Opinion: China’s New Energy Law Opens Door to Market Reform
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After an 18-year legislative marathon, China has finally crossed the finish line with its comprehensive Energy Law. The Standing Committee of the National People’s Congress passed the legislation on Nov. 8, setting a Jan. 1, 2025, as the implementation date. The law fills a critical gap in China’s energy regulatory framework, which already includes separate laws governing coal, electricity, energy conservation, renewable energy and pipeline protection. As a foundational statute, it not only completes the legal architecture, but provides crucial guardrails for energy security, transition and development.
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- China has passed a comprehensive Energy Law to be implemented in January 2025, providing a foundational statute for energy security and market transition.
- The law emphasizes market mechanisms, separating monopoly segments from competitive sectors, and supports fair market participation under clear rules.
- Market reforms, initiated in the 2010s, continue with the recent law, addressing outdated production capacity and enhancing carbon markets for sustainable development.
- People's Bank of China
- The article mentions Zhou Xiaochuan, former governor of the People's Bank of China, advocating for stronger carbon markets and effective incentive mechanisms for renewable energy. He suggests reducing the current practice of free carbon quota allocation to the power sector to enhance carbon trading and improve price discovery.
- Boao Forum for Asia
- The Boao Forum for Asia is a non-profit international organization that promotes economic integration and cooperation among Asian countries and other parts of the world. Established in 2001, it is often compared to the World Economic Forum in Davos. The forum hosts high-level meetings focusing on various issues, including economic growth, development, and environmental sustainability, and serves as a platform for dialogue among leaders in government, business, and academia.
- January 2006：
- 15 government bodies, including the National Energy Office and the National Development and Reform Commission, formed a drafting group for China's Energy Law
- December 2007：
- The drafting group released its first public consultation draft of the Energy Law
- 2013：
- The Third Plenum of the 18th Communist Party Congress initiated price reforms in water, oil, natural gas, and electricity sectors
- 2015：
- Landmark reform directives for the power sector were implemented
- 2017：
- The National Development and Reform Commission and National Energy Administration established expert panels for further refinement of the Energy Law, and reform directives for oil and gas sectors were implemented
- After 2017：
- Further refinement of the Energy Law drafts continued, based on market-oriented principles
- April 2020：
- A new draft of the Energy Law was released
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