Institute for China Studies

China’s Launches 2024-2025 Energy Conservation and Carbon Reduction Action Plan

  • Date: 7 June 2024
  • Tags: China, ESG, Sustainability
  • Reading time: 5 minutes

General Requirements 

The action plan places an emphasis on stability and progress, the strategy aims to ensure that economic growth is sustainable, energy-efficient, and eco-friendly.

Key objectives include:

  • Energy consumption and carbon emissions per unit of GDP will be reduced by 2.5% and 3.9% respectively in 2024.
  • Industrial units will witness a 3.5% reduction in energy consumption.
  • The proportion of non-fossil energy consumption is targeted to reach 18.9% in 2024 and 20% in 2025.

These targets build a foundation for the broader goals set in the “14th Five-Year Plan,” advancing the nation’s green development and solidifying its path toward carbon peak and neutrality.

Key Tasks

To achieve these targets the following key tasks have been defined:

  • Reducing Fossil Energy Consumption

To address the overreliance on fossil fuels, the plan emphasizes reducing and substituting coal, oil, and gas consumption:

  • Coal consumption: Efforts will focus on the clean and efficient use of coal, including the transformation of coal-fired power plants through energy-saving and carbon-reduction reforms. By 2025, scattered coal consumption in key areas will be eliminated, and outdated coal-fired boilers and facilities will be phased out.
  • Oil and gas: Rationalizing oil use and promoting alternatives such as biofuels and sustainable aviation fuels will be a priority. Natural gas consumption will be carefully managed to prioritize residential needs and clean heating in northern regions.

(2) Promoting Non-Fossil Energy

China aims to significantly expand its reliance on non-fossil energy sources to meet power demands while minimizing environmental impact:

  • Renewable energy growth: Large-scale wind and solar power projects will be developed, particularly in deserts and offshore areas. The contribution of non-fossil energy to national power generation will increase to 39% by 2025.
  • Enhanced consumption: Improvements in transmission capacity for wind and solar energy and innovations like microgrids and virtual power plants will bolster renewable energy integration. By 2025, China’s storage capacity will exceed 100 million kilowatts to accommodate the growing renewable energy output.
  • Green energy commitments: Regions lagging in their energy-saving goals will be required to commit to higher shares of non-fossil energy in new projects. By 2024, the issuance of green certificates—which validate renewable energy use—will cover all eligible projects.

(3) Iron and Steel Industry Energy Conservation

The iron and steel sector, a major energy consumer, is a focal point for energy efficiency improvements:

  • Production control: Strict regulations will govern steel production capacity, prohibiting new capacity unless it meets stringent energy and environmental standards. The goal is to increase the share of electric furnace steel production to 15% by 2025.
  • Technological transformation: Advanced technologies such as hydrogen metallurgy and the utilization of waste heat will help reduce emissions. By 2025, 30% of steel production capacity will meet the highest energy efficiency standards, and more than 80% will achieve ultra-low emissions.

Economic, Social, and Ecological Benefits

The action plan is designed to yield significant benefits across economic, social, and ecological domains:

  • Economic benefits: By improving energy efficiency and reducing dependence on costly fossil fuels, industries will see operational cost reductions. The transition to a low-carbon economy also opens up new avenues for innovation, especially in renewable energy technologies and green finance.
  • Social benefits: Health outcomes will improve as pollution from coal and other fossil fuels decreases, leading to cleaner air and a higher quality of life for citizens.
  • Ecological benefits: The plan’s focus on conservation will help preserve natural resources, reduce carbon emissions, and protect ecosystems, contributing to China’s long-term environmental sustainability goals.

Conclusion

The 2024-2025 Energy Conservation and Carbon Reduction Action Plan represents a bold commitment to reshaping China’s energy landscape and meeting the pressing challenges of climate change. Through pragmatic steps in energy consumption reduction, fostering non-fossil fuel energy, and transforming high-energy-consuming industries like steel, China is laying the groundwork for a more sustainable, resilient economy. With clear targets and a robust implementation strategy, the plan supports the dual objectives of economic growth and environmental protection, making substantial progress toward achieving carbon peak and carbon neutrality. 

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