14 April 2016

China's 13th Five Year Plan: Environment

China’s 13th Five Year Plan promotes a cleaner and greener economy, with strong commitments to environmental management and protection, clean energy and emissions controls, ecological protection and security, and the development of green industries.

This demonstrates a clear focus on charting a sustainable course for the economy in the long-term and the desire to play a global role in curbing greenhouse gas emissions.

The Chinese government has proposed the following key initiatives and measures to reduce:

  • water pollution: construction of urban sewage treatment and supporting facilities, urban reclaimed water recycling, and continued reduction of waste emissions
  • smog and air pollution: coal-fired plant reform using low emission control technology, elimination of outdated industrial equipment and processes, improved monitoring of industrial pollution sources, and increased supervision of compliance by motor vehicles and vessels with environmental protection standards
  • soil pollution: increased environmental supervision of land undergoing construction development, enhanced hazardous waste pollution prevention and control, and new remediation policies for hazardous waste.

On environmental administration and enforcement, the government is looking at policies to:

  • set up cross-regional environmental protection and law enforcement agencies
  • require corporations to self-monitor emissions and disclose information on compliance with environmental regulations
  • establish a national carbon trading market.


Specific objectives for environmental protection in the 13th Five Year Plan period include:

  • reduction of water consumption by 35% by 2020 as compared with 2013 (which is consistent with the target in the Water Pollution Prevention and Control Action Plan)
  • estimated total consumption of primary energy in 2020 of less than 5 billion tons of standard coal
  • energy consumption per unit of GDP to be reduced by 15% in 2020 (compared with 2015)
  • reduction of carbon dioxide emissions per unit of GDP by 40-45% by 2020 (compared with 2015 which is consistent with China's Plan for Addressing Climate Change (2014-2020)).

The land of opportunity?

Opportunities for local and international businesses in China

The 13th Five Year Plan offers excellent opportunities for the private sector to support China’s environmental goals. Whether through direct investment or public private partnerships, foreign investors can bring clean technology and innovation into China as part of the large-scale environmental reform in the country.

Key opportunities for investors in clean technology include: soil remediation, hazardous waste management, wastewater treatment, clean energy and pollution monitoring technology.

The Plan also presents significant opportunities for clean energy and production enterprises.

Specifically, there will be development opportunities for enterprises with energy-saving and environmental protection technologies, energy performance contracting, water-saving management contracting and third-party governance of environmental pollution.

As the government increases investment into environmental protection infrastructure, this presents growth opportunities for investors looking to invest in sewage treatment, garbage treatment and disposal of hazardous waste.

The Chinese government will support energy-saving and environmental protection industries by implementing green finance, green tax and green government procurement. There will also be government support for the development of a number of large energy-saving and environmental protection enterprises which are internationally competitive, which will also create business opportunities for local enterprises.

The Plan also poses significant challenges for pollution-intensive enterprises, and enterprises under the special supervision of national, provincial or municipal governments. These businesses will face an increase in the costs for pollution control over the next five years, as more comprehensive pollutant emission standards and strengthened emissions monitoring and environmental protection supervision systems are rolled out.

From planning to implementation

Since the amendment of the Environmental Protection Law in 2014, China has been noticeably speeding up the drafting of environmental protection laws and regulations. The Law on the Prevention and Control of Air Pollution was amended in 2015. This year there will also be amendments to the Law on the Prevention and Control of Water Pollution and a new Law on the Prevention and Control of Soil Pollution.

In addition, the National Congress is planning to draft a number of other pieces of legislation, including the Law on the Prevention of Marine Environment, the Law on the Prevention of Radioactive Pollution, and the Law on the Assessment of Environmental Impact.

The environmental policy direction articulated under the 13th Five Year Plan will see more detailed and comprehensive ecological and environmental protection systems implemented in China over the next half decade. These include:

  • standards for carbon and waste emissions, clean energy, and water and soil pollution
  • a company environmental credit record and a blacklist of companies with illegal waste-discharging activities
  • reform of the system for monitoring, supervising and enforcement of compliance with environmental laws and regulations
  • a green tax system covering resource extraction, consumption, pollutant emission, and resource products import and export
  • promotion of green certification systems and green policies for government procurement.

Please contact one of our China experts to understand how the Plan is likely to impact you or to discuss new developments as its implementation progresses.

For an in-depth analysis of opportunities and implications for other key sectors, please see China’s 13th Five Year Plan: the land of opportunity.

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We explore the key issues being considered by clients looking to unlock investment opportunities in the People’s Republic of China.

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