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China has just approved a set of sweeping new energy regulations that will set the tone for the country’s future energy development.

After sitting on the drawing board for nearly 20 years, the long-awaited energy law kicked in on January 1, 2025, after being approved by the country’s top legislature in November.

Largely a round-up of existing policies, it is the top-level legislation in the country’s energy sector and clarifies Beijing’s stance on a wide range of issues, from what types of energy the country promotes to how the news media in the country should report on related topics. It also contains varied provisions aimed at protecting China’s energy industries from geopolitical forces — including actions by the United States.

“There are clearly conflicting priorities,” said Lauri Myllyvirta, a senior fellow at the Asia Society Policy Institute, a think tank based in New York City. “It talks about energy transition and controlling CO2 emissions, but it also talks about promoting coal use and oil and gas production,” he told Cipher.

China is by far the global leader in clean energy, but it’s also the world’s top greenhouse gas emitter. The country’s actions have major implications for the future of the energy transition and efforts to address climate change, particularly as President-elect Donald Trump is vowing for aggressive policies against China.

Here’s what to know about the new law.

Overarching legislation

China has dozens of industry directives, such as the electric power law and the renewable energy law, passed in 1995 and 2005, respectively.

But this new decree sits atop them all, laying out major strategies and rules for China’s energy sector in one place, Zhang Jianhua, head of China’s National Energy Administration, wrote in a recent column.

Comprising nine chapters, the law affirms how the country should plan, develop, use and store various types of energy. It prioritizes renewable energy development but also promotes the exploration of domestic oil and natural gas. In addition, it stresses the importance of using coal “cleanly and efficiently.” This means to “limit and reduce pollutants and carbon emissions” in every step of the industry chain — from mining to burning — by using “advanced technologies and management measures,” according to government guidelines.

The law also encourages the energy sector to adopt more market-based measures in pricing, trading and financing and to support more technological innovations. Further, it requires media outlets to promote energy conservation, energy security and low-carbon development for “public welfare.”

Most of those provisions can already be found in existing policies, but this new law updates and adjusts them based on current trends. Chinese state-run publications hailed it as “a milestone” for China’s energy sector due to its high legal status; but for some, its importance is limited.

“It clearly lacks enforceable provisions — what we might call ‘teeth’— and is primarily made up of declaratory clauses,” Liu Shilei, a teaching fellow of Chinese law at the Xi’an Jiaotong-Liverpool University in Suzhou, China, told Cipher.

Because China’s political system is not legislative-driven, with major decisions and policies generally initiated by the central government, Liu noted it is not unusual for legislation like the new energy law to codify existing policies that have already been tested or widely implemented.

She added the new law can override existing ones when there is inconsistency, though “I haven’t noticed any inconsistency yet.”

A long time coming

The road leading to the law’s introduction has been long and winding. China’s energy regulator first proposed drafting an umbrella energy policy in 2005 and formed a working group that deemed such a law “very urgent and necessary.”

While China’s energy regulator released a first draft in 2007, it didn’t publish a second draft until 2020. In April 2024, Beijing’s lawmakers again began reviewing the bill, which was passed at its third reading in November.

“The law went through more than three drafts — an unusually high number in Chinese legislation — with significant changes in each iteration,” Liu said.

The delay in the legislative process was in part the result of institutional restructuring of the country’s energy regulatory bodies and reforming the cabinet of the central government, said Liu.

Researchers Cipher spoke to also pointed to the dramatic shifts in China’s energy strategies over the years as a cause of the holdup. When the law was first drafted, coal accounted for around 75% of China’s power generation capacity. Just a few years later, Beijing started rapidly ramping up wind and solar development. Then in the last few years, the country has stressed the importance of coal again, calling it a “ballast stone” to bolster energy security due to shifting geopolitics and extreme weather events.

“For the people in charge of drafting and preparing the law, I imagine the bigger challenge has to be the changing priorities from the central government,” Myllyvirta said.

But Myllyvirta also noted the delay indicated a “clash” between vested interests in coal and renewables. “It was very clear from the process and the contradictions in the law that different interest groups have been successful in getting their language and their priorities into the law,” he said.

Focus on energy security

Jing Chunmei, a director of energy and green development at the Beijing-based think tank China Center for International Economic Exchanges, called the law’s emphasis on energy security a “big highlight.” Beijing will pursue its net-zero goals, Jing told China’s state broadcaster CCTV, but energy security is the “precondition and bottom line” — meaning not at the expense of risking stable energy supplies.

For China, energy security means coal, which the country has in abundance.

Between the mid-2010s and 2021, China limited approving new coal power plants. But after power shortages at home and Europe’s energy crisis due to Russia’s war in Ukraine, the country suddenly “permitted five times the coal power capacity compared to 2021,” according to Yu Aiqun, a research analyst at Global Energy Monitor, a California-based non-governmental organization.

The law confirms China’s plan for coal moving forward from a legal perspective: According to it, the state should “prioritize” the development of renewable energy, but it should also “promote the clean and highly efficient use” of coal and plan the construction of coal-fired power plants “reasonably.”

The emphasis on energy security is not directly related to Donald Trump’s second term as the U.S. president, but parts of the law do future-proof Beijing against geopolitical uncertainty. One clause, for example, stipulates Beijing can “take corresponding measures” when other countries impose “discriminatory” bans or restrictions on China in renewable and other energy sectors. Foreign organizations or individuals will be penalized for actions that “endanger” China’s energy security.

These clauses have a purpose, Yu explained: providing “a legal base for the Chinese government to fight back in the future trade wars with the U.S. and other countries.”