Following a weeklong meeting in March, China’s 14th Five-Year Plan (FYP), which covers 2021-2025, was approved by the National People’s Congress at the Two Sessions in Beijing. The plan signals the direction of China’s economic, environmental and social development in a critical period in which China will lay the foundation for its climate goal to peak carbon emission by 2030, reiterated by President Xi Jinping at the China-France-Germany virtual climate summit April 16.
How will the 14th FYP steer the country’s development for the next five years, and what does it mean for business? In this blog post, we look at the environmental and climate considerations of the new FYP.
An evolving environmental approach: From pollution control to emissions reduction
In the recently released plan, energy and climate targets take center stage. For the first time since 1986, China has omitted a numerical GDP target (Chinese) in its FYP, instead setting longer-term climate goals and introducing the idea of a CO2 emissions cap. The FYP set an 18-percent reduction target for CO2 intensity and a 13.5-percent reduction target for energy intensity from 2021 to 2025.
This marks a significant shift from pollution prevention to carbon emissions reduction.
For the first time since 1986, China has omitted a numerical GDP target in its FYP, instead setting longer-term climate goals and introducing the idea of a CO2 emissions cap.
In the 12th FYP, the Chinese government began dedicating significant funds and high-level attention to reducing energy consumption and greenhouse gas emissions, and it declared war on pollution in 2014. This continued into the 13th FYP, with specific sectoral targets and milestones to eliminate pollution.
In the 14th FYP, energy and climate stand out as a central-policy priority, building on the existing efforts and strategies focusing on ecological and environmental protection.
The 14th FYP will guide sector-specific and regional plans to reduce carbon emissions
The international business community and climate experts have raised questions regarding China’s energy transition and specifically how it will reach its 2030 emission peak goal through actions set in the 14th FYP. These details, especially regarding timeline, road map and the KPIs at the local and sectoral level, will be clarified in the 14th FYP’s forthcoming sector-specific and regional plans. These clarifications are important and worth watching for.
Still, we have information from key ministry and state-owned enterprises, which take the lead in setting direction for policy implementation. For example, the Ministry of Ecology and Environment (MEE) will set targets for nationwide greenhouse gas emission controls between late 2021 and early 2022. These targets will break down those outlined in the FYP at the sectoral and administrative level and will provide greater details concerning road maps and action plans for implementation, evaluation and reporting.
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