1 Annex: Summary and Provisional Targets of China’s 13th FYP

Annex: Summary and Provisional Targets of China’s 13th FYP

Sector/Area Specifics1

Greenhouse gas emissions

- CO2 intensity reduction of 18% by 20202 - China will surpass its goal to slash the carbon emissions in a unit of

GDP 40-45% on 2005 levels by 2020 by cutting its carbon intensity by 50% by the end of the decade3

- China surpassed its 12th FYP 17% target by reducing carbon intensity by 19%.4

Clean energy

- The Chinese government has set a target of 15% of energy mix to be non-fossil by 2020.

- China plans to add around 350GW-400GW of additional clean energy (total capacity in 2020: hydro 340 GW; pump storage 40 GW; wind 250 GW; solar 160 GW; nuclear 58 GW) by 20205, with investment amounting to RMB 2.3 trillion (€310 billion) by 2020.6

- China added around 200GW of new clean energy in 2011-2015. It surpassed its 12th FYP clean energy target of 11.4% by increasing its clean energy share of energy mix to 12%. 7

- China invested a total of $352.2 billion (€324 billion) in clean energy between 2011 and 2015.8

- China is already home to the world’s largest workforce for renewables-related industries. More than 3.4 million people are employed in the sector, with more than half of them concentrated on the solar photovoltaics sector.9

- China now has five and three out of the top ten solar panel and wind turbine companies in the world, respectively.10

Coal - China’s coal power consumption is expected to fall by 2-4% per year from now to 2020.11

- China plans to cut down 20% of its coal production, which involves closing down 4,300 coalmines (or 700 million tonnes of coal) over

1 The national carbon and energy intensity targets, as well as clean energy target, are official targets. Other sectoral targets will be officially confirmed throughout the year as the Chinese government releases sectoral 13th Five-Year Plans. 2 “Government report” (Zhengfu gongzuo baogao), People’s Daily, 5 March 2016 3 China will “far surpass” 2020 climate target, says top envoy”, Climate Home, 24 February 2016 4 “Progress on energy conservation and emission reduction exceeded expectation during 12th FYP, target for 13th FYP may need adjustment” (shierwu jienengjianpai jindu chaoyuqi, shisanwu zhibiao youwang tiaozheng) Finance Sina, 10 September 2015 5 "2.3 trillion yuan to be Invested in Important Projects of Renewable Energy" (kezaisheng nengyuan wunian xintou 2.3 wanyi, jiangjianshe duoge zhongda gongcheng), Xinhuanet, 29 January 2016 6 “Investment in renewable energy will reach RMB 2.3 trillion next five years under 13th FYP” (“shisanwu” kezaisheng nengyuan wunian xintou 2.3 wanyi) Science Net, 29 January 2016 7 Ibid. 8 Bloomberg New Energy Finance (2016) Clean Energy Investment Trends 9 Li Ying, “China's power sector and the economic 'new normal'”, Chinadialogue, 25 January 2016 10 “Top 10 solar module manufacturers in 2015”, PV-Tech, 21 January 2016 ; “Ten of the biggest and the best manufacturers”, Windpower Monthly, 30 June 2015 11 “China's coal-burning in significant decline, figures show”, The Guardian, 19 January 2016

2 Annex: Summary and Provisional Targets of China’s 13th FYP

the next three years and relocating one million workers, and will allocate RMB30 billion (€4.1 billion) to manage the transition.12

- China’s coal consumption fell for the first time this century in 2014, and continued to fall in 2015.

Energy

efficiency

- Energy intensity reduction of 15% by 202013 - Investment in energy saving and environmental protection

industry may reach RMB 17 trillion (€2.28 trillion) by 202014, and market for ESCO is expected to reach RMB 600 billion ((€80.4 billion).15

- China surpassed its 12th FYP 16% target by reducing energy intensity by 19.71%16 (reducing at least 1.6 Gt of CO2).

- The Chinese government spent around RMB 82 billion (€11 billion) on energy efficiency and emission reduction in 2014 and 2015 alone.17

Emissions Trading

- China will introduce a nationwide ETS in 2017, regulating around 3-4 billion tonnes of carbon dioxide a year by 2020, less than half of China's total.18

- China’s ETS will cover main industrial activities such as power, iron and steel, cement, paper, chemicals and nonferrous metals sectors.

- China’s carbon market started from almost nil in 2010 to 30 million tonnes of CO2 traded in July 2015.19

Grid - During the 13th FYP period, China will spend around RMB 2.4

trillion (€330 billion) on grid, RMB 1.7 trillion (€240 billion) of which on distribution network. 20 Original plan for smart grids investment is RMB 175 billion (€23.5 billion).21

- China is aiming to increase the total length of its high-voltage distribution lines to 1.01 million km (627,585 miles) by the end of 2020, more than double the 2014 level, whereas the medium-voltage distribution network is poised to grow to 4.04 million km by 2020.22

12 “China plans to close down 4300 coal mines and prohibits new coal mines over the next three years” (weilai 3nian zhongguo niguanbi 4300 zuomeikuang bing jinzhi xinmeikuang), CN Buxian, 27 January 2016 13 People’s Daily, 5 March 2016, Op. cit 14 “Investment in energy conservation and environment protection is likely to reach RMB 17 trillion under 13th FYP” (“shisanwu” jienenghuanbao shichang touzi youwangda 17 wanyi yuan), Xinhuanet, 8 August, 2015 15 “Energy efficiency service companies will reach 6000 by 2020” (2020 nian jieneng fuwu gongsi jiangda 6000 jia) , zhongguo nengyuan bao, 25 January 2016 16 “2015 energy intensity reduced by 5.6%, 12th FYP target exceeded” (2015 nian danwei GDP nenghao xiajiang 5.6%, “shierwu” mubiao chaoer wancheng) Yicai, 19 January 2016 17 “Explaining 2015 government report: subsidies for energy conservation and emission reduction increased by 40.4%” (jiedu 2015 nian guojia zhangben: jienengjianpai buzhu zijin zeng 40.4%) People Daily, 17 March 2015 18 “China's pilot CO2 markets look to expand as national trading looms”, Reuters, 25 September 2015 19 Geall, Sam et al., “China’s Low Carbon Future Offers Global Opportunities” (Chinadialogue, 2016) 20 ""Create another State Grid in five years - Have you really understood 2 trillion yuan investment in distribution grid"(wunian zai zaoge guojiadianwang, 2 wanyi peiwang touzi nizhen kandonglema?) Caixin Energy, 1 September 2015 21 “State Grid will maintain high investment in smart grid construction under the 13th FYP” (guowang wenbu tuijin zhinengdianwang jianshe, “shisanwu” touzi renjiang baochi gaowei), IOT World, 14 January 2016 22 Caixin Energy, 1 September 2015, Op. cit.

3 Annex: Summary and Provisional Targets of China’s 13th FYP

- By 2020, ultras high voltage (UHV) and other intra-regional transmission capacity will reach 400GW to connect all planned coal, hydro, nuclear and wind power to areas with high demand.23 Investment in UHV grid is expected to reach RMB 700 billion during the 13th FYP, extending the grid to 89,000 km.24

- China’s State Grid’s ambition to establish a Global Energy Interconnection (GEI) that will serve as a platform for extensive development, deployment and utilization of clean energy globally through the building of interconnected strong and smart grid using UHV grid.25

- During the 12th FYP, State Grid Corporation invested RMB 1.8 trillion (€250 billion) on grid,26 and had so far invested a total of RMB 500 billion (€124 billion) on UHV grid, extending it to 40,000 km.27

Clean

vehicles

- According to 13th FYP, cumulative production and sales of clean energy vehicles will reach 5 million each by 2020.28

- In 2015, China became the world’s largest producer and market for new energy vehicles (EV and PHEV), with around 330,000 vehicles sold, accounting for more than 1% of new car sales and three times increase from 2014.29 Between 2009-2015, China produced and sold nearly 500,000 new energy vehicles.30 As such, China overtook the US as the largest new energy vehicles producer and market.

Rail - China plans to spend RMB 3.8 trillion (€510 billion) on rail during the 13th FYP – RMB 3 trillion (€400 billion) on tracks and RMB 800 billion (around €107 billion) on trains.31

- China will build 30,000 km of new track over the next five years.32 - China invested RMB 3.58 trillion (€500 billion) on rail (a 47%

increase from the 11th FYP) during the 12th FYP, extending new rail track by 30,000 km.33

Innovation - China has a target of R&D reaching 2.5% of GDP by 2020 - $425 billion (€390 billion) by 2020 (with a GDP target of $17 trillion).

23 Chinadialogue (2016), Op. cit. 24 “Investment plan for UHV under 13th FYP is clear – RMB700 billion by 2020” (shisanwu tegaoya jianshe luxiantu mingxi, 2020 qian touzi 7000 yi) Sinoergy, 16 December 2016 25 “China's state grid to develop global energy interconnection”, Xinhuanet, 21 January 2016 26 “China State Grid Corporation plans to invest RMB439 billion in grid this year” (zhongguo guojia dianwang gongsi jihua jinnian touzi 4390 yi jianshe dianwang) Jiemian, 19 January 2016 27 World Nuclear Association (2016), Nuclear Power in China 28 "Production and sales targets of new energy vehicles are set at 5 million" (xinnengyuan qiche chanxiaoliang she mubiao 500 wanliang), news.163, 6 March 2016 29 "Torrent and undercurrent - A look back to clean energy vehicles in 2015" (jiliu yu anjiao - 2015 nian zhongguo xinnengyuan qiche huiwang), auto.sohu, 8 February 2016 30 “Why China became the world’s number 1 in new energy car sales in 2015” (2015 nian zhongguo xinnengyuan qiche xiaoliang weiheneng quanqiu diyi) China.com, 8 February 2016 31 “China plans to invest $538 billion in railway in 5 years: Report”, Chinadaily, 4 January 2016 32 Ibid. 33 “Historical investment in rail during the 12th FYP to reach RMB3.58 trillion” (“shierwu” tielu touzi wancheng 3.58 wanyi, chuang lishi xingao) Sohu, 4 January 2016

4 Annex: Summary and Provisional Targets of China’s 13th FYP

- China is poised to lead the world in total R&D spending by 2019.34 - China spent more on R&D in absolute terms than the EU for the

first time in 2014 (2.05% of GDP compared to the 28-member EU average of 1.94%).35

Green

finance - China will increase the role of financial market by utilizing the

following during the 13th FYP: energy right and pollution right; carbon trading; green asset securitization; green bonds; green loans; green stock index; environmental information disclosure; green industry fund; carbon fund and bond.36

- China’s green bond market may reap RMB 1.5 trillion (€210 billion) for renewable energy and environment projects within the next five years.37

- Chinese government may become one of the first to issue sovereign green bonds.38

34 “Higher R&D Investment in Renewable Energy Technologies Critical for Clean-Energy Innovation & Climate Action”, Breaking Energy, 13 May 2015 35 “China spends more on R&D than EU for first time in 2014: OECD”, Xinhuanet, 4 February 2016 36 “Ten major development in green finance under the 13th FYP” (“shisanwu” shiqi lvsejinrong fazhan shida lingyu), Finance Sina, 5 February 2016 37 “China's $230 Billion Green Bond Thirst to Supercharge Market”, Bloomberg, 4 February 2016 38 “China alone 'could smash 2015's global green bond record'”, Environmental Finance, 4 February 2016