Energy Insider: China Passes Long-Awaited Energy Law, Beijing’s $25 Billion Climate Support for Developing Nations

In a significant development, China has passed its first energy law, a legislative framework nearly two decades in the making. The law, which will take effect on January 1, 2025, outlines comprehensive guidelines for the country's energy sector, including aspects like planning and innovation. Key elements incorporated in the law's draft were time-of-use tariffs aimed at modifying power consumption patterns to manage peak electricity demand. This legislation places a notable emphasis on energy security, which is considered fundamental for pursuing energy transition and achieving "dual carbon" objectives. The law's formation gained momentum after President Xi Jinping announced China's 'dual carbon' goals, underscoring its importance in the country's environmental strategy. [para. 3][para. 4][para. 5][para. 6]

China has mobilized over 177 billion yuan ($24.9 billion) in project funds since 2016 to support clean energy transitions in developing countries. At the COP29 U.N. climate summit, Chinese Vice Premier Ding Xuexiang advocated for increased financial support and technology transfer from developed nations to these countries. This marks the first instance of China referring to these investments as "mobilization" rather than under South-South cooperation, potentially indicating a broader range of funding sources. Despite urging developed countries to bridge the climate finance gap by 2025, China faces pressure to contribute to climate financing goals discussed at the summit. [para. 7][para. 8][para. 9][para. 10]

A major new offshore solar farm in Shandong province has been connected to the grid, according to Guohua Capital, part of CHN Energy. The project's initial phase began generating electricity on November 13, and when completed, the farm will cover approximately 1,223 hectares with a capacity of one gigawatt, capable of producing 1,780 gigawatt-hours of electricity. China is actively expanding offshore solar power to harness marine energy resources, although challenges such as regulatory approvals remain. The State Council's approval for Guohua's use of the sea area signifies progress, marking the first approval of its kind in Shandong. [para. 11][para. 12][para. 13][para. 14]

At the 15th Caixin Summit, Mei Dewen, Vice President of China Beijing Green Exchange, called for establishing a unified global carbon market, highlighting the global impact of carbon emissions. This call aligns with discussions at COP29 on finalizing carbon credit trading rules, potentially setting the stage for a global market. Mei emphasized the significance of China's voluntary carbon credits program, or China Certified Emission Reductions (CCER), in bolstering the effectiveness and international influence of China's carbon market. This scheme assists companies in reducing carbon costs and supports energy restructuring. [para. 15][para. 16][para. 17][para. 18]

The EU's ambassador to China, Jorge Toledo Albiñana, proposed a "level playing field" as an alternative to tariffs in the ongoing EU-China electric vehicle (EV) trade discussions. Amid talks to resolve issues surrounding subsidies that allegedly undercut European EV makers, the EU approved tariffs following a year-long investigation. Both parties have yet to find a mutually agreeable solution, though negotiations continue, with price undertakings considered as an option. The dispute follows China's retaliatory investigations into EU dairy and brandy imports, illustrating the complexity of EU-China trade relations. [para. 19][para. 20][para. 21][para. 22][para. 23]