Renewable Resources Law Passed During March NPC Session

April 10, 2005

During its March 2005 session, the National People's Congress (NPC) passed a new Renewable Resources Law, which will come into effect on January 1, 2006, according to an article in the 21st Century Business Herald. The law incorporates tax breaks, loan discounts, and special funding to encourage the use of energy from renewable resources and the development of independent renewable energy sources in rural and remote areas.

The Chinese government intends that the law address, in part, widespread electricity shortages in China. The law's drafters most likely included an emphasis on project development in rural and remote areas to promote comparable levels of development throughout China and prevent social unrest in less developed areas. News reports (1, 2) on the NPC action join recent media efforts to highlight official support for emissions reduction. Read more about official support for "green energy" projects to reduce emissions here.


The positive aspects of the new law are that it focuses on the use of energy from renewable resources, demands that related information be made public, and seeks to educate the public. Some problems still exist, according to news media commentaries. For example, a March 30 Xinhua article notes that, because the use of renewable resources is still in its infancy, Chinese users will continue to rely on polluting fuels to meet demand. A March 30th China Daily article indicates that most of China’s energy will continue to come from coal. And on March 31, a People’s Daily article reported on the start of construction on a major coal-fueled thermal power plant.

According to the 21st Century Business Herald article, controversy has also arisen over the law’s characterization of water as a renewable resource, because large hydroelectric power projects can have a negative impact on the environment. The government determined that the law would apply to hydropower projects based on the guidelines issued by relevant ministries and State Council offices and the approval of the State Council itself. But the law’s drafters did not incorporate the guidelines into the law, and thus how hydroelectric projects will be affected is unclear.

Since the law mandates that the line ministries and State Council offices responsible for renewable resources jointly formulate and implement a national renewable resources program, overlapping responsibilities shall also be a problem. The ministries and offices are responsible for developing their own industry standards, natural resources surveys, and development plans. For example, a Beijing Review article reports that the government agencies responsible for the renewable energy sector include the National Development and Reform Commission, the Ministry of Agriculture, the Ministry of Water Resources, and the Forestry Administration. Notably, the article does not say that the State Environmental Protection Administration is part of the administrative group.

In 2005,the Chinese news media has reported on controversy and corruption related to hydroelectric projects, other types of polluting projects, and implementation of environmental laws at the local level. Moreover, as some experts have pointed out, little cooperation or even communication may exist between government departments at various levels. Thus, while the new law may increase the use of renewable energy, it may also increase disputes over development plans, permit opportunities for greater corruption, and foster inaccurate reporting within the ministries and offices. In response, some government officials have advocated the creation of a Ministry of Energy, as reported in this China Daily article.