On November 8, 2024, the Standing Committee of the National People’s Congress of China approved the Energy Law of the People‘s Republic of China (hereinafter referred to as the Energy Law), marking it for implementation on January 1, 2025. The Energy Law is the first comprehensive legislation in China’s energy sector, serving as a foundational legal framework. Prior to this, China relied on individual laws such as the Electricity Law, Energy Conservation Law, and Renewable Energy Law, which were enacted during earlier stages of the country’s energy development. The Energy Law aims to address modern challenges and provide overarching guidance for energy development in the new era. The Energy Law is expected to solidify long-term growth in China’s energy sector, promote the development of new energy industry, energy science and technology, high-standard new energy system.

Structure and Scope

The drafting of the Energy Law spanned nearly two decades and undergoing numerous revisions. The finalized version consists of nine chapters and 80 articles, covering critical aspects such as covering energy planning, energy development and utilization, energy market system, energy reserve and emergency response, energy scientific and technological innovation, supervision and management, legal liability and other aspects. It elaborates the definition and scope of energy, including coal, oil, natural gas, nuclear energy, hydro energy, wind energy, solar energy, biomass energy, geothermal energy, ocean energy, electricity, heat, hydrogen energy, etc.

Highlights for Foreign Stakeholders

  1. The Energy Law advocatesfor the establishment of a diversified, unified, and open energy market system characterized by orderly competition and effective oversight. It emphasizes the importance of regulating market order in accordance with the law and ensuring the equal protection of the legitimate rights and interests of all energy market participants.
  2. The fourth chapter focuses on the energy market system, encouraging and guiding various entities to legally invest in energy development, utilization, and infrastructure construction to foster the growth of the energy market.
  3. The Energy Law stipulatesthe state’s support for the prioritized development and utilization of renewable energy, the rational development and clean, efficient use of fossil energy, and the promotion of a safe, reliable, and orderly transition from fossil to non-fossil energy sources. Efforts aim to increase the share of non-fossil energy in overall consumption.
  4. The Energy Law proposesmeasures to strengthen domestic oil and gas supply security, with a focus on the large-scale development of unconventional oil and gas resources.
  5. The Energy Law highlightsthe promotion of a diversified energy supply structure that prioritizes conservation and efficiency.
  6. The Energy Law stressesthe importance of advancing energy science and technology innovation by increasing investment, formulating supportive policies, and enhancing the national innovation platform. This includes developing major energy science and technology infrastructure, public service platforms for research, testing, certification, and improving overall service capacity to drive innovation.

For foreign stakeholders and multinational corporations, this likely signals China’s intensified focus on developing unconventional oil and gas resources, alongside efforts to drive technological advancements and boost production. Certain provisions suggest a potential direct impact on the oil industry, as they outline the China’s overarching strategy to promote clean, low-carbon development by optimizing both industrial and consumption structures.