17% "Subtraction": Multiple Green Tracks Containing "Addition" Opportunities

Unit reduces CO₂ emissions per GDP by 17%; fully implements dual control systems for total carbon emissions and intensity; establishes a National Low-Carbon Transition Fund to cultivate new growth points such as hydrogen energy and green fuels…

The draft outline of the 14th Five-Year Plan and this year’s government work report propose many new indicators and ideas, outlining a new vision for China to accelerate its comprehensive green transformation. The wording highlights both the “subtraction” of full-chain, all-around carbon reduction and the “addition” of multiple green sectors.

全面转向碳排放双控

“Compared to the 14th Five-Year Plan, the draft outline of the 15th Five-Year Plan emphasizes a stronger ‘low-carbon’ requirement in implementing green development concepts,” said Yuan Da, Secretary General of the National Development and Reform Commission, at a recent briefing.

Indicators are the “yardstick” for measuring policy goals and guidance. A review shows that among the eight binding social and economic development indicators during the 15th Five-Year period, five are related to green and low-carbon development. Notably, it proposes a 17% reduction in CO₂ emissions per unit of GDP.

What considerations underlie this setting? According to Dong Zhanfeng, Director of Policy at the Environment Planning Institute of the Ministry of Ecology and Environment, this goal connects the carbon reduction achievements of the 13th and 14th Five-Year Plans, taking into account the 2030 peak and 2035 long-term targets. It ensures the timely achievement of peak emissions while leaving room for traditional industry upgrades and energy structure transformation.

It is also noteworthy that the draft outline adjusts the “energy consumption per unit of GDP” indicator from the 14th Five-Year Plan to the “proportion of non-fossil energy in total energy consumption,” and proposes the implementation of dual control systems for total emissions and intensity, along with establishing incentive and constraint mechanisms covering local carbon assessments, industry carbon management, enterprise carbon accounting, project carbon evaluation, and product carbon footprints.

2026 marks the first year for China to shift from comprehensive energy consumption dual control to carbon emission dual control. The government work report for the first time proposes a reduction of about 3.8% in CO₂ emissions per unit of GDP.

“Previously, the focus was mainly on the quantity of energy consumption, without distinguishing energy quality. Now, it is directly converted into CO₂ emissions, reflecting a deep governance logic change that helps guide the use of clean energy throughout the entire production and sales process,” suggested Zhao Jianguo, Director of the Engineering Research Center for Coal-based Ecological Carbon Sink Technology at Shanxi Datong University and a National People’s Congress delegate. He advocates strengthening technological innovation and improving a national carbon sink measurement and monitoring system aligned with international standards.

Implementation of the Ten-Year Action to Double Non-Fossil Energy

Advancing and achieving carbon peaking steadily and accelerating the transition to “new and green” energy are top priorities.

During the 14th Five-Year period, China’s renewable energy installed capacity is expected to reach about 60%, contributing over 50% to global new renewable energy installations.

“During the 15th Five-Year period, we will vigorously develop non-fossil energy, accelerate the construction of a new power system, ensure that new electricity consumption is covered by additional clean energy, and push for peak coal and oil consumption,” Yuan Da said.

Implement the ten-year doubling of non-fossil energy; build clean energy bases such as the “Three North” wind and solar power projects, Southwest hydropower, wind, and solar integration, coastal nuclear power, and offshore wind; develop green hydrogen, ammonia, and alcohols; actively promote solar thermal power; accelerate smart grid construction; and vigorously develop new energy storage technologies. The draft outline of the 15th Five-Year Plan releases many signals for industry development.

Dong Zhanfeng believes that industries such as new energy and energy storage will benefit from development dividends, and small and medium-sized enterprises will gradually integrate into the green division of the industrial chain, fostering new green growth poles.

The China Electricity Council estimates that by 2026, new renewable energy power generation capacity could exceed 300 million kilowatts. By the end of the year, wind and solar power combined capacity will account for half of total power capacity, with solar power capacity surpassing coal power for the first time.

As the share of renewable energy increases, the construction of new power systems faces challenges such as safety, stability, flexible regulation, and supply-demand balance.

“‘New’ in the new power system is not only about energy structure adjustment but also about comprehensive innovation in concepts, technology, and models,” said Jiang Yi, member of the National Committee of the Chinese People’s Political Consultative Conference, Chairman and Party Secretary of China Huadian Corporation. He recommends strengthening collaborative innovation, deepening high-value applications of ‘AI + energy,’ and establishing policies that facilitate the effective absorption and development of renewable energy, along with a unified national electricity market system to promote renewable energy integration.

Cultivating New Growth Points like Green Fuels

A transformation centered on “reducing carbon and increasing greenery” is unfolding. The outline of the 15th Five-Year Plan and the government work report reveal its framework.

On one hand, “subtraction” involves implementing key industry energy-saving and carbon reduction projects, promoting low-carbon alternatives in transportation, and improving energy efficiency in emerging fields like data centers and 5G base stations.

On the other hand, “addition” involves vigorously developing green and low-carbon technologies and industries, and orderly shifting high-energy-consuming industries to regions rich in renewable resources. “About 100 national zero-carbon parks will be built, and over 10,000 kilometers of zero-carbon transportation corridors are planned,” Yuan Da disclosed.

In the future, “low-carbon” will become a core competitive factor for industries and enterprises. Yang Quanhong, Professor of the Beiyang Chair at Tianjin University’s School of Chemical Engineering and a member of the CPPCC, believes that accelerating the green transformation will create opportunities in green energy, energy storage, and other technological industries, as well as in carbon management and green supply chains. Zhao Jianguo is optimistic about the prospects of zero-carbon parks, factory construction, and carbon sink trading.

Notably, this year’s government work report also mentions the “National Low-Carbon Transition Fund” and “green fuels” for the first time, signaling China’s commitment to energy system transformation.

“Decarbonization in sectors like shipping, aviation, heavy transportation, and some industrial processes is difficult through electrification alone,” Yang Quanhong said. Developing green fuels is not only a technical path for low-carbon transformation but also a way to create new industrial chains and global market competition patterns. Green fuels convert large amounts of variable renewable energy into storable, transportable energy products like green methanol, green hydrogen, and green ammonia, enriching renewable energy utilization methods. They are also expected to become a new form of international energy trade.

Hanfeng, Director and Party Secretary of Qingdao Petrochemical Co., Ltd., suggested developing detailed, stepwise biomass fuel development plans aligned with the 15th Five-Year goals, optimizing fiscal and financial support policies, focusing on core technological breakthroughs, and precisely planning industrial ecosystems.

Cinda Securities’ research report believes that with improvements in carbon pricing mechanisms, technological cost reductions, and policy support, green fuel development is expected to enter a rapid growth phase after 2030, providing key support for global carbon neutrality goals. Investment opportunities should focus on hydrogen production equipment, hydrogen refueling stations, green hydrogen and ammonia operators, and upstream and downstream suppliers of sustainable aviation fuels.