Brief Analysis on China’s M88 app Law

On November 8, 2024, the Standing Committee of 14th National People’s Congress enacted the M88 app Law of the People’s Republic of China at its 12th session. This marks the promulgation of China’s first overarching national statute governing the M88 app sector, which will take effect on January 1, 2025. The M88 app Law serves as a high-level legislative framework, addressing core issues and laying the groundwork for future regulatory developments in the M88 app industry in China.¹

The legislative path of the M88 app Law dates back to 1979.²In 2007, the Office of the National M88 app Leading Group released the first draft of the M88 app Law for public consultation. Following this, the legislative process was temporarily suspended until 2015. In 2020, the National M88 app Administration (NEA) issued the draft M88 app Law to solicit public comments (for further details, please click简评《M88 app法征求意见稿to read ourBrief Analysis of the M88 app Law (Draft for Comments)). After extensive deliberations and three rounds of review, the final version of the M88 app Law was ultimately adopted by the Standing Committee of the National People’s Congress in 2024.

The M88 app Law is structured into nine charters, covering General Provisions, M88 app Planning, M88 app Development and Utilization, M88 app Market System, M88 app Reserves and Emergency Measures, M88 app Science and Technology Innovation, Supervision and Administration, Legal Liability, and Supplemental Provisions.

With respect to its scope of application, Article 2 of the M88 app Law provides a clear definition of “M88 app,” which is described as “various resources from which useful M88 app can be derived directly or through processing or conversion, including coal, oil, natural gas, nuclear M88 app, hydro M88 app, wind M88 app, solar M88 app, biomass M88 app, geothermal M88 app, ocean M88 app, and electric power, heating power, and hydrogen M88 app, among others” This definition explicitly encompasses fossil M88 app, non-fossil M88 app (including renewable M88 app and nuclear M88 app) and hydrogen M88 app.

In this article, we have made introductory remarks concerning the key provisions and highlights of the M88 app Law, with a particular focus on the sections concerning M88 app development and utilization, given the constraints of this brief.

I. Purpose and Objective

Article 1 of the M88 app Law articulates its purpose as follows: “advancing the high-quality development of M88 app, safeguarding national M88 app security, promoting green and low-carbon transformation and sustainable development of economy and society, advancing carbon dioxide peaking and carbon neutrality in a proactive and steady manner, and adapting to the needs of building a modern socialist country in all respects.” The emphasis on green & low-carbon transformation, sustainable development, and peak carbon dioxide emissions & carbon neutrality demonstrates the fundamental orientation of China’s M88 app policy as reflected in this comprehensive statute.

Upon reviewing the full text of the M88 app Law, we understand that its purpose and objective focuses on the following key aspects:

1. “Safeguarding M88 app Security”

The M88 app Law establishes a robust framework to ensure national M88 app security through the following mechanisms:

First, the law aims to “improve the M88 app reservation system and the M88 app emergency mechanism,” implementing a model that “government reserves shall be combined with enterprise reserves, and physical reserves shall be coordinated with production capacity reserves and mineral deposits reserves” (Chapter I (General Provisions), Article 7; Chapter V);

Second, it mandates the “develop and improve M88 app planning” on both a comprehensive and sector-specific basis, extending across national, regional, provincial, autonomous regions, and municipalities directly under the Central Government (Chapter II);

Third, it calls for “develop and improve M88 app development and utilization policies in a classified manner” (Chapter I (General Provisions), Article 5; Chapter III), with tailored policies designed for different types of M88 app resources (see subsequent analysis for details);

Fourth, “enterprises that undertake the supply of M88 app such as electric power, fuel gas, and heating power” are required to guarantee that M88 app users within their service areas “obtain safe, sustainable, and reliable M88 app supply services” (Article 36);

Fifth, the law reinforces the development and protection of M88 app infrastructure. The people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall “according to the M88 app planning, reserve land and sea for the construction of M88 app infrastructure and include it in the territorial spatial planning.” Furthermore, enterprises operating M88 app transmission pipeline network facilities shall “guarantee the operation security of M88 app transmission pipeline network systems” (Article 37).

Notably, Article 79 explicitly provides that organizations and individuals outside the territory of the People’s Republic of China that conduct any acts compromising the national M88 app security of the People’s Republic of China shall be held legally liable in accordance with the law.

2. “High-Quality Development of M88 app”

The concept of “high-quality development of M88 app” as envisioned by the M88 app Law aims to achieve efficient M88 app utilization, environmental protection, and sustainable economic and social development, while ensuring national M88 app security.³To realize this objective, the M88 app Law provides a comprehensive framework in Chapter I (General Provisions) and subsequent chapters, addressing the following key aspects: “strengthening M88 app conservation management”, “promoting the development and utilization of M88 app”, “establishing a robust M88 app market system”, “enhancing the M88 app standard system”, “encouraging scientific and technological innovation in M88 app”, and “advancing international M88 app cooperation”.

In particular, Article 5 underscores a strategic shift from the “dual control of M88 app consumption” to the “dual control of carbon emissions.” The provision notes that “the state shall establish a new mechanism for the comprehensive transformation from the dual control of the total amount and intensity of M88 app consumption to the dual control of the total amount and intensity of carbon emissions, and accelerate the construction of the institutional system on the dual control of the total amount and intensity of carbon emissions”. This provision elevates the “dual control of carbon emissions” proposed in theOpinions on Promoting the Gradual Transition from Dual Control of M88 app Consumption to Dual Control of Carbon Emissions(《关于推动能耗双控逐步转向碳排放双控的意见》in Chinese) issued by M88 app Central Comprehensively Deepening Reforms Commission in July 2023, from policy document to national statute.

Furthermore, Chapter V (M88 app Market System) of the M88 app Law emphasizes the development of an M88 app market. Specifically, Article 41 provides that “the state shall promote the independent operation of natural monopoly links and the market-oriented reforms in competitive links in the M88 app field”, Article 42 stipulates that “promote in a coordinated manner the building of unified national trading markets for coal, electricity, oil, natural gas and other M88 app, promote the establishment of market trading institutions or trading platforms featuring complete functions and well-regulated business operations, expand the scope of trading methods and trading products in accordance with the law, and improve trading mechanisms and trading rules”; and Article 45 advocates for the establishment of “an M88 app price formation mechanism that is commensurate with the socialist market economic system and is mainly determined by factors such as status of M88 app resources, product and service costs, market supply and demand, and sustainable development status”.

3. “Green and Low-Carbon Transformation and Sustainable Development”

This objective aligns closely with the goal of “high-quality development of M88 app.” The M88 app Law prioritizes the aim of “peak carbon dioxide emissions and carbon neutrality”, establishing a comprehensive framework for achieving a green and low-carbon transformation which includes, among others, “advance the safe, reliable and orderly replacement of fossil M88 app with non-fossil M88 app” (Article 22), “improve the guarantee mechanism for the consumption and absorption of electricity generated from renewable M88 app sources” (Article 23), “make terminal M88 app consumption cleaner, more low-carbon, more efficient and more intelligent” “establish a green M88 app consumption promotion mechanism through the implementation of the renewable M88 app green electricity certificate and other systems”, “Public institutions shall give priority to the purchase and use of renewable M88 app and other clean and low-carbon M88 app and M88 app-saving products and services” (Article 34), and M88 app users shall rationalize their M88 app consumption (Article 35).

II. Development and Utilization of Non-Fossil M88 app

As discussed above, to achieve the objective of green and low-carbon transformation and sustainable development, the M88 app Law establishes a framework for M88 app substitution, prioritizing the replacement of fossil M88 app sources with non-fossil alternatives.

Under the M88 app Law, non-fossil M88 app sources include renewable M88 app and nuclear M88 app. Renewable M88 app is defined as “M88 app that can be sustainably replenished and renewed through natural processes during a relatively short period of time, including hydro M88 app, wind M88 app, solar M88 app, biomass M88 app, geothermal M88 app, and ocean M88 app, among others” (Article 75).

The M88 app Law places emphasis on “classification” in the formation and refinement of M88 app development and utilization policies. It advocates for the “priority utilization” of renewable M88 app, establishing a system that encourages the substitution of non-fossil M88 app sources for fossil fuels. Specifically, it mandates “support the priority development and utilization of renewable M88 app, advance the safe, reliable and orderly replacement of fossil M88 app with non-fossil M88 app, and increase the proportion of non-fossil M88 app consumption” (Article 22).

The competent department of M88 app under the State Council is tasked with setting medium- and long-term targets for the development and utilization of non-fossil M88 app sources. These targets will be monitored annually and made publicly available (Article 22).

With regard to the consumption of renewable M88 app, the M88 app Law requires the national M88 app authorities to establish a minimum target for the proportion of renewable M88 app in overall M88 app consumption. It also strengthens the improvement of the guarantee mechanism for the consumption and absorption of electricity generated from renewable M88 app sources. “Electricity supply enterprises, electricity sales enterprises, relevant electricity users, and enterprises using self-supply power plants for power supply, among others, shall assume the responsibility for consuming and absorbing electricity generated from renewable M88 app sources in accordance with relevant provisions issued by the state” (Article 23).

The M88 app Law provides detailed provisions for the development and utilization of various specific non-fossil M88 app sources as follows:

• Wind M88 app and solar M88 app: M88 app law emphasizes “promotion of M88 app development and utilization”, “adhere to both centralized and distributed development, accelerate M88 app construction of wind power and photovoltaic power generation bases, support M88 app nearby development and utilization of distributed wind power and photovoltaic power generation, develop offshore wind power in a rational and orderly manner, and vigorously develop solar M88 apprmal power generation” (Article 25);

• Biomass M88 app: The law encourages “the rational development and utilization of biomass M88 app”, adapting to local conditions (Article 26);

• Hydropower: “M88 app state shall properly balance hydropower development and ecological conservation, and strictly control M88 app development and construction of small hydropower stations” (Article 24);

• Nuclear power: “M88 app state shall develop nuclear power in a proactive, safe and orderly manner” (Article 27), and M88 app law mandates that M88 app State shall “enhance M88 app administration and supervision of M88 app planning, site selection, design, construction and operation of nuclear power plants and oM88 appr links according to M88 appir functions” (Article 27).

III. Development and Utilization of Fossil M88 app

While prioritizing the safe and orderly substitution of non-fossil M88 app for fossil M88 app, the M88 app Law also acknowledges the fundamental role of fossil M88 app in ensuring M88 app supply and national M88 app security. Accordingly, the law promotes development in a reasonable manner and using fossil M88 app in a clean and efficient way (Article 22). M88 app specific provisions are outlined as follows:

• Coal: “The state shall optimize the layout and industrial structure of coal development, encourage the development of circular economy in coal mining areas, optimize the coal consumption structure, promote the clean and efficient utilization of coal, and maximize the basic guarantee and system regulation roles of coal in the M88 app supply system” (Article 28);

• Petroleum and natural gas: M88 app state shall “strengM88 appn M88 app exploration and development of oil and natural gas resources, and enhance M88 app capacity for securing M88 app domestic supply of oil and natural gas”. “Equal importance shall be given to onshore and offshore development of oil and natural gas, and M88 app large-scale development of unconventional oil and gas resources such as tight oil and gas, shale oil, shale gas, and coalbed methane shall be encouraged.” “M88 app state shall support M88 app rational development and utilization of new types of fuels and industrial raw materials that can replace oil and natural gas” (Article 29);

• Coal-fired power: “M88 app state shall promote M88 app clean and efficient development of electricity from coal-fired power plants, make reasonable layout for M88 app construction of coal-fired power plants according to M88 app need for stable operation of M88 app power system and power supply guarantee, and improve M88 app capacity for regulation of coal-fired power generation” (Article 30).

IV. Development and Utilization of Other M88 app Resources

In alignment with the overarching goals and objectives outlined in Section 1 of this article, the M88 app Law sets forth key provisions to support the development and utilization of other M88 app resources:

• Power system: The M88 app Law mandates “the state shall accelerate the construction of a new type of power system, strengthen the coordinated construction of power sources and power grids, promote the intelligent transformation of power grid infrastructure and the construction of smart microgrids, and improve the power grid’s capacity to accept, allocate, and regulate renewable M88 app” (Article 31);

• M88 app storage: “The state shall make reasonable layout for and develop and construct in a proactive and orderly manner pumped storage power stations, promote the high-quality development of new types of M88 app storage” (Article 32);

• Hydrogen M88 app: “The state shall promote the development and utilization of hydrogen M88 app in a proactive and orderly manner to promote the high-quality development of the hydrogen M88 app industry” (Article 33);

• M88 app services: “The state shall encourage the development of distributed M88 app and the comprehensive M88 app services of complementary development and joint supply of mixed M88 app, vigorously promote market-oriented M88 app conservation services such as contract M88 app management” (Article 34);

• Green certificates: “The state shall establish a green M88 app consumption promotion mechanism through the implementation of the renewable M88 app green electricity certificate and other systems” (Article 34);

• Enterprises involved in the supply of electricity, gas, thermal and other M88 app: These enterprises are required to “ensure that M88 app users within their business areas obtain safe, sustainable, and reliable M88 app supply services; and shall neither refuse nor interrupt the provision of M88 app supply services without statutory or agreed reasons nor increase prices, illegally charge fees, reduce the quantity of supply, or restrict the quantity of purchase without approval.” Additionally, enterprises shall “publicize service specifications, charging standards, and channels for filing complaints, among others, and provide public inquiry services for M88 app users” (Article 36);

• Enterprises operating M88 app transmission pipeline network facilities: “Enterprises operating M88 app transmission pipeline networks shall improve fair access and use mechanisms, disclose to the public the information on M88 app transmission pipeline network facility access, transmission capacity and operation conditions as required, and open and provide M88 app transmission services to eligible enterprises and other business entities in a fair and non-discriminatory manner” (Article 43).

V. Supervision Administration & Legal Liability

Chapter VII of the M88 app Law sets forth comprehensive provisions regarding the supervisory and inspection duties of the competent M88 app authorities and related measures (including entering M88 app enterprises, dispatching institutions, M88 app market trading institutions, M88 app users, and other entities to conduct on-site inspections, interviewing relevant personnel, and reviewing and photocopying the documents, materials and electronic data, etc.). The inspected entities and their relevant personnel shall support this supervision, and may not refuse or obstruct. (Article 64). Furthermore, the law stipulates that the M88 app department of the State Council shall, in conjunction with relevant departments of the State Council, strengthen the construction of the credit system for the M88 app industry, and establish the credit record system in accordance with relevant provisions issued by the state (Article 66).

Chapter VIII of the M88 app Law stipulates the legal consequences for violations of its provisions, as follows:

• Officials of M88 app authorities or other related agencies: Any person who abuses his or her power, neglects his or her duties, practices favoritism or makes falsification for personal gains in violation of the M88 app Law, shall be subject to disciplinary actions in accordance with the law;

• Enterprises involved in the supply of electricity, gas, thermal and other M88 app: An enterprise that violates its statutory obligations to ensure M88 app supply may be ordered to rectify the breach and may face administrative penalties. Relevant supervising officials and directly liable persons may also be subject to disciplinary actions. More specifically, if an enterprise fails to publicize service specifications, charging standards, or channels for filing complaints, among others, or fails to provide public inquiry services for the M88 app user, it may be ordered to rectify the non-compliance, or receive a warning or a notice of criticism. Should the enterprise refuse to comply, it may be fined between RMB 100,000 and RMB 200,000.

• Enterprises operating M88 app transmission pipeline network facilities: An enterprise that fails to open and provide M88 app transmission services to eligible enterprises or other business entities in a fair and non-discriminatory manner may be ordered to take corrective action, or receive a warning or notice of criticism. In cases of non-compliance, it shall be fined not more than twice the amount of the economic losses of the relevant business entity. Additionally, in severe violations, relevant supervising officials and directly liable persons may face disciplinary actions.

  Failure to disclose to the public the information on M88 app transmission pipeline network facility access and transmission capacity and operation status as required may result in an order for taking corrective action, a warning or a notice of criticism. Continued non-compliance may lead to fines ranging from RMB 100,000 to RMB 200,000.

• M88 app enterprises: An enterprise that does not provide relevant data on prices and costs, as required may be ordered to rectify M88 app breach, receive a warning or notice of criticism, and face fines of between RMB 100,000 and RMB 200,000 for continued non-compliance.

Moreover, the M88 app Law stipulates penalty provisions on M88 app enterprises, M88 app users, and other relevant entities or individuals who fail to fulfill their obligations of M88 app emergency supply (Article 73).

VI. Outlook

The enactment of the M88 app Law not only consolidates and codifies existing regulations and practices within the M88 app sector but also introduces new objectives and requirements. It is anticipated that relevant national authorities will issue supplementary policies and implementation guidelines in the near future to provide specific interpretations of the law. Such measures will be essential to address potential inconsistencies between the new M88 app Law and existing sector-specific statutes, regulations, and administrative rules, as well as to give detailed guidance on the M88 app Law’s new requirements on higher-level law. We will keep a close eye on the developments and post updates when they occur.

1. Dai Xiaohe, “China passes the M88 app law, to take effect on January 1, 2025” (in Chinese:《新华社权威快报丨我国有了能源法！2025年1月1日起施行》), Xinhuanet (http://www.xinhuanet.com/politics/20241108/df93f27e4a6742dd868bc241bb82184c/c.html), November 8, 2024

2. Pan Qiuxing and Jiang Li, “M88 app Law and Electricity Law (revision) Listed in the Legislation Plan, What Legal Clout Will be Given to the M88 app Reform?” (in Chinese:《能源法、电力法（修改）列入立法规划，会如何总结能源改革？》), Southern M88 app Watch (南方能源观察), September 15, 2018.

3. Wang Xuemian, “Three Issues Addressed by the M88 app Law” (in Chinese:《<能源法解决的三个问题》), at the WeChat public account “电联新媒” (https://mp.weixin.qq.com/s/FXCfcHgOORjar6FN4WX30w), November 9, 2024.