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Table 4.9 New subsidies programmes experimented during the period under review
Programme Objective Pilot/target regions/zones Surface area concerned Tools/ mechanisms Budgetary allotments
The Plan for the Exploration and Implementation of Trials of Crop Rotation and Fallow Systems - To promote the rehabilitation of land and agricultural sustainable development (...) - Groundwater funnel areas, areas contaminated with heavy metals - Southwest rocky desertification areas (Guizhou Province and Yunnan Province) - Northwest areas of severe ecological degradation (Gansu Province) 2016: 6.16 million mua 2017: 12.00 million mu Subsidies in the form of compensation mechanisms ensuring that farmers undertaking crop rotation or fallow do not incur loss of revenues - Prescribed time periods and prescribed regions will be decided on the Government's instructions but there shall be local differentiations and coercion will be avoided
(...)
Subsidy fund for farmland water conservancy facilities and water and soil conservation (Circular of the Ministry of Finance and the Ministry of Water Resources on Printing and Distributing the Administrative Measures for the Use of the Subsidy Fund for Farmland Water Conservancy Facilities and Water and Soil Conservation (Cai Nong [2015] No. 226)) - To support the construction of farmland water conservancy projects In 2017, the Subsidy Fund for Farmland Water Conservancy Facilities and Water and Soil Conservation was incorporated into the Water Conservancy Development Fund. Administrative measures for the Fund are set forth in the Circular of the Ministry of Finance and the Ministry of Water Resources on Printing and Distributing the Administrative Measures for the Use of the Water Conservancy Development Fund (Cai Nong [2016] No. 181). 2016: RMB 39.997 billion

Table 4.14 Mining industry investment regime, 2015 and 2017
2015 2017
Encouraged
(…)
Development and application of new technologies for enhancing utilization rate of mine tailings and the comprehensive application of ecological restoration technology in mining areas Development and application of new technologies for enhancing utilization rate of mine tailings and the comprehensive application of ecological restoration technology in mining areas

Coal, an abundant and relatively cheap resource in China, represents a declining but still large part of this primary energy mix. Its share was 62% in 2016 (down from 63.7% in 2015) thereby achieving the target set in 2013 by the Air Pollution Prevention and Control Action Plan to decrease it to less than 65% by 2017. The same plan sets a target of 13% for non-fossil energy's share in China's energy mix for 2017.

Similarly, the Law on the Prevention and Control of Atmospheric Pollution, amended in 2015, contains specific measures on the prevention and control of atmospheric pollution caused by burning coal and other energy. It stipulates inter alia that central and local authorities shall adopt measures to improve energy structure; optimize the utilization of coal so as to make it cleaner and more effective; and gradually reduce the proportion of coal in primary energy consumption. One of the concrete measures stemming from the law was the prioritization of power plants using clean energy for electricity dispatch. [38]

[38] Other measures include: enhanced supervision and monitoring of the environmental performances of eight provinces and municipalities in Beijing-Tianjin-Hebei, the Yangtze River Delta and Pearl River Delta, and 28 key cities along the Beijing-Tianjin-Hebei atmospheric pollution transmission channel; the elaboration of a scheme to prevent waste heat supply by residents; and a programme to encourage the development and utilization of geothermal energy in particular in the northern part of China.

The Government has also taken voluntary measures to reduce coal production capacities and has adopted, through the five-year plan for energy 2016-2020 issued in January 2017, a series of measures aimed at diminishing the share of coal in China's energy mix. These measures include: encouragement at city-cluster level for a shift from coal to natural gas consumption; a toughening of air quality standards; and the suspension of the development of over 100 coal-fired plants already planned. From 2014 to 2016, China closed outdated coal-fired power generators with high levels of power consumption and pollution amounting to a reduction of 15 million kWh. A Working Plan was issued to promote the transformation of coal-fired generators for low emission and energy-saving purposes. By the end of 2017, China had completed the transformation of generators amounting to 700 million kWh, accounting for 71% of the total installed capacity of coal-fired generators.

The wider objectives set by the plan are that by 2020, the proportion of non-fossil energies in total primary energy consumption should be around 15%, the proportion of natural gas consumption should reach 10%, and the carbon dioxide emission per unit of GDP should decrease by 40%-45% as compared to 2005. [39]

[39] By 2030, the proportion of non-fossil energy consumption should be about 20%; the proportion of natural gas consumption should be around 15%; the carbon dioxide emission per unit of GDP should decrease by 60%-65% over 2005; carbon emission should reach its peak by around 2030, and best efforts will be made to realize the target earlier.

China is actively pursuing a policy of decoupling of economic growth and energy consumption through increased energy efficiency. For the 13th Five-Year Plan period (2016-2020), the national objective for the reduction of energy consumption per unit of GDP is 15%, and intermediary objectives are set on an annual basis. In 2015, energy consumption per unit of GDP dropped by 5.6%, surpassing the objective of 3.1%, and in 2016 it dropped by 5% (objective of 3.4%). In the first three quarters of 2017, energy consumption per unit of GDP dropped by 3.8%.

In December 2017, the NDRC issued the Carbon Emission Trading Market Construction Scheme (Power Generation Industry). This emission trading scheme defines the guiding principles for the construction of a unified carbon market in China in order to effectively control and gradually reduce carbon/greenhouse gas emissions in China, and to promote green and low-carbon development. The guiding principles foresee that the Scheme shall be market-oriented, government-led, and based on a step-by-step approach, unified standards, extensive participation, equality and transparency. It mandates the launch of a national carbon emission trading system for the power generation industry, and the construction of a carbon market in three steps. [40]

[40] The Scheme also set requirements for carbon emission monitoring, reporting and checking system, key emission units quota management system, market trading-related systems, carbon emission data reporting system, carbon emission right registration system, carbon emission trading system and carbon emission trading settlement system.

On 29 December 2016, the NDRC and the National Energy Administration issued a strategy document with a wider time horizon and even vaster objectives: the Energy Production and Consumption Revolution Strategy (2016-2030). The document plans the advent of an "energy revolution" in China and put forward the strategic goal of building a green, low-carbon and highly efficient modern energy system. [41]

[41] It links the goal of the construction of an "ecological civilization" with that of the "energy revolution". It contains 13 strategic energy actions to that effect, namely the Nation of Energy Savers Initiative, the Total Energy Consumption and Strength Control Initiative, the Near-zero Carbon Emissions Zone Demonstration Initiative, the electricity Demand Side Management Initiative, the Coal Clean Utilization Initiative, the Natural Gas Promotion and Utilization Initiative, the Non-fossil Energy Leaping Development Initiative, the Rural Area Renewable Energy Initiative, the Energy Internet Promotion Initiative, the Energy Key and Core Technology and Equipment Breakthrough Initiative, the Energy Supply Side Structural Reform Initiative, the Energy Standard Improvement and Upgrade Initiative and the "Belt and Road" Energy Cooperation Initiative.

Table 4.17 Investment in power generation capacity by type of source, 2015 and 2016
Indicator Unit (million RMB) 2015 2016
Investment in power generation capacity
Hydropower 100 789 612
Thermal power 100 1,163 1,174
Nuclear power 100 565 506
Wind power 100 1,200 896
Solar power generation 100 218 ..