Chinese government leaders published a policy document on 22 April – Earth Day – calling for stricter controls on fossil-fuel consumption and greater oversight of heavy emitters.
It has been interpreted by experts as a signal of China’s ongoing commitment to climate action and a bridging policy between the 15th five-year plan, published in March, and future thematic and sectoral five-year plans expected to be published in the months and years ahead.
While the policy document – known as “guiding opinions” – is not strictly binding, it bears the stamp of the two highest bodies in China’s political system, conveying a strong sense of authority.
One expert tells Carbon Brief that this is the first high-level document to explicitly link decarbonisation efforts with energy security and industrial development.
It was also followed on 23 April by a second document, which is binding, that strengthens environmental inspections of provincial governments and creates new metrics for future evaluations, such as total emissions and coal consumption.
Below, Carbon Brief examines how the policies could impact China’s approach to peaking its carbon dioxide (CO2) emissions.
- Why are ‘guiding opinions’ important?
- What does the new ‘opinions’ document say about fossil fuels?
- How have climate evaluation rules been strengthened?
- What does the ‘opinions’ document say about energy security?
Why are ‘guiding opinions’ important?
Documents play an important role in disseminating political messages through China’s vast government bureaucracy. There is a well-defined hierarchy for different types of policies, each of which infer a different level of importance and flexibility.
“Opinions” are officially defined by the Chinese government as the “presentation of views and proposed solutions regarding important issues”.
They outline broad principles and general policy directions for lower levels of government to incorporate into more concrete policies.
Policy recommendations included in an opinion are implied to be non-binding, allowing officials more discretion in how they are implemented on the ground.
Prof Yuan Jiahai from the North China Electric Power University in Beijing previously told Carbon Brief that naming a document “guiding opinions” means it will have a “long-term, directional and systematic impact”.
An example is a set of opinions on a “green and low-carbon circular development economic system” issued in February 2021, which laid out broad policy recommendations across several economic sectors to spur “green planning, green design, green investment, green construction, green production, green circulation, green life and green consumption”.
“Following these opinions, China’s green growth accelerated significantly,” Prof Christoph Nedopil, professor at the University of Queensland, tells Carbon Brief. He adds:
“This is not to say that some of the developments would not have happened without such a guidance, but the guidance provided the clear direction and authority to various government departments and businesses to strengthen the support for the green and low-carbon transition.”
The new “opinions” document, on energy saving and carbon reduction, carries additional weight because of the bodies that issued it. Specifically, it was issued jointly by the general offices of the central committee of the Communist party of China (CCCPC), the highest party organ and headed by President Xi Jinping, and the state council, the highest government body and headed by Premier Li Qiang. This indicates that it has the approval of all of China’s most senior policymakers.
The document “signals China’s increasing confidence in its clean-energy sector”, says Yang Biqing, energy analyst for Asia at thinktank Ember.
The timing also makes the document important, says Hu Min, director and co-founder for the Beijing-based thinktank Institute for Global Decarbonization Progress.
She notes that the document, published soon after the close of the “two sessions” in March, is a “way to move things forward” in energy and climate policy. Hu adds that it sends a signal of the direction likely to be taken in upcoming thematic and sectoral five-year plans on topics such as peaking carbon emissions, renewable energy and coal.
“I’m quite excited about it,” she tells Carbon Brief.
What does the new ‘opinions’ document say about fossil fuels?
The opinions document includes a plethora of recommendations across several sectors, from promoting energy-saving measures in data centres and clean heating solutions to developing “integrated steel-to-chemicals” projects and “zero-carbon transport corridors”.
But some of the most interesting language was reserved for the use of coal.
China’s carbon reduction “situation…remains relatively severe”, says a government statement summarised by carbon-market information platform Tanpaifang, with the energy system still “reliant” on coal.
The “opinions” document is, therefore, of “great significance for building broader and stronger consensus across society”, it adds.
In 2025, developers in China submitted new or reactivated proposals to build a total of 161 gigawatts of new coal-fired power plants, as shown in the figure below.
The new document acknowledges the need to “strictly control fossil-fuel consumption”, in language significantly stronger than the 15th five-year plan published after the two-sessions meeting in March.
The five-year plan only pledged to “promote the peaking” of coal and oil use.
The document also outlines several other measures for managing fossil-fuel CO2 emissions, including “deepening efforts to reduce coal and oil use”, “actively promoting the clean replacement” of coal-fired equipment and “advancing” the replacement of “dispersed coal” use in an “orderly” manner.
However, it stops short of a complete rejection of coal-fired power, saying, for example, that policymakers should “reasonably control the scale of coal-fired power generation capacity and output”.
Nevertheless, Hu tells Carbon Brief, the document represents efforts by China’s leaders to “articulate” what controlling fossil fuels might look like.
Yang agrees, saying that the shift in the language on coal was “encouraging”.
She notes the granularity of the recommendations around coal, such as a line urging policymakers to “determine the dispatch sequence and load regulation for coal-fired power”.
“It is very interesting that, at this high level [of government], they have so clearly outlined this obstacle in coal’s [changing] role…from baseload to flexibility,” she says.
Experts interviewed by Carbon Brief said the language on renewable energy, which signalled ongoing support for China’s clean-energy buildout, was positive but unsurprising.
The document urges officials to “vigorously develop non-fossil energy sources and new-energy storage technologies”, highlighting the need for technologies such as pumped-storage hydropower and microgrids to boost consumption.
For Hu, market conditions, investment and local policies are now more important than central government signals for China’s clean-energy buildout.
The main debate is fossil fuels, she says, and any signals that encourage limiting coal use will “make a difference”.
How have climate evaluation rules been strengthened?
The guiding opinions document also dedicates significant space to outlining measures for reviewing and evaluating carbon-reduction efforts.
It states that local officials should undertake “comprehensive” evaluations of the energy consumption, coal consumption and carbon emissions of new projects, with plans to reduce or offset emissions becoming a “key component” of evaluating the project.
Similarly, the plan pledges to strengthen the review by the central government of local governments’ annual reports on energy use and carbon emissions, with warnings issued to local governments for “lagging progress” or “unreasonable increases in indicators”.
The central government will also strengthen supervision through “regular special inspections”, the “opinions” document says.
For regions that are “severely” falling behind on targets or are found to have “insufficient” ability to run their own inspections, the opinions threaten to “adjust or suspend their authority” for conducting evaluations and “delay or restrict” approvals for new projects.
The document also makes “local party committees and governments” responsible for their jurisdictions’ carbon reduction work. Party members and state-owned enterprises must “lead by example”, it adds.
The day after the opinions were released, the CCCPC and state council also issued a series of measures for “comprehensive evaluation” of local efforts to peak and reduce carbon emissions.
Unlike the guiding opinions, this document is considered binding policy – in this case overseen primarily by the National Development and Reform Commission (NDRC), China’s powerful economic planning agency.
Under the new rules, central government officials – led by the NDRC with significant input from the Ministry of Ecology and Environment (MEE), National Energy Administration (NEA) and other departments – will grade local governments on their carbon-reduction efforts.
The measures largely align provinces’ emissions reduction evaluations with China’s existing climate pledges for 2030.
Key targets include reducing carbon intensity by more than 65% by 2030, compared to 2005 levels, “reasonably” controlling coal-fired power generation, achieving a “25% share of non-fossil energy consumption by 2030” and “gradually” covering all new power demand with clean energy.
The government also sets out 14 indicators, shown in the table below. At the top of the list are five key “control indicators”: total carbon emissions; reductions in carbon intensity; total coal consumption; total oil consumption; and the share of non-fossil energy consumption.
The NDRC is responsible for evaluating all five of the key indicators, with the MEE also overseeing the first three.
Provinces that fail to meet any of the control indicators will receive an “unsatisfactory” rating, leading to “corrective measures”, according to solar news outlet Zhihui Photovoltaic.
In a comment article in finance news outlet Caixin, Chen Lihao says that the two documents together “form the institutional foundation” for China’s “full-scale transition” to a dual control of carbon system.
Chen is the deputy director of the special committee on resources and environment at the Jiusan Society, the political party that environment minister Huang Runqiu belongs to.
The measures build on China’s existing inspection system to create a “much stronger accountability and compliance system”, says Qin Qi, China analyst at the Centre for Research on Energy and Clean Air.
The “real step forward”, she adds, is how climate and carbon targets – including China’s international commitments – have now been explicitly placed inside a “party-backed assessment framework” that uses pass-or-fail judgements on each indicator, rather than letting weak performance disappear inside a broad score.
Li Shuo, China climate hub director at the Asia Society Policy Institute echoes this, telling Carbon Brief that the new policy represents a “helpful step toward implementation, bringing greater clarity on tasks and responsibilities”.
Inspections are regarded as a powerful tool for the MEE in enforcing climate policy, allowing it to publicly identify non-compliant bodies, with state media often announcing results.
In 2021, inspection teams even publicly criticised the NEA, scolding it for “falling behind” on developing low-carbon energy in a move described at the time as “unprecedented”.
The emphasis that the opinions document places on evaluations and the stronger requirements that it represents “shows…the whole system that this is very important…it’s not just talk”, says Hu. (Hu spoke with Carbon Brief before the evaluation framework was released.)
However, both Li and Qin note that much depends on how the evaluations are enforced.
The strength of the system will “inevitably involve further political bargaining within the Chinese system”, says Li, shaped both by differences in the priorities of different ministries and geopolitical developments – particularly the outcomes of the conflict in the Middle East.
Qin highlights the greater capacity that the measures give the MEE to enforce inspections.
“The ministry has a more formal standing to push back on coal expansion and to speak on climate policy in a more direct way,” she says, but adds that the NDRC will still be the “central driver” of evaluating emissions.
She also notes that, while earlier central government inspections incorporated explicit instructions about making evaluation results public, the new measures place more emphasis on “internal” mechanisms, rather than public disclosure.
What does the ‘opinions’ document say about energy security?
The opinions document also settles a debate on energy security that has been playing out in the Chinese media since the start of the conflict in the Middle East.
It opens with a statement that “energy conservation and carbon reduction are key” both for China’s “dual-carbon” goals and energy transition and for “safeguarding national energy security”.
“The first sentence connects directly decarbonisation with energy security and industrial development, which is, if I’m not mistaken, the first time…that this has been linked and recognised [in such a high-level policy],” Yang tells Carbon Brief.
Although not always explicitly referencing the conflict, several outlets have run stories highlighting the importance of various energy technologies to China’s energy security.
Some outlets, including state broadcaster CCTV and the Communist Youth League’s official newspaper, China Youth Daily, focused on the positive role low-carbon energy plays in China’s energy system. Others have underscored the importance of fossil fuels, including state news agency Xinhua, which has run a series on becoming an “energy powerhouse” interviewing representatives of the fossil fuel industry.
On 20 April, NDRC head Zheng Shanjie wrote in the Communist party-affiliated People’s Daily that China should further strengthen energy security, including by increasing oil and gas reserves and production, reinforcing the role of coal-fired power as a “base-load guarantee” and expanding Sino-Russian oil and gas cooperation. He flagged “disruptions” in the Strait of Hormuz as a cause for concern.
Zheng’s article came out on the same day that Chinese premier Li Qiang held a “study session” meeting with other high-level officials discussing the need to implement a “new strategy for energy security”, deepening energy system reforms to support the country’s low-carbon transition.
The guiding opinions specifically instruct the NDRC, the country’s powerful economic planning agency, to “conscientiously fulfill its duties” in achieving China’s carbon goals, including across planning, implementation and evaluation.
It adds that “all relevant [government] departments shall perform their respective duties, cooperate closely and form a concerted effort”.
However, experts had differing opinions on whether this signalled heightened scrutiny of the NDRC, or if it emphasised its importance to emission reduction efforts.
“The mention…seems to highlight an elevated scrutiny of its work on energy transition”, says Nedopil, but “does not seem to signal an increase of its responsibilities in the energy transition, considering the mention of [the responsibilities of other departments]”.
The post Q&A: China’s leadership calls for ‘strict control’ of fossil fuels appeared first on Carbon Brief.
Q&A: China’s leadership calls for ‘strict control’ of fossil fuels
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In 2021, amidst a wave of corporate net-zero targets, a campaign group called Investors for Paris Compliance was set up in British Columbia, aiming to use investor pressure to hold Canadian companies to account on their climate promises.
In the five years since, the group has notched up several wins: pressuring National Bank into providing $20 billion of finance to renewable energy, getting Royal Bank of Canada to improve its green finance labels and persuading 20-25% of investors to regularly back climate proposals at annual general meetings (AGMs) for shareholders.
But last month, the group’s then executive director Matt Price put out a statement saying it was shutting down. Despite some progress, Price explained, his organisation had concluded that “investor accountability has reached its limits”.
Companies and their investors often understand that climate change threatens the economic system, Price said. But, he added, they do not respond adequately because they are worried that, if they do, their competitors will not put in as much effort and could therefore gain a financial advantage.
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This “tragedy of the commons” situation cannot be fixed by shareholder advocacy, Price said, but instead needs litigation, regulatory action and accountability mechanisms. “Some of our team will take those things on in new initiatives,” he said.
Price’s words echo the findings of a London School of Economics (LSE) report published last month, based on workshops with asset owners and managers in New York, Amsterdam, London and Singapore.
Government policy key
The LSE report noted that “action by investors on climate change is severely constrained by their duties, the limited tools at their disposal and the pathways of technology development”. To be effective, pressure from climate-conscious investors must be coupled with government policy that incentivises green investment and technological innovation, the authors concluded.
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Lindsey Stewart, director of institutional insights for investment research firm Morningstar, told Climate Home News that investor activism does work but it “doesn’t do everything that people expected it to do towards the beginning of the 2020s”.
“There is a limit to what can be achieved by minority shareholders exercising their votes and engaging with companies. Quite a lot, it does seem, is reliant on the legal and regulatory framework,” he said, adding that the closure of Investors for Paris Compliance shows this “realisation is sinking in a lot more than perhaps it was in 2020, 2021, 2022”.
Decline of investor activism
Stewart said that in the early 2020s, investor activists were pushing companies for “things that were sort of already on the regulatory conveyor belt anyway”, like companies setting targets for their operational (Scope 1 and 2) emissions, disclosing their carbon footprints, and assessing their exposure to risk from climate change.
With this low-hanging fruit picked, green-minded investors have moved on to make demands that are more controversial and have received less support from other investors, he said. He gave examples of just transition reporting, green capital expenditure financing ratios for banks and disclosing emissions from the use of products a company sells, known as Scope 3 emissions.
On top of this, Stewart said, there has been pressure from the “right-wing political establishment in the US” against investors taking climate change into consideration. BlackRock, which manages $9.5 trillion of assets, has walked back its climate commitments after pressure from US Republicans.
More fundamentally, Stewart described the idea that fossil fuel majors would dismantle their oil and gas business and transform into renewables companies as a “pipe dream on the part of environmentalists”. “Why would they have the skill or capability, or even the stakeholder backing, to completely transform a business of that size?” he asked.
Shareholder activism is only possible at privately owned and listed companies, while most investment in oil and gas is now coming from state-owned companies, like Saudi Arabia’s Aramco. In 2025, less than a quarter of investment was from oil majors like BP and Shell.
Business backlash shows power
Yet despite the uphill climb, Mark van Baal defends shareholder activism. He runs an Amsterdam-based campaign group called Follow This, which has tried to get investors to vote for pro-climate resolutions at the AGMs of oil and gas multinationals.
He accepts that success peaked around 2021, but says the effort oil and gas firms are now putting into winning over shareholders and discouraging pro-climate resolutions – which he characterised as “the Empire Strikes Back” – shows the power of shareholder activism, which was previously underestimated.
In January 2024, ExxonMobil sued Follow This, aiming to block the group’s climate resolution. Fearing the case would end up in the Supreme Court, where conservative judges could set an anti-climate precedent, Follow This withdrew the resolution.
But, said van Baal, although the legal battle created a “chilling effect among investors”, it is a “proof point that shareholder pressure works and that they’re really afraid of the shareholders”.
Vote, don’t sell
Stewart and van Baal both agreed that selling, or threatening to sell off shares is not an effective way to change a company’s behaviour.
It allows less climate-conscious investors to buy the shares, they said, adding that there is no evidence that threats to sell shares and therefore lower the valuation over climate concerns have influenced company management.
Van Baal said the share price is set by short-term traders, not long-term shareholders like the pension funds he works with.
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Nonetheless, investors’ engagement should be forceful, van Baal insisted – and not just within their comfort zone of talking to management about sustainability behind closed doors without voting for it at AGMs. “Shareholder democracy is the only democracy where voting is called escalation,” he said.
The Follow This website says that only investors can stop fossil fuel companies destroying the planet. “Marches didn’t change their minds. Lawsuits didn’t stop them. But shareholders can,” it trumpets.
But van Baal told Climate Home News this wording is “too strong” and may have to be revised, adding that shareholder activism just “fits me more than gluing myself to roads” and is a tactic he “stumbled on” 11 years ago.
Legal, political and investor activism can reinforce each other, he added. When Friends of the Earth sued Shell alleging inadequate climate action, for example, the green group’s lawyers cited the company’s rejection of a Follow This resolution as evidence. “The pressure needs to come from all sides,” van Baal said.
The post Investor climate group closes down, blaming “limits” of shareholder activism appeared first on Climate Home News.
Investor climate group closes down, blaming “limits” of shareholder activism
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