Climate Change Regulation 2025 Comparisons

The multilateral legal regime on climate change mainly consists of the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, and the Paris Agreement. China is a party to all of them. China has actively and constructively participated in international negotiations on climate change. Its role has evolved from being an active participant, an active contributor, to becoming an active leader. China has promoted and initiated the establishment of multilateral dialogue mechanisms such as the BASIC Ministerial Conference and the Ministerial Conference on Climate Action. Additionally, China has actively coordinated the negotiation positions of the BASIC countries, the Like-Minded Developing Countries, and the Group of 77. China has also participated in dialogues and negotiations on climate issues within the framework of the G20, the International Civil Aviation Organization (ICAO), the International Maritime Organization (IMO), the BRICS Conference, and other forums.

China’s positions on the primary climate change issues are as follows.

• Climate change mitigation:as outlined in China’s Policies and Actions for Addressing Climate Change released by the State Council in 2008, China upholds the principle of Common but Differentiated Responsibilities, holding that since developed and developing countries bear distinct historical responsibilities for contributing to climate change and possesses varying development needs and capacities. Therefore, imposing restrictions based on a uniform scale is deemed inappropriate and unfair. It is necessary to take full account of the national conditions and capacities of each country and adhere to the institutional arrangement whereby each country makes its own contribution to the fullest extent of its capabilities and nationally determines its own individually, rather than adopting a “one-size-fits-all” approach.
• Climate change adaptation: China holds that, developing countries’ ability to adapt to climate change is generally weaker. Consequently, they are more vulnerable than developed countries to the adverse impacts of climate change. Therefore, enhancing the capacity to adapt to climate change should be considered a crucial element in addressing climate change.
• Climate finance: during the United Nations Climate Action Summit, China emphasised that it considers climate finance to be a key issue in effectively addressing climate change. As the largest developing country, China also has the right to receive financial assistance. China is actively collaborating with the World Bank, the Asian Development Bank, and other multilateral institutions. It has been advancing the climate investment and financing initiatives through the Asian Infrastructure Investment Bank, the Silk Road Fund, and Chinese banks. This effort aims to assist the countries involved in the Belt and Road construction in achieving a mutually beneficial outcome for both climate change and development.
• Capacity buildingand technology transfer: in November 2024, special representative of Chinese President Xi Jinping, Ding Xuexiang, said at the World Leaders Climate Action Summit at the UN Climate Change Conference in Baku that the roles of “technology” and “finance” are very important in assisting developing countries to combat climate change, stressing that they constitute key support. Since 2016, China has provided and mobilised project funds of more than CNY177 billion. China calls on developed countries to increase financial support and technology transfer to developing countries.
• Loss and damage:at the twenty-seventh Conference of the Parties to the UNFCCC (COP27), the special representative of President Xi Jinping and China’s Special Envoy for Climate Change Affairs, Xie Zhenhua, presented China’s stance on financial arrangements for loss and damage. He pointed out that COP27 was the first conference to include financial arrangements for loss and damage on its agenda, addressing the concerns of developing countries, which marked significant progress. The Paris Agreement explicitly states that developed countries have the responsibility and obligation to contribute to the Climate Fund, the Adaptation Fund, and even the Loss and Damage Fund, while contributions from developing countries are voluntary. At COP28, the General Assembly achieved a significant outcome regarding the Loss and Damage Fund, and Zhao Yingmin, head of the Chinese delegation to COP28 and Vice Minister of the Ministry of Ecology and Environment, expressed his hope in an interview with Al Ittihad of the United Arab Emirates that the Loss and Damage Fund would be formally and effectively operational as soon as possible.
• Equity in climate change responses: in 2021, China, along with 28 other countries, launched the Initiative for Belt and Road Partnership on Green Development. This initiative calls on countries to take climate action to address climate change, adhering to the principles of equity and Common but Differentiated Responsibilities and respective capabilities, in light of different national circumstances. In November 2024, Ding Xuexiang, serving as the special representative of Chinese President Xi Jinping, emphasised at the World Leaders Climate Action Summit during the UN Climate Change Conference in Baku that the principle of Common but Differentiated Responsibilities is the cornerstone for strengthening global climate governance. Developed countries need to increase climate ambition and action, take the lead in fulfilling emission reduction obligations, and move up the timeline for carbon neutrality. Developing countries also need to do our best within our capabilities.

China is actively engaged in regional climate change legal regimes such as the South-South Cooperation Mechanism on Climate Change, the BRI International Green Development Coalition, and the Tripartite Environment Ministers Meeting involving China, Japan and Korea.

China has actively participated in regional climate change legal mechanisms and cooperation. For example, it has actively promoted the initiation and development of South-South cooperation on climate change. In April 2019, China launched the “Belt and Road” eco-environmental protection big data service platform and implemented the “Belt and Road” South-South cooperation programme to address climate change. It also formally established the BRI International Green Development Coalition, providing a platform for policy dialogues and communications, environmental knowledge and information sharing, and green technology exchanges for the “Belt and Road” green development cooperation.

Since June 2007, when the State Council issued China’s National Climate Change Programme, China has introduced a series of policies and regulations related to addressing climate change, including the “1+N” policy system, which follows the goal of “carbon peaking and carbon neutrality (see 3.1 Policy/Regulatory Instruments and Spheres of Government/Sectors). To a certain extent, these policies have been enacted to meet the Nationally Determined Contribution (NDC) targets under the Paris Agreement, and are therefore informed by the multilateral regimes for addressing climate change. Also, to some extent, they are informed by the evolving science of climate change.

China prioritises scientific research on climate change and attaches great importance to the latest research progress. In 2006, it established the National Climate Change Expert Committee as an important decision-making support body and a national-level think tank for the country’s efforts to address climate change. The committee’s main responsibility is to provide advice and recommendations on scientific issues related to climate change, as well as on China’s long-term strategies and major policies to address climate change. Since then, China has issued four National Assessment Reports on Climate Change, in 2006, 2011, 2014 and 2022. These reports cover scientific understanding of climate change, assessment of climate change impacts, risks, and adaptation. They serve as an important basis for the formulation of the targets, policies, and actions to address climate change.

China’s NDC Under the Paris Agreement

In June 2015, the Chinese government submitted Enhanced Actions on Climate Change: China’ s Intended Nationally Determined Contributions to the UNFCCC.

In 2020, China updated the NDC and officially submitted it to the UNFCCC in October 2021. The updated targets are as follows: to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060; to reduce carbon dioxide emissions per unit of GDP by over 65% by 2030 from the 2005 level; to increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030; to increase forest stock volume by 6 billion cubic metres by 2030 from the 2005 level; and to increase total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030.

Compared to the previous targets, the 2021 updated NDC added the targets of achieving carbon neutrality by 2060 and reaching a total installed capacity of wind and solar power of more than 1.2 billion kilowatts by 2030. It also strengthened the 2030 carbon dioxide emissions control target per unit of GDP, raised the target for the share of non-fossil energy in primary energy consumption, and increased the target for forest stock by 2030.

As introduced in the official websites of the Ministry of Ecology and Environment and the Ministry of Foreign Affairs, China is currently developing a new round of NDCs, and will notify the UNFCCC secretariat of these for the period up to 2035 in due course.

The realisation of China’s NDC targets has no preconditions and does not depend on support from other parties. In 2020, President Xi Jinping emphasised during the 75th general debate of the United Nations General Assembly that tackling climate change is not merely a request from others but an imperative for China’s sustainable development. He highlighted that it is China’s responsibility to foster a global community of shared future for humankind.

Regarding the biennial transparency report, the official website of China’s Ministry of Ecology and Environment introduced that, in order to fulfil the requirements of the relevant decisions of the UNFCCC and the Paris Agreement, China submitted the First Biennial Transparency Report on Climate Change of the People’s Republic of China and the Fourth Biennial Update Report on Climate Change of the People’s Republic of China to the secretariat of the UNFCCC on 31 December 2024. The two reports comprehensively elaborate on the progress of implementing China’s NDCs for 2030 – ie, progress in the implementation of the NDCs has been in line with expectations, with the increases in forest stock and the total installed capacity of wind and solar power being achieved ahead of schedule.

China’s Approach to Evolving Aspects of Climate Change Science

China’s approach to the evolving aspects of climate change science is primarily reflected in the following.

• In January 2024, Deputy Director General of the China Meteorological Administration (CMA) Xiong Shaoyuan discussed the outcomes of the Sixtieth Session of the IPCC. He highlighted that China actively participates in all IPCC activities and has actively recommended distinguished Chinese scientists as lead authors and contributors for the preparation of assessment reports.
• During the seventh assessment cycle of the IPCC, Deputy Director of the CMA Xiong Shaowei led the Chinese delegation at the Sixtieth Session of the IPCC in January 2024. He delivered several speeches, actively advocating for the enhancement of the scientific quality and objectivity of the assessment reports for this cycle, ensuring that the scientific assessment products were produced with high quality and in alignment with the progress of the cycle. In February 2025, China hosted the Sixty-Second Session of the IPCC, where the outline of the Seventh Assessment Report was adopted. This session clarified the key directions for the scientific assessment of climate change and established a crucial foundation for uniting the global scientific community in its collective efforts to improve climate governance.
• Ongoing clarification of the legal regime of the Paris Agreement:
• Transparency framework: China is gradually progressing with efforts to address climate change in accordance with the requirements of the Enhanced Transparency Framework (ETF) of the Paris Agreement. In 2022, China’s Ministry of Ecology and Environment (MEE) and other departments issued the Implementation Plan on Accelerating the Establishment of a Unified and Standardized Carbon Emission Statistics and Accounting System. This plan systematically deploys the focus of domestic Measurement, Reporting, and Verification (MRV) in the next phase. China has also started preparing a Biennial Update Report (BUR) with reference to the ETF. In December 2023, it released the Third PRC Biennial Update Report on Climate Change. The report took into account the most recent requirements of the modalities, procedures, and guidelines (MPGs) for ETF of the Paris Agreement.
• Loss and damage: See 1.1 Multilateral Climate Change Legal Regime.
• Articles 6.2, 6.4 and 6.8 of the Paris Agreement. Regarding Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6.2, according to the white paper titled “Responding to Climate Change: China’s Policies and Actions”, China views this mechanism as a means to enhance flexibility in international climate cooperation. China advocates for the design of the mechanism to fully respect the national circumstances of each country. Furthermore, it asserts that parties should not be required to adjust their NDCs due to the transfer of emission reduction targets from sources outside the scope of their NDCs in order to avoid imposing additional burdens on developing countries. Regarding the emission reduction targets under the carbon market mechanism in Article 6.4, China advocates that double counting should be avoided, and that parties should be allowed to use pre-2020 certified emission reductions to fulfil their NDC targets and participate in market transactions. With regard to non-market cooperation under Article 6.8, China advocates strengthening the role of non-market mechanisms and calls on developed countries to fulfil their commitments on financial and technical support to help developing countries enhance their climate adaptation capacity.
• Climate finance and technology transfer: China advocates that developed countries should provide sufficient financial resources to developing countries to help them better address climate change. This responsibility is not only a moral one that the developed countries cannot evade, but an international obligation that they must fulfil under the UNFCCC and the Paris Agreement, and an important manifestation of the principles of common but differentiated responsibilities, equity, and respective capabilities. China calls on developed countries to take the initiative in assuming their historical responsibilities by increasing support for developing countries, particularly those in Africa. In addition, with regard to technical support, China asserts that the willingness of developed countries to transfer technology, along with their public investment and support, is insufficient. This inadequacy has led to the ineffective implementation of numerous technology action programmes in developing countries. Therefore, China advocates that developed countries must earnestly fulfil their obligations to transfer technology to these countries.

China has not formally promulgated specific laws on climate change yet. In 2016, the annual legislative plan of the State Council included legislation to address climate change as a research project. In 2020, China proposed in its updated NDC the study and formulation of a specific law on carbon neutrality. In the legislative plan of the Standing Committee of the 14th National People’s Congress issued in 2023, legislation addressing climate change, carbon peaking and carbon neutrality was included in the list of legislative projects that “require further research”. China has not yet established an environmental constitution. In April 2025, the National People’s Congress (NPC) reviewed the Ecological and Environmental Code (Draft), which introduced a “Green and Low-Carbon Development Chapter”. This includes a dedicated section on “Responding to Climate Change”, outlining the principle that responses to climate change should adhere to international and domestic coordination while emphasising mitigation and adaptation. This provision will serve as a foundation for future specialised legislation addressing climate change.

Although China has not enacted climate change-specific legislation yet, when the Air Pollution Prevention and Control Law was revised in 2015, new provisions were added to provide for coordinated control of air pollutants and greenhouse gases (GHGs). In addition, since the State Council released China’s National Climate Change Programme in June 2007, China has issued a series of policies and regulations aimed at addressing climate change. These policies and regulations all fall within the framework of the Constitution and actively encourage and support efforts to address climate change. The 2018 amendment to the Constitution included “ecological civilization”. In December 2023, the Opinions on Comprehensively Promoting the Development of a Beautiful China issued by the Central Committee of the Communist Party of China (CPC) and the State Council emphasised the need to effectively address the negative effects and risks of climate change, which is considered the safety bottom line for the development of a “Beautiful China”. Therefore, within China’s constitutional framework, encouragement and support prevail instead of obstacles to the policies and regulations aimed at addressing climate change.

China and other parties to the Paris Agreement have implemented climate change policy actions by issuing joint statements and cooperating on projects to address climate change. For example, in November 2023, China and the United States collaboratively issued the Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis. Another example is that, as of September 2023, China has implemented 75 climate change mitigation and adaptation projects with 40 developing countries, as reported in the 2023 Annual Report on China’s Policies and Actions for Addressing Climate Change. The aforementioned cooperation is independent of Article 6.2 of the Paris Agreement. For the time being, our firm has not yet found that China has fully established a relevant framework for action in accordance with Article 6 (including Articles 6.2, 6.4 and 6.8) of the Paris Agreement.

Regarding Article 6.2, our firm has not yet found that China has concluded formal bilateral agreements with other parties on cooperation to achieve emission reductions under NDCs in accordance with Article 6.2 of the Paris Agreement.

Regarding Article 6.4, our firm has not yet found that China has set up a designated national institution to handle the Paris Agreement carbon credit mechanism. China’s existing carbon market consists of the National Carbon Emission Trading Market and the National Trading Market for Voluntary GHG Emission Reductions (see 5.1 Carbon Markets).

Regarding Article 6.8, the 2024 Annual Report of “China’s Policies and Actions for Addressing Climate Change”, issued by the Ministry of Ecology and Environment in November 2024, states that China is actively engaging in non-market cooperative actions as outlined in Article 6.8 of the Paris Agreement. The report highlights China’s commitment to promoting global climate governance through a variety of approaches, including technology transfer, financial support, and capacity building.

In China, the CPC Central Committee, the State Council, and the MEE, which is the competent authority for addressing climate change, can formulate climate change-related policies.

In June 2007, the State Council established the National Leading Group on Climate Change, Energy Conservation, and Emission Reduction as a cross-sectoral comprehensive body for deliberation and coordination in China’s response to climate change, energy conservation, and emission reduction. This group is headed by the Premier of the State Council. Thirty central governmental departments are members of this group, including the MEE, the National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development, the Ministry of Transport, the Ministry of Water Resources, and the Ministry of Agriculture and Rural Affairs.

Before 2018, China’s competent authority responsible for addressing climate change was the NDRC. In 2018, as part of a national institutional reform, the duty of addressing climate change was transferred to the newly-formed MEE. The MEE is tasked with organising and formulating major strategies, plans, and policies for addressing climate change and reducing greenhouse gas emissions. Additionally, it leads and coordinates participation in international negotiations on climate change with relevant departments and ensures compliance with the UNFCCC.

The Department of Climate Change in MEE is responsible for comprehensively analysing the impact of climate change on the economic and social development. It takes the lead in the national implementation of the UNFCCC, organises the implementation of the Clean Development Mechanism, and undertakes the specific work of the National Leading Group on Climate Change, Energy Conservation, and Emission Reduction.

In addition, China has established the National Centre for Climate Change Strategy and International Cooperation (NCSC) as an institution directly under the leadership of the MEE, with responsibilities that include organising and conducting research on policies, regulations, strategies and plans to address climate change. It also provides technical support for domestic compliance, statistical accounting and assessment, management of carbon emissions trading, international negotiations, external cooperation, and communication.

Based on the work that has been conducted, we believe that the administrative departments and institutions mentioned are fully capable of formulating China’s climate change policies and facilitating the execution of the national climate change strategy and associated tasks. They play a vital role in addressing climate change, and their efforts align with China’s national circumstances and have proven to be effective.

Current Development of Climate Change Litigation in China

Regarding climate change litigation in China, the Supreme People’s Court (SPC) issued the Specification on the Types of Environmental Resource Cases and Statistics (for Trial Implementation) in 2021. This document categorises “Climate Change Response Cases” as an independent case type, encompassing both climate change mitigation and adaptation. In 2023, the SPC released the Opinions of the Supreme People’s Court on Completely, Accurately, and Comprehensively Implementing the New Development Philosophy and Providing Judicial Services for Actively and Steadily Promoting Carbon Peak and published 11 typical cases, which established guidelines for adjudicating climate change-related lawsuits and carbon-related cases.

Types of Parties in Climate Change-Related Litigation and Causes and Purposes of Litigation

From the white paper Environment and Resources Adjudication in China (2023) and typical cases of climate change litigation published by the Supreme Court, the plaintiffs in these cases may be NGOs, procuratorial authorities, enterprises, or third-party agencies. The types of climate change-related litigation primarily include the following.

• Environmental civil public interest litigation: for example, in 2016, the Friends of Nature Environmental Research Institute (Friends of Nature) in Chaoyang District, Beijing, filed an environmental public interest litigation case against power companies in Gansu and Ningxia, respectively, over their “curtailment of wind and solar power”. For another, in March 2020, the Procuratorate of Deqing County, Zhejiang Province, initiated civil public interest litigation against an insulation material company in Deqing for its illegal purchase and use of the controlled ozone-depleting substance (ODS). Additionally, in June 2024, the Beijing Grassland Alliance Environmental Protection Promotion Centre filed an environmental public interest litigation against a power company in Xingyi, Guizhou Province, along with its operation and maintenance agency (as a third party) for failing to settle carbon emission allowances on schedule.
• Administrative public interest litigation: the Procuratorate of Dejiang County, Tongren City, Guizhou Province, initiated an administrative public interest litigation against the local housing and urban-rural development for failing to fulfil its statutory duty to supervise the completion of gas piping facilities in residential communities.
• Administrative litigation: in 2015, a company in Shenzhen was administratively penalised by the Shenzhen Development and Reform Commission for failing to pay its carbon emission allowances in full and on time. The company subsequently filed an administrative lawsuit challenging the administrative penalty.
• Civil private litigation: in 2017, a third-party service provider specialised in greenhouse gas voluntary emission reduction trading filed a civil lawsuit against the commissioning company regarding the payment of CCER service fees. Additionally, in 2019, a company filed a civil lawsuit against a trading centre in Guangzhou due to a contractual dispute with it over the trading of carbon emission allowances.

Policies and Regulatory Mechanisms for Climate Change Mitigation

China has elevated the carbon peaking and carbon neutrality targets to a major national strategy. The targets of the strategy are fully consistent with the mitigation target in China’s NDCs. China is fully committed to achieving its mitigation target primarily through the following policy and regulatory mechanisms:

National economic and social development plans

The Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and Vision 2035 (“14th Five-Year Plan”), adopted in 2021, has established a binding target of “reducing carbon dioxide emissions per unit of GDP by 18% by 2025 compared to the 2020 level”. Provincial governments have also integrated climate change into their 14th Five-Year Plans to break down and execute their specific emission control targets and tasks. The legal nature of these plans, which are not statutes or regulations, is controversial, but they are generally considered to be mandatory and binding, particularly for governments.

In order to achieve the targets outlined in the plans, China evaluates the performance of provincial governments in meeting greenhouse gas emission control targets. These assessments serve as a crucial criterion for the comprehensive evaluation of provincial government leaders, influencing their promotions, sanctions, appointments, and dismissals. Concurrently, provincial governments also assess lower-level governments in a similar manner.

The “1+N” policy system

China has established a “1+N” policy system for carbon peaking and carbon neutrality. “1” consists of the Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy by the CPC Central Committee and the State Council, and the Action Plan for Carbon Dioxide Peaking Before 2030 by the State Council. “N” consists of various implementation plans for key areas and industries, as well as related supportive plans. These include implementation plans for key areas such as energy, industry, transportation, urban and rural construction, agriculture and rural affairs, pollution reduction, and carbon reduction. Implementation plans are also outlined for key industries such as coal, oil and gas, iron and steel, non-ferrous metals, petrochemicals, chemicals, and building materials. Additionally, supportive plans are in place for scientific and technological support, financial support, and statistical accounting. All provincial governments have also formulated their own regional carbon peaking implementation plans to ensure the fulfilment of the policy targets. The aforementioned policies are not statutes or regulations, but they are typically mandatory and binding, especially for governments.

Normative documents

China’s normative documents specifically applicable to climate change mitigation mainly include those related to the National Carbon Emission Trading Market and the National Trading Market for Voluntary GHG Emission Reductions (see 5.1 Carbon Markets). In addition, the Regulation on the Administration of Ozone-Depleting Substances (administrative regulations), which was amended in 2023, also requires the control of non-CO2 GHGs, such as HFCs.

Government Departments Affected by Climate Change Mitigation Policies

Provincial (autonomous region and municipal) governments, ministries, and commissions of the State Council, as well as institutions directly under the State Council, are all influenced by the aforementioned national plans and policies. This influence has prompted them to prioritise addressing climate change as an important consideration in their work.

Specific Mechanisms for Mitigating Climate Change

Carbon taxes

China has not yet imposed a carbon tax.

Emissions trading

China has established a carbon trading mechanism where mandatory carbon emissions trading and voluntary emission reduction trading coexist (see 5.1 Carbon Markets).

Carbon emission information disclosure – at present, China has implemented requirements for disclosing/reporting carbon emissions information for key greenhouse gas emitters participating in the carbon emissions trading market. In addition, per the Measures for the Administration of the Law-based Disclosure of Environmental Information by Enterprises, key pollutant discharging entities, enterprises subject to compulsory cleaner production examination, and listed companies and bond issuers that meet specific criteria are also obligated to comply with the legal disclosure and reporting requirements for carbon emission information. Statistical accounting and reporting of carbon emission information are essential for achieving the dual-carbon target, and the falsification of such information is subject to strict law enforcement.

Environmental permits

Climate change mitigation is not yet a factor that needs to be universally considered for the issuance of environmental permits or authorisations. However, the MEE is striving to incorporate the assessment of climate change impacts into the environmental impact assessment for both planning and construction projects.

Regulatory Mechanisms for Climate Change Adaptation

China fully supports the achievement of climate change adaptation targets through various policy and regulatory mechanisms.

On the one hand, China’s 14th Five-Year Plan and some of the “1+N” policy documents contain policy and regulatory requirements for climate change adaptation. On the other, China has also issued planning and policy documents specifically applicable to climate change adaptation. These documents emphasise the need to enhance the capacity to adapt to climate change in cities, coastal zones, the Qinghai-Tibetan Plateau, other key ecological zones, and key sectors such as agriculture, forestry, grasslands, water resources, public health, and infrastructure. Additionally, they stress the importance of improving the capacity for climate change observation, monitoring, and early warning, as well as for risk assessment, disaster prevention, and mitigation. These documents are not statutes or regulations, but they are typically mandatory and binding, especially for governments. The following are examples.

• National Climate Change Adaptation Strategy, issued in 2013;
• National Plan on Climate Change (2014-2020), issued in 2014;
• Action Plan on Climate Change Adaptation for Cities and Action Plan on Climate Change Adaptation for Forestry (2016-2020), issued in 2016;
• National Comprehensive Disaster Prevention and Mitigation Plan (2016-2020), issued in 2017;
• National Climate Change Adaptation Strategy 2035, issued in 2022; and
• Notice on Deepening Pilot Projects for Building Climate-Resilient Cities, issued in 2024.

In addition, some provinces (autonomous regions, and municipalities) have issued provincial action plans for climate change adaptation, but the fulfilment of climate change adaptation targets has not yet been included in the assessment and evaluation of the heads of provincial governments.

Government Departments Affected by Climate-Change Adaptation

The main government departments affected by the aforementioned plans and policies include the departments of environment and ecology, development reform, science and technology, finance, natural resources, housing and urban-rural development, transportation, water resources, agriculture and rural affairs, culture and tourism, health, emergency management, energy, meteorology, forestry and grassland, and the central bank.

Environmental Permits and Authorisations

Adaptation to climate change is not yet a factor to be considered in the issuance of environmental permits or authorisations, including in the ongoing carbon emission EIA pilot programme.

China’s Stance Regarding Article 6.4 of the Paris Agreement.

At present, China has not taken a clear position on whether it will participate or intends to participate in the carbon market under Article 6.4 of the Paris Agreement. However, it has actively participated in the negotiation process related to the international carbon market mechanisms under Article 6 of the Paris Agreement and has promoted the establishment of relevant market mechanisms.

With regard to the ever-expanding rule book on Article 6 and the work of the supervisory body under Article 6.4, China is currently concentrating on the construction and enhancement of its National Carbon Emission Trading Market and National Trading Market for Voluntary GHG Emission Reductions. China has not established a designated national body to deal with Article 6.4 of the Paris Agreement. For the current regulatory authorities in China, see 2.4 Key Policy/Regulatory Authorities.

Carbon Markets and Regulatory Mechanisms in China

China’s carbon market consists of the National Carbon Emission Trading Market (the Mandatory Carbon Market) and the National Trading Market for Voluntary GHG Emission Reductions (the Voluntary Carbon Market). The current administrative/management mechanism of the carbon market is primarily outlined in the Interim Regulation on the Administration of Carbon Emission Trading (an administrative regulation), the Measures for the Administration of Carbon Emissions Trading (for Trial Implementation) (a departmental rule), the Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction Trading (For Trial Implementation) (a departmental rule), and normative documents issued by the MEE, such as the rules for the administration of carbon emissions registration, trading, and settlement. However, the carbon market administrative/management mechanisms mentioned above are not operated under any national body designated in Article 6.4 of the Paris Agreement. Instead, they are managed by the competent ecological and environmental authorities, market regulation authorities, and other relevant departments of the State Council within their respective jurisdictions.

China allows legally established legal persons and other organisations in the country to participate in the voluntary carbon market in accordance with the Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction Trading (For Trial Implementation). Projects that participate in the voluntary carbon market must meet the criteria of authenticity and uniqueness, and must fall also within the scopes supported by the project methodology issued by the MEE, and must commence construction after 8 November 2012. Entities participating in certified voluntary emission reductions trading must open an account in both the registration system and the trading system. They are required to validate and register voluntary GHG emission reduction projects in compliance with the law. Subsequently, they must verify and register the GHG emission reductions as China Certified Emission Reductions (CCERs) following the project registration. The CCER trading parties can utilise various trading methods such as listed agreements, block agreements, and one-way bidding, through the trading system in accordance with the rules.

China’s Voluntary Carbon Market was launched in 2012 and entered the trading phase in 2015. However, due to the limited participation in voluntary GHG emission reduction trading and the absence of standardisation in individual projects at the initial stage, the NDRC suspended the acceptance of filing applications for voluntary GHG emission reduction trading projects and emission reduction volumes in March 2017. Along with the introduction of the national carbon market and the incorporation of CCERs into the trading scope, there has been a sharp increase in demand for CCERs from GHG emission-control enterprises and voluntary emission reduction enterprises. In January 2024, the Voluntary Carbon Market was officially restarted.

Regulation of Carbon Markets and Information Disclosure

China strictly regulates both the National Carbon Emission Trading Market and the National Trading Market for Voluntary GHG Emission Reductions. For the National Carbon Emission Trading Market, ecological and environmental authorities oversee the identification of key GHG emission entities, the allocation of carbon emission allowances, the accounting, reporting, verification, and surrender of GHG emissions, as well as the registration, trading, and clearance of carbon emission rights.

For the National Trading Market for Voluntary GHG Emission Reductions, ecological and environmental authorities strictly supervise the development of voluntary GHG emission reduction projects through validation, registration, verification of emission reductions, registration of emission reductions, and trading of these projects. The market regulation departments conduct daily supervision and inspection of the validation and verification activities of third-party institutions in accordance with laws, regulations, and relevant provisions. They also investigate and penalise illegal acts.

For the disclosure of carbon market-related information, the MEE has established the National Carbon Information Network, where information about key emission entities, verification organisations and the completion and processing of carbon allowance surrender is disclosed. The network unifies and connects the National Carbon Trading Market Management Platform, the National Carbon Emissions Registration and Clearing System, and the National CCER Registration System.

In accordance with Article 2 and Appendix 1 of the Carbon Border Adjustment Mechanism (CBAM) Regulation, Chinese companies that directly or indirectly enter the EU market may be affected by CBAM. At present, CBAM applies to the relevant products in six industries: electricity, cement, fertilizer, iron and steel, aluminium, and hydrogen. Since the declarations mainly include embedded carbon emissions, the CBAM will also indirectly impact third-country exporters and enterprises. In addition, the application scope of CBAM may be expanded in the future, impacting both upstream and downstream supplies along the production chain, thereby influencing China’s manufacturing and logistics industries. Therefore, for Chinese companies, the impact of CBAM includes not only export companies in the six industries during the transition period but also companies in their upstream and downstream supply chains. As the coverage of CBAM continues to expand, other industries may also be affected to some extent.

In response to CBAM, at the routine press conference of the MEE held in July 2021, Liu Youbin, the spokesperson of the MEE, mentioned that the CBAM is essentially a unilateral measure that unprincipledly expands climate issues into the trade field. This not only violates WTO rules but also fails to comply with the principles and requirements of the UNFCCC and the Paris Agreement. During the WTO’s review meeting on EU trade policy held in June 2023, China emphasised that the EU’s specific measures, such as CBAM, export controls, or other actions, should not harm the interests of other members, particularly developing countries. China calls on the EU to avoid taking unilateral actions that blatantly violate WTO rules.

Implications of the TCFD for Climate Change Liability and Reporting Policies and Positions

In China, the Task Force on Climate-Related Financial Disclosures (TCFD) has influenced national policy and regulatory positions on climate change liability and reporting.

In December 2017, the 9th China-UK Economic and Financial Dialogue encouraged financial institutions in both countries to pilot environmental information disclosure work with reference to the TCFD’s recommendations. Subsequently, the two countries released the China-UK Climate and Environmental Information Disclosure Pilot Programme Working Group Action Plan. Ten financial institutions on both sides adopted the TCFD’s recommendations as the first group of pilots. In April 2024, under the unified deployment and guidance of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange, the Shenzhen Stock Exchange, and the Beijing Stock Exchange formally issued the guidelines for sustainability reports of listed companies (the “Guidelines”) (see 6.4 ESG Reporting and Climate Change), under which the sustainability disclosure framework is consistent with the TCFD recommended framework.

In terms of civil society, enterprises and financial institutions are increasingly valuing the TCFD recommendations as a reference basis for disclosing climate-related information. Statistics show that, by the end of 2022, a total of 61 organisations, including 26 financial institutions and 35 non-financial institutions, have claimed to support the TCFD disclosure recommendations in China.

For investment and industry operational decisions, the influence of the TCFD is becoming increasingly significant. Financial institutions and investors are more inclined to utilise TCFD-based information to evaluate climate risks and opportunities for companies, which is crucial when evaluating investment projects.

Application of IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2 Climate-Related Disclosures in China

In China, enterprises are not currently required to disclose climate-related information under IFRS S1 and IFRS S2. Details regarding China’s sustainability reporting mechanisms and the extent to which enterprises must disclose climate change-related information in their reports can be found in the response to 6.4 ESG Reporting and Climate Change.

In China, there is no law that explicitly specifies that company directors can be held liable for climate change impacts on their company or of their companies.

With regard to infrastructure investment and/or financing that may have a negative impact on climate change, China has introduced a series of national policies to encourage green finance since 2007, and has put forward policy requirements that strictly limit the granting of credits and investments to clients with serious violations of laws and regulations and significant risks in relation to ESG. For example, the policies require that banks and insurance institutions should take measures to effectively identify and control environmental and social risks (including environmental and social issues related to climate change, etc) in their lending activities and so on. In 2020, five departments, namely the MEE, the NDRC, People’s Bank of China, the China Banking and Insurance Regulatory Commission (CBIRC) and the CSRC jointly issued the Guiding Opinions on Promoting Investment and Financing in Response to Climate Change, which proposes to support local authorities in formulating negative investment lists to curb high-carbon investments and proposes to accelerate the formulation of information disclosure standards for climate investment and financing projects, institutions, and funds. The document also proposes to promote the establishment of a climate information disclosure system in which enterprises make public commitments, disclose information in accordance with the law, and is under broad social supervision.

China has not yet enacted a specific law on climate change. Existing Chinese laws do not specify whether shareholders or parent companies can be held liable for climate change damages or breaches of climate change law.

In China, for certain listed companies, stock exchange institutions require disclosure of sustainability reports or ESG reports from 2026 onwards.

In April 2024, the Shanghai Stock Exchange, the Shenzhen Stock Exchange, and the Beijing Stock Exchange formally published the Guidelines for Sustainability Reports of Listed Companies. The guidelines stipulate that companies included in the sample companies of the SSE 180 Index, the SSE Science and Technology Innovation Board 50 Index, the SZSE 100 Index, the Growth Enterprise Index and companies listed in both China and abroad should disclose their 2025 annual sustainability reports or ESG reports for the first time by 2026. Other listed companies are encouraged to voluntarily disclose their reports. In particular, information on addressing climate change is included in the scope of the environmental information disclosure.

Pursuant to the Guidelines for Sustainability Reports of Listed Companies, the climate change-related information to be disclosed in the sustainability reports or ESG reports of a specific listed company includes information on governance, strategy, impact, risk and opportunity management in response to climate change, as well as information on indicators and targets related to climate change response.

In response to the first two international sustainability disclosure standards issued by the ISSB on “General Requirements for Disclosure of Sustainability-Related Financial Information” and “Climate-Related Disclosure”, the Ministry of Finance and nine other departments have established a cross-departmental working group and issued the Corporate Sustainability Disclosure Guidelines – Basic Guidelines in December 2024, based on the ISSB International Standards in the Chinese context. In April 2025, the General Office of the Ministry of Finance and the General Office of the Ministry of Ecology and Environment jointly issued a letter soliciting comments on the Corporate Sustainability Disclosure Guidelines No. 1 – Climate (for Trial Implementation) (Draft for Public Comment). On the one hand, this Draft Guideline reflects Chinese characteristics, and on the other hand, it is also generally consistent with IFRS S2 regarding the disclosure of information on climate-related risks and opportunities, reflecting the “convergence” with international standards.

Regarding the Science Based Targets initiative (SBTi), based on publicly available information, as of February 2024, 502 Chinese (including Hong Kong, Macao and Taiwan) enterprises have joined the SBTi. These enterprises may disclose information on their GHG emissions and their progress towards the targets through sustainability reports (or ESG reports).

In China, there are currently no statutory requirements for conducting climate change due diligence in M&A, financing and asset transactions. However, in practice, some companies conduct ESG-specific due diligence for investment and M&A purposes.

Buyers of shares/assets usually conduct climate change or ESG due diligence through document verification, personnel interviews, or by relying on third-party reports.

China has provided policy and regulatory support for the adoption of renewable energy technologies. At policy level, China has issued a series of renewable energy development plans as top-level designs, such as the 14th Five-Year Plan for Renewable Energy Development. At statutory level, the specific law supporting renewable energy technologies is the Renewable Energy Law, which includes a special chapter providing industrial guidance and technical support.

China’s policies and regulations support and encourage the adoption of renewable energy technologies through mechanisms such as Feed-In Tariff (FIT), renewable energy green power certificate (Green Certificate) programmes, the fully guaranteed purchase mechanism/national guarantee mechanism for renewable energy consumption, and tax incentives.

Feed-In Tariff (FIT)

In January 2006, the NDRC published the Trial Measures for the Administration on Prices and Cost Allocation for Electricity Generated from Renewable Energy, which outlines the FIT policies applicable to various renewable energy power generation technologies, such as wind power, biomass power, solar power, ocean power, and geothermal power.

The Green Certificate Programme

The Green Certificate is an electronic certificate with a unique identification code issued for green power generated from renewable energy power generation projects. It is the only proof for recognising green power generation and consumption. In 2017, China began piloting the voluntary trading of green certificates. In August 2023, the NDRC and other departments issued the Notice on Effectively Completing the Full Coverage of Renewable Energy Green Electricity Certificates to Promote Renewable Electricity Consumption, expanding the coverage scope of green certificates. At present, China is promoting the increase in the proportion of green power consumption among central and local state-owned enterprises, government agencies, and institutions. It is also exploring and advancing the integration and alignment of green certificates with the National Carbon Emission Trading Market and the National Trading Market for Voluntary GHG Emission Reductions.

In 2019, the country established and enhanced the mechanism guaranteeing renewable energy power consumption to increase the proportion of renewable energy power generation in total power generation. This mechanism mandates that electricity sales (or consumption) by various market entities must meet the consumption amount, not falling below the minimum renewable energy power consumption responsibility in the provincial administrative region. In 2024, the NDRC issued the Regulations on the Supervision of Full Guaranteed Purchase of Renewable Energy Electricity to clarify the aforementioned mechanism at the statutory level.

Tax Incentives

The State Taxation Administration has introduced a series of tax incentives for the development and utilisation of renewable energy technologies. These incentives include the exemption of distributed photovoltaic power generation from the construction fund for major national water conservancy projects, exemption of renewable energy tariff surcharges, exemption of funds for the late-stage support of migrants in large and medium-sized reservoirs, exemption of funds for repayment of loans to the agricultural network, immediate refund of the value-added tax on wind power generation, exemption of some land used for hydroelectric power stations from urban land use tax, and enterprise income tax exemption for renewable energy projects.

At present, China’s policies and regulations mainly support renewable energy technologies that utilise the wind, solar, hydro, biomass, geothermal, oceanic and other renewable sources to generate electricity.

China is actively promoting the development of climate investment and financing domestically, welcoming all climate-friendly investments, and providing specific policy support. In 2020, five departments, including the MEE, jointly issued the Guiding Opinions on Promoting Investment and Financing in Response to Climate Change. The aim was to attract more social funds, including overseas funds, to support initiatives addressing climate change. This support is intended for both climate change mitigation and adaptation efforts, such as backing pilot demonstrations of carbon capture, utilisation, and storage.

In 2021, China initiated pilot programmes on climate investment and financing. In 2022, 23 cities and districts were selected as pilot zones to explore various investment and financing modes, organisational structures, service approaches and management systems. China supports international financial organisations and multinational corporations to conduct climate investment and financing operations in the pilot areas. Taking Guangzhou Nansha New District, one of the pilot districts, as an example, per the Implementing Rules for Several Measures to Promote the Development of Climate Investment and Financing in Guangzhou Nansha New District, the government will provide financial incentives for investment and financing institutions newly established or relocated to the Nansha New District. These institutions should primarily engage in climate investment and financing within China, meet specific conditions, and provide financial support for climate loans, climate funds, climate insurance, ESG bonds, and other related businesses.

In 2024, Shenzhen introduced the first local standard for climate investment and financing in China, titled Classification and Evaluation Specifications for Climate Investment and Financing Projects. This standard established a framework consisting of “Two types of projects (mitigation/adaptation) + Three levels of evaluation + Four indicators + Five industries”, serving as a model for the entire country.

In 2025, the People’s Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the Overall Statistical System for the Five Articles on Finance (for Trial Implementation), which included climate investment and financing within the scope of statistical monitoring, enabling a comprehensive understanding of the scale and direction of climate investment and financing. It also provides a foundation for policy formulation and adjustment.

At present, we have not identified any specific domestic policies or regulations issued by China in accordance with Article 6.8 of the Paris Agreement. However, China has supported developing countries in enhancing their climate resilience through South-South cooperation, “Belt and Road” climate financing, technology transfer (eg, renewable energy projects), and capacity-building (eg, the African Climate Monitoring Centre), and other non-market approaches. These actions align with the practices and implementation of the spirit of Article 6.8 of the Paris Agreement.