context: The dual control scheme, first introduced in the 11th 5-year plan, has been one of the primary policy tools regulating energy consumption, resulting in provinces enforcing ad hoc industry shutdowns to meet targets. As the share of renewable power in the energy mix grows and attention turns to emissions, rather than energy, the policy poses conflicting objectives. The 2021 Central Economic Work Conference called for transitioning from a focus on energy consumption and intensity to carbon emissions ‘as soon as possible’. Meanwhile, Beijing exempted newly-added renewable power consumption from dual control assessments, a first step to relaxing the scheme’s constraints on renewable power. It was hoped that the emissions-focussed dual control system would be introduced by 2025, which would allow China to set a specific year and quantity for its emissions peak. This new work plan, however, confirms a slower timeline. Binding absolute emissions targets will only be introduced once emissions have peaked, so probably in the late 2020s at the earliest.
Binding targets for carbon intensity (emissions per unit GDP) will be introduced into the system of national socioeconomic development goals during the 15th 5-year plan, per ‘Work plan for accelerating building the carbon emissions dual control system’, issued by State Council on 2 Aug 2024.
The plan also calls for estimating absolute emissions, and clarifies that the current dual control indicators centred on energy consumption and intensity will be phased out.
The biggest difference between the emissions-focussed regime and the energy-focussed one will be that the new system exempts renewable power, according to Wang Weiquan 王卫权 China Energy Research Society Renewable Energy Special Committee deputy secretary. The energy-focussed indicators run counter to development of renewables, whereas the new system promotes their development, says Wang.
The plan lays out a road map for setting up the new emissions governance regime. The plan divides the carbon peaking and net zero objective into three stages
- up to 2025
- carbon emissions statistics and accounting system to further mature
- emissions accounting and carbon footprint standards will be released and implemented for some industries
- a national GHG (greenhouse gas) emissions factor database will be basically established and regularly updated
- quantification, statistical and monitoring capacities to all be enhanced
- forge a foundation from which to implement emissions-based dual control regime nationwide in the 15th 5-year plan
- 15th 5-year plan
- implement an emissions-focussed dual control regime with emissions intensity as the centre and absolute emissions caps as the secondary component
- setting up carbon peaking and net zero integrated assessment systems
- strengthening emissions accounting capacity in key industries
- ensuring that emissions peak before 2030
- post-peak
- shifting the emissions-focussed dual control regime to focus on absolute emissions, with emissions intensity as the secondary component
- setting up a net zero assessment mechanism
- steadily reducing absolute emissions
Industry insiders say there are many challenges facing the scheme’s roll out. The biggest policy bottlenecks, they say, are the lack of clear assessment and verification mechanisms.
Setting national targets is relatively easy, but the hard part will be decomposing them into local targets based on local endowments, economic power, industrial structures and energy structures, argues Lin Boqiang 林伯强 Xiamen University China Energy Policy Research Institute director.
It will be difficult to get all localities on side, he says. Games of interest will emerge between provinces and the centre, Lin predicts, but cleaner development is still the overall trend.