On June 5, 2026, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Housing and Urban-Rural Development, and the Ministry of Transport jointly signed Decree No. 42, formally unveiling the "Measures for the Implementation of the Minimum Proportion Targets for Renewable Energy Consumption and the Weighted System of Responsibility for Renewable Energy Electricity Absorption" (hereinafter referred to as the "Measures").

The Measures, approved at the 26th session of the National Development and Reform Commission on December 26, 2025, and endorsed by the other three ministries, will take effect on August 1, 2026. This is a key supporting system to implement the requirements of the Energy Law of the People's Republic of China and the Renewable Energy Law of the People's Republic of China. It also represents a top-level institutional design in the energy sector during the early stages of the "15th Five-Year Plan" period to achieve the goals of carbon peak and carbon neutrality. For the energy industry, the Measures signify that China's renewable energy management has transitioned from a focus on "absorption" to a new phase driven by a "dual-wheel" approach: "mandatory obligations on the consumption side" and "territorial responsibilities on the absorption side." For key energy-consuming enterprises, green energy consumption will gradually shift from "voluntary advocacy" to "quantifiable and assessable mandatory constraints."

Core Architecture: One Set of Measures, Two Systems, Two Levels

The Measures regulate two systems, corresponding to two levels of responsible entities. The logical relationship is clear: absorption is the foundation, while consumption is the goal. Absorption is primarily achieved by provincial-level administrative regions through coordinated project development and grid construction, ensuring the physical delivery of electricity. Consumption, ultimately realized by the user side, is the destination of absorption. In terms of responsibility division, the State Council's energy authority, in conjunction with the Ministry of Industry and Information Technology, the Ministry of Housing and Urban-Rural Development, and the Ministry of Transport, sets the targets and organizes implementation. Provincial-level energy authorities, under the leadership of provincial party committees and governments, coordinate with relevant departments to implement the measures.

First-Time Inclusion of "Non-Electric Consumption" in Assessment

This is one of the most groundbreaking innovations of the Measures. Previous policies primarily focused on green electricity consumption. The Measures now include the non-electric use of renewable energy into the minimum proportion target assessment system for the first time. The minimum proportion target for electricity consumption covers all types of renewable energy power generation. It can be met through self-consumption of renewable energy electricity, direct green electricity connection, or green electricity trading (allocation). The completion status is assessed using green electricity certificates corresponding to the electricity generated during the assessment year as the basic credential, calculated according to the national regulations on non-fossil energy electricity consumption. The minimum proportion target for non-electric consumption covers non-electric uses such as renewable energy heating (and cooling), renewable energy-based hydrogen, ammonia, and methanol production, and biofuels. The associated calculation methods are detailed in Appendix 1 of the Measures. The core formula for an enterprise's non-electric renewable energy consumption proportion is: (Enterprise's self-produced and consumed renewable energy non-electric energy + Enterprise's purchased and consumed renewable energy non-electric energy) divided by the enterprise's total non-electric energy consumption. For fuel combustion, heat is calculated based on the net calorific value. For solar thermal and geothermal energy, heat metering methods are preferred. The official reasons for including non-electric consumption include: a clear requirement of the Energy Law, helping to alleviate grid absorption pressure and expand utilization pathways, and supporting non-electric utilization industries to overcome development bottlenecks. As of the first quarter of 2026, China's annual production capacity for green hydrogen, green ammonia, green methanol, and sustainable aviation fuel was approximately 250,000 tons, 700,000 tons, 380,000 tons, and 1.7 million tons, respectively, establishing a preliminary foundation for large-scale development. However, the green value still lacks effective transmission, urgently requiring policy guidance to create stable demand. Notably, the assessment of non-electric consumption will be implemented steadily and step-by-step: mature sectors (e.g., renewable hydrogen, ammonia, methanol) can be included in monitoring and assessment earlier; sectors with incomplete statistical systems (e.g., renewable energy heating and cooling) will be considered later; initial assessments can be conducted by category of non-electric consumption.

Key Energy-Using Industries: Three Main Lines Defining the Assessment Scope

The Measures adhere to the principle of "combining comprehensiveness with focus," explicitly conducting monitoring, evaluation, and assessment of minimum consumption proportion targets for key energy-using industries. The industry scope is defined annually, with a transition period set. Currently, China has set green electricity consumption ratio requirements for industries such as electrolytic aluminum, steel, cement, polysilicon, and new data centers in national hub nodes. Future key energy-using industries will primarily focus on key consumption sectors like industry, construction, and transportation, following three main lines: First, targeting key industries with high energy and electricity consumption and high carbon intensity, aligning with policies like the "Carbon Peak and Carbon Neutrality Comprehensive Evaluation and Assessment Measures" and the "Opinions on Promoting Green and Low-Carbon Transformation and Strengthening the Construction of a National Carbon Market." Second, covering emerging fields like computing facilities, 5G base stations, and charging infrastructure, where electricity demand is experiencing explosive growth. It is estimated that during the "15th Five-Year Plan" period, the national electricity demand for computing will increase by over 100 billion kWh annually. Including these in the assessment helps drive clean energy to cover the incremental electricity consumption of society. Third, promoting "green to create green" by setting clear green energy consumption requirements for new energy equipment manufacturing industries like polysilicon and lithium-ion battery manufacturing, gradually establishing a green industrial chain and supply chain with collaborative carbon reduction upstream and downstream. Furthermore, the Measures encourage enterprises to increase their consumption proportion beyond the minimum targets and encourage regions with suitable conditions to set minimum renewable energy consumption targets for government departments, public institutions, and state-owned enterprises.

Three Key Optimizations in the Absorption Responsibility Weight System

Compared to the current system during the "14th Five-Year Plan" period, the Measures introduce three key optimizations to the absorption responsibility weight system. First, a regional and tiered approach is implemented. The Measures establish a "regional weight growth mechanism," setting different weight increments for different provinces: appropriately increasing the annual increment for regions with currently low weight levels and higher growth potential; reducing the increment for regions with high levels and limited space; and maintaining the increment for other regions at the national average level. This differentiated approach promotes the optimal allocation of green electricity nationwide. Second, medium- and long-term guidance is strengthened. Given the long construction cycles of inter-provincial power transmission channels and pumped storage, the Measures strengthen the guidance of medium- and long-term absorption responsibility weights. According to the National Energy Administration, when issuing this year's weight targets for provinces, the 2030 weight targets will be released simultaneously with the 2026 targets, allowing provinces to plan project development, grid construction, and regulation capacity construction in a coordinated manner. Third, mandatory requirements are reinforced. The Measures propose a rigid annual growth requirement for indicator setting. In terms of calculation methods, they require completion through actual absorbed electricity. If completion is genuinely impossible, enterprises can supplement by purchasing green certificates corresponding to the assessment year's electricity production. The evaluation method strengthens assessment, with unfulfilled weight targets needing to be carried over to the next year (weight targets in the final year of a five-year plan period cannot be carried over). Regarding the responsibility chain, the Measures clarify that provincial energy authorities take the lead responsibility for absorption implementation, coordinating with economic operation departments and the local National Energy Administration field offices to develop implementation plans for approval by the provincial people's government. Grid companies are responsible for increasing grid investment and construction, ensuring entities within their jurisdiction meet absorption targets. Power supply enterprises, electricity sales companies, relevant electricity users, and enterprises using self-owned power plants bear absorption responsibility. Various power trading institutions are responsible for organizing transactions, reporting data, and disclosing information to absorption entities. Additionally, the Measures include a mechanism for exemption and reduction: if power generation significantly decreases or transmission is restricted due to natural causes (including extreme renewable resource anomalies) or major accidents, the State Council's energy authority, after a third-party evaluation, will correspondingly reduce the assessment burden for the relevant province.

Calculation of Absorption Volume

The Measures systematically define the principles for calculating absorption volume. In practice, key points to note include: Self-consumed electricity (including green electricity direct connection projects where the power source and load belong to the same investor) is fully counted towards the energy user's absorption volume. For green electricity direct connection projects where the power source and load do not belong to the same investor, the volume is counted towards the project's energy user. For inter-provincial power input, five scenarios are handled separately: dedicated "point-to-grid," mixed "point-to-grid" (calculated based on the proportion of renewable energy in the outgoing electricity), inter-provincial "grid-to-grid," cross-provincial "grid-to-grid" (allocated based on the share of total social electricity consumption), and cross-provincial "green electricity direct connection." For the Beijing-Tianjin-Hebei region (Beijing, Tianjin, Jibei, Hebei Southern Grid), a separate rule applies: centralized project generation, distributed project generation participating in market transactions, and net power input from outside the region are all counted based on the settlement electricity volume of actual transaction contracts. Distributed project generation not participating in market transactions within the region is counted separately. For adjustments when using green certificates for supplementation, if a province completes its target using green certificates, the corresponding volume is deducted from the calculation for the province that sold the certificates. Power trading institutions should promptly provide information on the number of sellable green certificates to the selling province. For weight calculation, the Measures specify: installed capacity operational before the end of the previous year is calculated based on the average annual utilization hours. New non-hydro capacity added during the year is assumed to be evenly commissioned, with corresponding generation calculated at half the average annual utilization hours. New hydro capacity (mainly large hydropower plants) with a clear commissioning date is calculated based on the expected commissioning time and annual utilization hours.

Assessment, Rewards, and Penalties: Three-Month Remediation Period, Admonition and Notification, and Credit Records

The monitoring and evaluation mechanism involves the State Council's energy authority, in conjunction with relevant departments, commissioning a third-party institution to conduct quarterly monitoring and publish results. An annual evaluation of completion status is also organized and published. Provincial energy authorities submit an annual report on the previous year's completion to the State Council's energy authority, with a copy to the National Energy Administration field offices. For non-compliance, a positive incentive exists: enterprises and provinces with outstanding performance will be publicly commended by the State Council's energy authority and relevant departments, receiving priority access to relevant policy support. The Measures particularly emphasize market fairness: provinces must not restrict new energy from participating in inter-provincial power market transactions or inter-provincial green certificate trading. The application of results involves incorporating the completion of the system into relevant evaluation and assessment indicators according to national regulations.

Implications for Enterprises

Based on the Measures' provisions and policy direction, relevant enterprises should focus on the following key points. First, assess as early as possible whether they fall within the "key energy-using industries" scope. The scope is defined annually and dynamically adjusted. Industries like steel, cement, electrolytic aluminum, polysilicon, and data centers are already included. Computing facilities and lithium battery manufacturing are highly likely to be added soon. Second, establish management capabilities for green certificate and green electricity account books. Since the electricity consumption proportion is confirmed using green certificates from the assessment year's production, systematic management of certificate year-matching, source compliance, and cancellation is necessary to avoid being forced to purchase certificates passively near the assessment deadline. Third, proactively plan for non-electric consumption pathways. Green hydrogen, green ammonia, green methanol, non-electric biomass use, and renewable energy heating (cooling) are both future assessment directions and necessary means for deep decarbonization. Enterprises must simultaneously establish measurement and statistical accounting systems for non-electric energy use (prioritizing heat metering) to prepare data for future assessments. Fourth, coordinate investment arrangements for self-consumption and green electricity direct connection. The Measures define the rules for attributing absorption volume from green electricity direct connection projects based on the ownership of the investment entity. This rule will directly impact project boundary design and revenue attribution, requiring thorough consideration in the early stages of a project. Fifth, integrate green electricity consumption into supply chain management. Under the "green to create green" guidance, green energy consumption requirements are being transmitted upstream and downstream along the industrial chain. Export-oriented enterprises also need to consider alignment with international rules like the CBAM and battery regulations.

The issuance of Decree No. 42 marks a shift in China's renewable energy management from "emphasizing construction and grid connection" to "emphasizing absorption and consumption," and for the first time includes non-electric use of renewable energy in the national assessment system. For provincial-level regions, the regional and tiered weight targets, medium- and long-term targets, and rigid calculation mean that the development of renewable energy projects, grid projects, and regulation capacity must be planned and coordinated in advance. For key energy-using enterprises, green energy consumption is no longer just a bonus item in ESG reports but a compliance obligation directly linked to credit records and policy support. With the August 1, 2026, implementation date approaching, it is recommended that relevant enterprises begin baseline surveys and calculations, improve measurement and statistical foundations, and formulate green energy procurement and self-build strategies, turning institutional constraints into green competitiveness.