China to raise power prices for energy-intensive sectors in green transition push
Beijing’s latest road map aims to cut carbon emissions by 200 million tonnes by 2028 – but analysts say implementation may vary across regions
Beijing plans to increase electricity prices on nine energy-intensive sectors in a move to speed up the green transition and drive a new wave of industrial upgrading.
The most direct measure is a power price increase capped at 0.1 yuan (1.4 US cents) per kilowatt-hour, aimed at pushing energy-inefficient plants to upgrade equipment and bring operations in line with required standards.
Officials said the cumulative energy savings could reduce carbon emissions by more than 200 million tonnes by the end of 2028. China’s total carbon emissions reached more than 11.2 billion tonnes in 2020, according to a Ministry of Ecology and Environment report published in 2024.
Analysts said the policy road map could have far-reaching implications across sectors, but noted that elevated commodity prices, particularly for aluminium, meant upstream producers were unlikely to face significant pressure.
“In the short term, I think the three-year road map will have limited impact on the aluminium sector given the industry’s current profit margins,” said Jing Chuan, an independent commodities analyst with more than 30 years of experience.
“Since the central government imposed a production cap on primary aluminium, which has resulted in a supply-demand gap, factories have been able to pass rising costs on to downstream buyers. This gives them less incentive to upgrade.”