In 2024, China's 20th Third Plenary Session marked a pivotal shift in its economic strategy, with a pronounced focus on "Development and Security." This session set the course for a redefined oil and petrochemical landscape, prioritizing energy security alongside green, low-carbon transition. However, in October 2025, the 20th Fourth Plenary Session further refined these policies through the release of the "15th Five-Year Plan" proposal, which highlighted the critical need for a systemic overhaul of China's energy and industrial sectors.
1 | Policy Shifts: The Evolution from the Third Plenary to the Fourth Plenary
2024 Third Plenary Session: "Development and Security" as Core Directives
The 2024 Third Plenary Session set the stage for China's energy and petrochemical industries by focusing on "Development and Security." The key points addressed the need for energy system reforms, with a focus on strengthening domestic reserves and enhancing strategic oil and gas supply chains.
China's long-term economic strategy now hinges on achieving a balance between environmental sustainability and energy security. For the petrochemical and oil sectors, this means transitioning away from traditional energy sources to more sustainable, greener alternatives, while addressing the country's growing energy security needs.
2025 Fourth Plenary Session: The 15th Five-Year Plan and Beyond
The 2025 Fourth Plenary Session brought more concrete action with the release of the "15th Five-Year Plan" proposal. This plan marks the shift from strategic planning to actionable goals, setting the tone for energy modernization, industrial upgrading, and the drive towards carbon neutrality. Key areas of focus include:
- Energy System Restructuring: Moving away from traditional energy reliance towards a more sustainable, low-carbon energy matrix.
- Green and Low-carbon Development: A strengthened focus on carbon emission control, with significant changes to policy frameworks related to carbon pricing, emissions trading, and renewable energy adoption.
- Industrial Upgrading: A major push towards industrial green transformation, where energy efficiency and low-carbon technologies will become integral to the petrochemical and oil industries.
The "15th Five-Year Plan" highlights the need to advance energy security and environmental goals in parallel. For the oil and petrochemical sectors, this means reshaping business models to align with a low-carbon economy while safeguarding energy security.
2 | Green Transition and Energy Security: The Dual Drivers of Change
Green Low-carbon Transition: A Shifting Energy Paradigm
The "15th Five-Year Plan" envisions a profound green transition in China's energy landscape. By 2027, China aims to build approximately 100 national-level zero-carbon industrial parks, which will serve as hubs for industrial green transition. The integration of digital and green technologies will be crucial in this shift.
For the petrochemical and oil sectors, the adoption of green and digital technologies is not optional - it is becoming an imperative. The development of green fuels, such as biofuels, marine fuels, and low-sulfur fuels, will also accelerate, presenting new opportunities and challenges for companies in the oil value chain. By 2027, China is expected to see a significant increase in the adoption of these alternative fuels, impacting demand for traditional oil products.
Energy Security: From Supply to System Resilience
In response to extreme weather events, geopolitical risks, and supply chain disruptions, China's energy security strategy now focuses on creating a more resilient energy infrastructure. Key elements of this strategy include:
- Diversification of Supply: Emphasizing both domestic resource exploration and international diversification to secure energy supply.
- Flexible Energy Reserves: Investments in new energy storage technologies and flexible power sources to ensure stable energy distribution.
- Supply Chain Resilience: Strengthening the energy infrastructure to withstand disruptions and enhance national security.
For the oil industry, this means adapting to a more complex energy system where flexibility and resilience are prioritized alongside traditional supply assurances
3 | Industry Impacts: Regulatory Adjustments and Market Shifts
Consumption Tax Reform and Export Rebate Adjustments
In 2025, key tax reforms are expected to affect the oil and petrochemical industries. The shift in consumption tax liability from refineries to retailers will have major fiscal and operational implications. The change will lead to higher compliance costs and price pressures, particularly for smaller, independent refiners who rely on tax evasion for profitability.
Refinery Feedstock Rules and Compliance Adjustments
As China moves towards a greener energy system, these regulations will encourage refineries to adopt more sustainable production processes. The policies will also address the growing demand for high-quality feedstock in petrochemical applications. Refineries will need to integrate more eco-friendly feedstocks, enhance energy efficiency, and meet stricter environmental standards. This shift is expected to lead to a more competitive market where integrated, compliant companies will be better positioned to retain market share.
4 | "Two New Upgrades" & Green Fuel Policies: Shaping Long-term Market Dynamics
Green Fuel Policy Development
The drive for green fuel production will reshape China's oil and petrochemical industries. The "15th Five-Year Plan" sets out clear goals for increasing the use of biofuels, marine fuels, and low-sulfur fuels. The integration of these alternative fuels into China's industrial and transportation sectors will transform both domestic and global oil markets.
The development of new green fuel technologies will require oil companies to rethink their product portfolios and align with green energy objectives. Those who can transition to biofuels, hydrogen, and low-carbon alternatives will gain a competitive edge in a rapidly changing market.
5 | Strategic Recommendations: Navigating Policy Shifts and Industry Transformation
From Policy to Action: Strategic Alignment with National Goals
The key for oil and petrochemical companies is be to align their strategies with the green transition outlined in the "15th Five-Year Plan." This entails increasing investment in low-carbon technologies, improving energy efficiency, and strengthening carbon management.
Carbon management, once seen as a "bonus" for companies, will become a critical factor in survival. Businesses that can integrate carbon management systems into their operations and demonstrate their commitment to sustainability will be better positioned for long-term success.
Building Resilience: Emphasizing Flexibility and Innovation
As energy security and supply chain resilience strengthen, enterprises should focus on enhancing supply chain management and investing in flexible energy solutions - integrating storage technologies, renewable access, and backup systems to enhance adaptability to regulatory and market shifts.
Conclusion: Embracing the Systemic Transformation
The "15th Five-Year Plan" marks the beginning of a systemic transformation for China's energy and industrial sectors. The oil and petrochemical industries are at the center of this change, driven by the dual goals of green transformation and energy security. Companies that understand the deeper logic behind these policies and align their strategies will secure a competitive advantage in the coming decades.
The next five years will be pivotal for companies in the oil and petrochemical sectors. Those who are proactive in adapting to regulatory changes, integrating sustainable practices, and building resilient systems will thrive in a rapidly evolving market. This is a critical window of opportunity for businesses to reposition themselves and lead in the new green energy economy.
Click here for more insights into China's evolving energy policies and their implications for the oil and petrochemical industries.
This white paper is part of the Special One-off Report – Thriving in Turmoil: Unveiling the Future of China's Oil Market (2024–2030)
Explore the previous editions here:
A 360 View: Navigating China's Oil Value Chain from Crude to Fuel Oil
From Margin Disruptions to Product Rebalancing: China's Refining Response Mechanism
Macroeconomic Drivers & China's Shifting Oil Demand Structure (2024–2030E)
Sectoral Shifts in China's Economy: Redefining Oil Demand through 2030E
Import quotas and supply security: What's next for China's crude?
China's refining 2030: optimizing capacity, raising efficiency
China's refined oil 2030: demand reversal, policy discipline, and managed balance
Crack spreads & margins: where profit lies in China's oil value chain
