An analysis of China's energy policy from 1981 to 2020: Transitioning towards to a diversified and low-carbon energy system

The rapid development of China's economy has led to rising energy consumption, particularly since the 2000s when the Chinese economy began to specialize in heavy industries. Primary energy consumption thus rose from 412 Mtoe (million tonnes of oil equivalent) in 1981–3384.4 Mtoe in 2019. As of today, energy consumption still relies for the most part on coal, which represented 57.6% of the Chinese energy mix as of 2019 (British Petroleum, 2020). Coal combustion is largely responsible for air pollution in China (Chen and Xu, 2010; Tong et al., 2018), putting public health at risk (Tilt, 2019; Gao et al., 2017) and also contributes significantly to CO₂ emissions. Since 2006, China has constantly topped international rankings for CO₂ emissions. In 2020, the country emitted nearly 9.9 billion tonnes of CO₂ – 30,7% of global emissions (see Fig. 1). In a 2014 agreement signed with US President Barack Obama, Chinese President Xi Jinping pledged that China's carbon emissions would reach its peak before 2030. In June 2015, this target was confirmed in the Intended Nationally Determined Contributions (INDC) that China submitted to the United Nations (UN). In September 2020, at the UN General Assembly, China re-emphasized its commitment to weigh in on climate change by stating its goal of achieving carbon neutrality by 2060. In October 2021, before the COP 26 (Conference of the Parties), at Glasgow, the Chinese government submitted to the UN its new Intended Nationally Determined Contributions (INDC) which include a peak of carbon emissions before 2030; a carbon neutrality by 2060 but also a decrease in carbon intensity by 65% by 2030 and a 25% share of non-fossil energy sources in the energy mix by 2030. During to the COP 26 (Conference of the Parties), US President Joe Biden and Chinese President Xi Jinping signed a new agreement confirming their cooperation on climate change. Both countries recognize so the gravity and urgency of the climate crisis.

Unsurprisingly, in its efforts to meet these environmental targets, the Chinese government is paying special attention to the energy sector. This sector, like the rest of the economy, has undergone a series of reforms since 1980. The analysis of energy policies within the Five-Year Plans (FYP) of the last four decades (i.e. from the Sixth to the Thirteenth Plan) can account for the environmental focus that has developed over the years. FYPs are the most important government document of China and are economic planning documents that lay out the guidelines and main targets of China's development strategy. Every FYP has its unique characteristics due to the specific period when it is composed and approved. They have been formulated by the Chinese government since 1953, when the first plan was drafted. To date, fourteen FYPs have been issued. The Fourteenth Plan (2021–2025) was officially adopted on the March 11, 2021, at the close of the National People's Congress (NPC) session.

The contents and major targets in the FYPs are changed significantly according to the economic development and social growth conditions. Each FYP contains either a section or chapter related to national energy policy (Yuan and Zuo, 2011). By analyzing the change in energy related contents in the FYPs, notably the target of energy efficiency or carbon intensity, the energy mix ou investissments in renewable energy, the changes in energy policy are examined. The examination of accomplishments and targets learnt in previous FYPs provides an important historical framework for understanding China's current efforts to transition to a low-carbon transition. Indeed, since the advent of the 21st century, energy transition can be defined as a process aimed not only to improve energy efficiency so as to limit the growth of energy needs but also to diversify the country's energy system. On the one hand, a diversified energy system helps secure the country's energy supplies, while on the other hand, it is helpful to reduce CO₂ emissions (Smil, 2017). This transition is often characterized as a low-carbon transition with regard to its target of reducing CO₂ emissions.

Looking back at the last eight FYPs (from the Sixth to the Thirteenth Plan) (1981–2020), one breaks up China's energy policy into three phases: an exclusive focus on energy efficiency (1981–2000); a growing concern for energy security alongside a continued interest in energy efficiency (2001–2010); the integration of climate change as a third in climate change policy (2011–2020). This third goal highlights the start of China's energy transition in 2011. Analysing China's energy policy on the basis of the last eight FYPs confirms most of the research carried out on the evolution of Chinese energy policy and on the set up of a low-carbon energy transition in China (Zhang, 2010; Jiang et al., 2010; Yuan and Zuo, 2011; Li and Wang, 2012; Andrews-Speed, 2012; Zhang et al., 2017; Li and Taeihagh, 2020; Xu, 2021). However, the present article dates the beginning of this transition to the Twelfth FYP.

The Chinese energy system has therefore shifted from intensive reliance on coal to a more diversified system that notably relies on the development of renewable and low-carbon energy. The transition to a more diversified energy system does not allow for a sustainable energy transition. In this article, we consider that a sustainable energy transition process must be based on strong sustainability,¹ i.e. that “critical environmental capacities and qualities cannot be substituted, but must instead be sustained, as prerequisites for social and economic activities and functions » (Haskell et al., 2021, p.1). For China's energy transition to usher in a sustainable energy system, the Chinese government must first enforce all the laws, standards and targets included notably in the five-year plans to local governments. It must also reduce its energy and coal consumption by decoupling it from its economic growth and limit the environmental costs of renewable energy in order to maintain its natural resources. So, the Chinese government needs so to address challenges of three different kinds: institutional, economic and environmental.

This article is structured as follows. Section 2 provides an account of China's current energy situation. Section 3 presents the three phases of China's energy policy evolution over the past four decades. Section 4 discusses the three main challenges that the Chinese government must address if the energy transition initiated in 2011 is to lead to a sustainable transition of the Chinese energy system. Section 5 summarizes research findings and puts forward some policy implications.