally Determined Contributions (NDC)
The long-term strategy submitted to the United Nations Framework Convention on Climate Change in 2021 stated further that Mainland China’s electricity sector would reach carbon peaking even earlier, so that 2030’s CO2 level would be some 15% lower than the peak.
Fossil fuel phase-out policy
President Xi Jinping announced in April 2021 that the country will start phasing down coal consumption from 2026-30, despite a later saying that “energy security” (mainly relying on coal) remains a high priority. He has also promised not to support any new-build of coal power in overseas countries starting from late 2021.
Mainland China’s power market is undergoing a series of changes that will impact both generation and retail. For renewable energy, generous subsidies that spurred rapid growth are coming to an end, except for biomass and some rooftop PV. It is still unclear whether policy makers will extend feed-in tariffs or deploy auctions for future projects. So far, decisions are made on an annual and province-by-province basis.
Power prices and costs
Retail liberalization now allows wind and solar assets in at least 28 of Mainland China’s 31 provinces to sell power directly to end users. Spot trading of electric power has also taken place in at least 8 pilot provinces. The sale of coal-fired power, which still dominates the power system, has been liberalized in most of the country.
For renewable energy, Mainland China launched its renewables portfolio standards (RPS) in 2020, mandating power consumers and retailers to source a set share of clean energy. Mainland China has imposed caps on the lifetime ‘hours of generation’ for which subsidy will be paid for all existing and new renewables projects. BloombergNEF categorizes it as a retrospective cut on subsidies, as it alters the earlier practice that subsidized the full actual generation.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
There are no formal barriers to private sector participation in developing clean energy assets. However, private players face general disadvantages when it comes to obtaining local permits to construct, permits for grid connection, or obtaining cheap debt financing, while state-owned companies are often treated preferentially.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
Mainland China is a global leader in electric vehicles (EVs). It currently has a target for EVs to account for 20% of passenger vehicle sales by 2025 and build 4.8 million chargers by 2020.
The government provides upfront purchase grants for EVs, although the level of support has been decreasing, and exempts EVs from purchase taxes.
Fuel economy standards
Does the country have a fuel economy standard in place?
In the building sector, Mainland China's central government encourages heating supplied using geothermal, biomass and solar. National building standards mandate energy efficiency levels for residential and public buildings as well as building heat energy consumption.
Energy efficiency policy
Does the country have a national energy efficiency plan?
Energy efficiency policy
Are there minimum energy performance standards for buildings?
Together with local governments, it subsidizes the adoption of low-carbon heating. Most financial incentives for low carbon building improvements differ by region. In some, geothermal projects may receive a 50% rebate from the government.
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