Electro Mobility Transportation Policy

China’s 13th Five-Year Plan – An Outlook for the Transport Sector

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The United Nations Climate Change Conference –COP21– in Paris end of 2015 and the preparations for the 13th Five-Year Plan (FYP) have shaped the discussion on transport policies in China for the last year. In this context, China’s president Xi Jinping announced plans for comprehensive measures to develop a low carbon transport sector within the timeframe of the 13th FYP from 2016-2020. During his opening speech Xi Jinping stated that “China will, on the basis of technological and institutional innovation, adopt new policy measures to improve the industrial mix, build low-carbon energy systems, develop green building and low-carbon transportation, and build a nation-wide carbon emission trading market so as to foster a new pattern of modernisation featuring harmony between man and nature”.

Developments in 2015
Before talking about the implications of COP21 and the 13th FYP for China, let us have a brief look at the developments of China’s transport sector in 2015. Projects worth 726.6 billion RMB were implemented in the last year. The Chinese railway network now extends to 121.000km of which 19.000km are dedicated high-speed rail tracks, an impressive 60% of the worldwide high-speed rail network. The focus of the extension was Central and West China. The number of vehicles on Chinese roads also continued to grow rapidly. In 2014, there were already 145.98 million registered cars on China’s roads.

The year 2015 can be considered a real break-through for e-mobility. Thanks to immense investments in charging infrastructure, purchasing subsidies, and local demand management measures, electric vehicles are now a common sight in Chinese cities. Around 350.000 New Energy Vehicles (NEVs include battery electric vehicles, plug-in hybrids and fuel-cell vehicles) were sold in China in 2015. This is an increase of 300% while national production increased by 400%. With its annual production volume of over 270,000 in 2015, China ranks on the top of international markets. However, the high subsidies, which were key to kick-off the market development, continue to burden national and local government budgets. Consequently, China is looking to amend their approach in 2016.

What to expect in 2016 and beyond
On June 30 China submitted its Intended Nationally Determined Contribution (INDC) that describes the climate change commitments to the climate conference in Paris. Aiming for a 30% increase in public transport of motorised transport in cities, as specified in China’s INDC, New Energy and alternative fuels will be promoted and the improvement of conditions for cyclers and public transport in cities will be prioritised. The transformation of an intended contribution to a determined contribution will be key concern for 2016 and beyond (find a brief summary of the INDC here). In March 2016, China released its 13th FYP, a national strategy set by the country’s top leaders to guide the social, political, and economic development, which for the first time specifically mentions low carbon transport development.

The 13th FYP points out that an efficient, intelligent, green, and connective infrastructure network should be built to contribute to the overall economic and societal development. The main tasks of the transport sector in the 13th FYP period are to promote low carbon and intelligent development and to further improve modern comprehensive transportation systems, which support the national strategies: One Belt, One Road; the Beijing-Tianjin-Hebei integration initiative; and the Yangtze Economic Belt Initiative.

Against this background, China will see the following developments over the course of the next five years:

Considering these targets and the emphasis on green development outlined in the 13th FYP, the political relevance of climate protection within the transport sector is likely to increase. In summary, it can be stated that there has already been a positive change in the political environment, not only with regard to high investment volumes for infrastructure projects but also in terms of increasing efficiency in the implementation of sustainable transport solutions.

As far as e-mobility is concerned, we will most likely continue to see a growing market but under a new policy regime. China will start to phase-out direct financial subsidies for electric vehicles and support the market development by market-based instruments such as an NEV-credit system. As a key driver for the continued market uptake the Chinese government identified a physical charging infrastructure, interoperability of charging infrastructures and safety standards. Spearheaded by the National Energy Administration, 4.8 Million charging poles are to be built by 2020.

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