In April 2026, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued the Measures for the Comprehensive Evaluation and Assessment of Carbon Peaking and Carbon Neutrality and the Opinions on Advancing Energy Conservation and Carbon Reduction at a Higher Level and with Higher Quality. These two landmark policy documents signal that during the 15th Five-Year Plan (2026–2030) period, China will not only advance its “dual carbon” goals through macro-level strategic planning and sectoral guidance, but will also strengthen implementation through micro-level evaluation and accountability mechanisms.

Against this backdrop, this article examines the structural and region-specific challenges that may emerge during implementation under the dual framework of “assessment + action.” It further explores policy considerations for differentiated regional implementation, vertical policy coordination, and the integration of government policy tools with market-based mechanisms.

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I. Achievements in China’s Carbon Peaking and Carbon Neutrality Agenda during the 14th Five-Year Plan Period

Since announcing its carbon peaking and carbon neutrality goals in September 2020, China has treated climate action as a national strategic priority throughout the increasingly complex global environment of the 14th Five-Year Plan period (2021–2025). By integrating industrial restructuring, pollution control, ecological conservation, and climate governance, China has pursued coordinated progress in carbon reduction, pollution mitigation, ecological enhancement, and economic growth, driving systemic socio-economic transformation.

According to the white paper China’s Actions for Carbon Peaking and Carbon Neutrality and the Report on Addressing Climate Change and Advancing Carbon Peaking and Carbon Neutrality, by the third quarter of 2025 China had established the world’s largest and fastest-growing renewable energy system, built the world’s most comprehensive new energy industrial chain, achieved the world’s largest deployment of new energy vehicles, and contributed roughly one-quarter of global newly added greening areas. China has also become one of the countries with the fastest declines in energy intensity worldwide. Meanwhile, the “1+N” policy framework for carbon peaking and carbon neutrality has been largely established.

Renewable Energy Development

The share of fossil fuels in China’s energy consumption declined from 84.0% in 2020 to 80.2% in 2024, while coal’s share fell from 56.7% to 53.2%. Installed new-type energy storage capacity reached 73.76 GW / 168 GWh—approximately twenty times the 2020 level—and accounted for more than 40% of global installed storage capacity.

According to the Renewable Energy Grid Integration Operations in Q1 2026 report, China’s cumulative renewable energy installed capacity exceeded 2.4 billion kilowatts, representing over 60% of total installed power capacity. Combined wind and solar installations approached 1.9 billion kilowatts. Renewable electricity generation accounted for nearly 40% of total power generation, while wind and solar generation represented nearly one-quarter of national electricity consumption, increasingly supporting China’s power supply system.

Low-Carbon Urban and Rural Development

China has launched 90 “sponge city” pilot projects and 39 climate-adaptive city demonstration programs to strengthen urban climate resilience and ecological systems. Urban green coverage rates reached 43.49%, while per capita urban park and green space expanded to 15.91 square meters.

In 2024, newly constructed green buildings in urban areas totaled 1.69 billion square meters, accounting for 97.9% of all newly constructed urban buildings. Prefabricated buildings represented more than 30% of new construction starts.

Green Transportation

From January to September 2025, new energy passenger vehicles achieved a domestic market penetration rate of 52.2%, ranking first among major economies. China’s EV charging infrastructure network expanded to 17.348 million charging units—ten times the level recorded five years earlier.

China also maintained world-leading railway electrification levels, with the railway electrification rate reaching 76.2% in 2024. In aviation, fuel efficiency of China’s civil aviation transport fleet improved by 20.5% relative to the 2005 baseline.

Industrial Decarbonization

China has continued to strictly curb the blind expansion of high-energy-consuming and high-emission projects while phasing out outdated industrial capacity in accordance with laws and regulations. Efforts have focused on promoting green upgrading in key industries, advancing eco-industrial parks, and accelerating synergies between digitalization and green transformation to improve environmental and resource efficiency.

By 2024, China had established the world’s largest and most complete clean energy industrial chain. High-tech manufacturing accounted for 16.3% of value added in above-scale industry. Simultaneously, China coordinated the development of renewable energy bases with national data hub infrastructure, with 246 data centers designated as national green data centers.

Expansion of China’s National Carbon Market

China’s national carbon market achieved its first major sectoral expansion, incorporating the steel, cement, and aluminum smelting industries in addition to the original power sector. The market now covers approximately 8 billion tonnes of CO₂ emissions, representing more than 60% of China’s total carbon emissions.

The 2025 compliance rate reached 99.99%, the highest since the market’s launch. Annual allowance trading volume reached 235 million tonnes in 2025, up approximately 24% year-on-year, while total trading value reached RMB 14.63 billion.

At the same time, China accelerated the development of standards and measurement systems for carbon peaking and carbon neutrality, while steadily advancing product carbon footprint management systems.

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II. Continued Improvement of the “Rigid Assessment + Coordinated Action” Institutional Framework

During the 14th Five-Year Plan period, China largely completed the foundational transition from awareness-building to implementation capacity-building across its socio-economic system—from reducing “high-energy-consumption, high-emission, and excess-capacity” industries to fostering green industries and encouraging enterprises to adopt sustainability management and disclosure practices.

The 15th Five-Year Plan period represents both the decisive stage for achieving carbon peaking and a critical phase for economic restructuring toward green development. It requires stronger governance capacity across sectors and regions to coordinate emissions reduction efforts, track progress based on local conditions, and address structural bottlenecks across industries and technologies.

Against this backdrop, the two policy documents issued in April 2026 establish more concrete and binding implementation mechanisms for China’s dual carbon institutional framework.

1. Binding Assessment: Key Elements of the Assessment Measures

The Measures for the Comprehensive Evaluation and Assessment of Carbon Peaking and Carbon Neutrality establish a national evaluation framework designed to ensure achievement of key targets, including:

• Reducing carbon intensity by more than 65% from 2005 levels by 2030;
• Raising the share of non-fossil energy consumption to 25% by 2030;
• Achieving peak coal consumption and peak oil consumption.

The measures also emphasize controlling the scale and generation volume of coal-fired power while ensuring that newly added clean electricity generation gradually offsets incremental electricity demand growth.

Assessment Indicators

The framework combines direct control indicators with supporting indicators aligned with China’s “1+N” policy system.

Five control indicators focus on direct carbon emissions metrics, including:

• Total carbon emissions;
• Carbon intensity reduction;
• Total coal consumption;
• Total oil consumption;
• Share of non-fossil energy consumption.

Nine supporting indicators focus on broader socio-economic green transition metrics, including:

• Reduction in energy consumption per unit of GDP;
• Share of newly added clean electricity in incremental power demand;
• Energy and carbon intensity reductions in industrial production;
• Green and low-carbon urban-rural construction;
• Green transportation transformation;
• Carbon reduction performance of public institutions;
• Carbon market coverage and emissions control;
• Forest stock growth.

Responsibility for implementation is shared across multiple ministries, including the National Development and Reform Commission (NDRC), Ministry of Ecology and Environment, National Energy Administration, Ministry of Industry and Information Technology, Ministry of Housing and Urban-Rural Development, Ministry of Transport, and others.

Assessment Procedures

Provincial governments are required to conduct self-assessments and submit reports. Relevant ministries evaluate performance for each indicator, categorizing results as either “compliant” or “non-compliant.” Non-compliance triggers written recommendations identifying problems and proposing corrective actions.

The NDRC will conduct on-site inspections and third-party verification. Final assessment results will be categorized as:

• Excellent;
• Qualified;
• Unqualified.

Assessment outcomes will become an important reference for evaluating and appointing provincial leadership teams and government officials.

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2. Coordinated Action: Higher-Level Energy Conservation and Carbon Reduction Policies

The Opinions on Advancing Energy Conservation and Carbon Reduction at a Higher Level and with Higher Quality serve as an updated action framework building on policies introduced during the 14th Five-Year Plan period.

The document outlines five major tasks:

1. Coordinating energy conservation, carbon reduction, and green transformation;
2. Advancing carbon reduction in key sectors;
3. Strengthening supervision and governance;
4. Enhancing supporting systems and safeguards;
5. Improving organizational implementation.

Notably, the document identifies energy efficiency upgrades for computing infrastructure—including AI computing power facilities, communication base stations, and server rooms—as a new priority area for the first time. This places digital infrastructure alongside industry, buildings, and transportation as a core decarbonization sector.

The policy also strengthens requirements for full-process supervision of energy use and emissions while emphasizing accountability systems, tracking mechanisms, and implementation oversight.

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III. Regional Just Transition Challenges under the Assessment Framework

1. Coordinating Computing Power and Electricity under Rapid AI Expansion

The rapid evolution of AI hardware and large-scale deployment of foundation models are creating unprecedented pressure on global electricity systems and carbon neutrality pathways.

According to the International Energy Agency’s Energy and AI (2025) report, global electricity demand from data centers increased by 17% in 2025, while AI-focused data centers experienced electricity demand growth of approximately 50%. By 2030, data center electricity demand is projected to more than double and account for one-tenth of global electricity demand growth.

As a global leader in AI innovation, China has already entered a phase of broad AI deployment across industries and consumer applications. By July 2025, China’s total intelligent computing capacity reached 780,000 PFLOPS, ranking second globally.

Industry estimates suggest that electricity consumption from AI data centers could rise from 55.1 TWh in 2024 to 146.2 TWh by 2027, representing a compound annual growth rate of approximately 44.8%.

While China’s renewable energy transition during the 14th Five-Year Plan period has laid an important foundation for sustainable AI development, current clean electricity generation remains insufficient to fully meet rapidly growing computing demand.

As “coordinated development of computing and electricity” becomes a national strategic priority, major governance challenges are emerging, including:

• Allocation of emissions responsibilities across regions and industries;
• Carbon accounting for electricity-intensive digital infrastructure;
• Distribution of economic benefits and resource consumption;
• Long-term impacts on regional industrial development.

2. Carbon Fairness across Industrial Value Chains

China’s current carbon accounting framework primarily follows a producer-responsibility principle. However, this approach does not fully address embodied carbon transfers within China’s unified domestic market.

Research on interprovincial trade indicates that substantial emissions are embedded within value chains. More than one-fifth of domestic embodied carbon transfers originate from northwestern regions, while consumption in eastern coastal provinces drives significant emissions elsewhere.

Under increasingly strict regional assessment mechanisms, policymakers must therefore address mismatches between carbon reduction responsibilities and regional development capacities. Future policy design may need to incorporate:

• Carbon accounting across industrial supply chains;
• Extended producer responsibility mechanisms;
• Fiscal and financial transfer support for regions disproportionately affected by industrial restructuring;
• Green supply chain management standards aligned with state-owned enterprises.

3. Uneven Carbon Management Capacity across Regions

The assessment framework not only measures emissions performance but also tests regional capabilities in carbon accounting, data governance, and emissions management.

Reliable data systems are essential for ensuring fairness, transparency, traceability, and comparability in the assessment process. However, less-developed regions often face weaker digital infrastructure and carbon accounting capabilities while simultaneously relying more heavily on traditional high-carbon industries.

Some leading cities already demonstrate stronger alignment between economic capacity and carbon governance capabilities. Shenzhen, one of China’s first carbon trading pilots, launched its 2025 carbon verification cycle in April 2026 and has significantly improved data quality and verification systems over recent years.

Similarly, Quzhou in Zhejiang Province formally implemented China’s first dedicated carbon account regulation in May 2026 after five years of pilot exploration.

Moving forward, policymakers will need to carefully balance assessment requirements with regional development realities, avoiding excessive disparities caused by short-term technological or infrastructure gaps. Enhanced interregional cooperation, technical assistance, and capacity-building mechanisms will therefore be essential to achieving equitable and effective implementation of China’s dual carbon transition.

Author:

Deng Jielin, Research Fellow at the International Institute of Green Finance (IIGF), Central University of Finance and Economics; Research Fellow at the Green Value Investment Research Center, Shangcheng District, Hangzhou.