On April 10, 2020, the highly anticipated first draft of the "Energy Law of the People's Republic of China" was released for public comment. In fact, China has long lacked a foundational law governing the energy sector. As early as January 2006, a drafting group for the "Energy Law" was established; however, legislative efforts have since stalled due to various reasons. In 2017, under the guidance of the former State Council Legislative Affairs Office and the Ministry of Justice, the National Development and Reform Commission and the National Energy Administration jointly formed an expert panel and working group tasked with drafting and revising this version of the "Energy Law."

Why has the enactment of the Energy Law been repeatedly delayed—now already 15 years in the making? We believe the Energy Law can serve as a guiding framework for China’s entire energy development, addressing numerous overarching, comprehensive, and strategically critical issues. As a highly significant piece of legislation, it demands exceptional care and thorough consideration, given the many complex challenges involved.

(1) The international situation continues to evolve, marked by strategic competition among countries worldwide—particularly between China and the United States. Issues related to climate change and carbon reduction have undergone shifts over the years. After the first commitment period of the Kyoto Protocol expired in 2012, it wasn’t until the Paris Agreement in December 2015 that clear targets were established. Later, the Trump administration withdrew from the Paris Agreement, further exacerbating numerous challenges arising from U.S.-China trade tensions.

(2) Energy spans numerous fields and sectors, requiring the nation to possess strong capabilities in overall coordination and management—both institutionally and operationally. At different stages of development, the scale, roles, and significance of various energy sources also vary significantly. Moreover, the rise of new energy sources represents, to some extent, a revolutionary shift away from traditional energy systems. Balancing the interests of diverse stakeholders is yet another critical issue that must be addressed. For China’s current stage of development, many of these challenges have gradually become clearer over time, as history has validated their complexities. Seizing this opportune moment to advance the drafting and enactment of the Energy Law aligns perfectly with both the future direction of energy development and the country’s overarching strategic needs. It will also contribute to the further refinement and improvement of existing specialized laws.

The National Energy Administration has released the "Energy Law of the People's Republic of China (Draft for Solicitation of Comments)," which spans over 14,000 characters. The legislation clearly outlines its core objectives: ensuring energy security as the top priority, followed by optimizing the energy structure, and then enhancing energy efficiency.

The "Energy Law of the People's Republic of China (Draft for Soliciting Opinions)" outlines clear development directions for energy exploration and processing across various sectors: The state encourages the efficient, clean, and sustainable development and utilization of energy resources, supports prioritizing the development of renewable energy, promotes rational exploitation of fossil fuel resources, fosters distributed energy systems tailored to local conditions, and advances the substitution of non-fossil fuels for fossil fuels, as well as low-carbon energy sources for high-carbon ones. Additionally, the law backs the development and application of new types of fuels and industrial raw materials that can replace oil and natural gas.

The "Energy Law of the People's Republic of China (Draft for Soliciting Opinions)" employs carefully chosen terminology in its specific areas of focus:

(1) In the fossil energy sector: For instance, appropriately developing coal-to-fuel and chemical feedstock technologies reflects, to some extent, the nation's stance on coal-to-chemicals. Meanwhile, oil and natural gas development continues to emphasize both onshore and offshore projects, with an accelerated push for offshore oil and gas field development—clearly underscoring the growing importance of offshore energy exploration. Additionally, allowing market players that meet entry criteria to participate in oil and gas exploration and production highlights that market-oriented reforms in the oil and gas sector are a key strategic direction. In the natural gas domain, promoting rational development and increasing the share of natural gas in primary energy consumption further underscores the need for "reasonable" growth.

(2) Non-fossil energy sector: Clearly outlines priorities for advancing and accelerating the development of non-fossil energy sources such as renewable energy and nuclear power. At the same time,

1) Strengthened the performance assessment of binding indicators in the annual plan;

2) Minimum guaranteed proportion indicator for energy consumption and the market-based quota trading system;

3) It also calls for the power grid to expand the scope of renewable energy integration, while advancing smart grid technologies and energy storage solutions. These measures are specifically aimed at addressing the practical challenges encountered in the development of renewable energy—and represent steps the country is gradually taking to resolve them.

In wind and solar power generation: We will adhere to the principle of simultaneously promoting centralized and distributed approaches, while integrating local consumption with transmission to external markets. As for hydropower development, we will clearly advance the construction of large-scale hydropower bases in an orderly manner, while also moderately developing small- and medium-sized hydropower stations. Nuclear power development will follow the paramount principle of safety, with investment and operational market access regulated by the State Council.

In addition, the draft Energy Law of the People's Republic of China also strategically and systematically guides energy development and utilization activities through comprehensive planning, promoting clean and low-carbon energy development. It emphasizes the scientific advancement of energy exploration and energy infrastructure construction to enhance energy supply capacity, while also supporting reforms in energy-related systems and mechanisms, thereby fully advancing the marketization of the energy sector.