China’s 15th Five-Year Plan: Implications for Australia’s Economic and Environmental Future

One standout example from the 14th Five-Year Plan is the Yumen renewable energy complex in Gansu province, which combines solar thermal, wind and photovoltaic technologies. It generates 1.75 billion kilowatt-hours of electricity annually, enough to power over 250,000 Australian households for a year, or meet around 19 days of electricity demand in New South Wales and 29 days in Victoria. The project also avoids 1.35 million tonnes of CO₂ emissions, roughly equivalent to the annual footprint of 96,000 Australians^[2]. More than just a clean energy milestone, Yumen showcases an integrated model of ecological protection: solar panels generate power overhead, while sand stabilisation and vegetation restoration take place below. It is considered as a benchmark for balancing energy development with environmental restoration across Western China^[3].

The 15th Five-Year Plan places further strategic emphasis on emerging green industries, including low-carbon manufacturing, renewable energy and zero-carbon industrial parks. This signals not just an acceleration of China’s domestic green transition, but also a concerted push to shape global standards for sustainable production. In renewable energy, China has already established dominance across the entire supply chain, from photovoltaics and wind turbines to energy storage technologies, leading the world in scale, cost-efficiency and technological innovation. In addition to environmental benefits, this also reduces China’s reliance on energy imports, thereby mitigating exposure to vulnerabilities in international energy markets.

Zero-carbon industrial parks are now emerging as integrated platforms that combine clean energy systems, environmental regulation and digital infrastructure. These developments are more than sectoral upgrades; they seem to form the backbone of an institutional framework designed to support green transformation within a sustainable industrial ecosystem^[4].

At the time writing, 15th Five-Year Plan does not explicitly mention coal reduction targets, however, the National Development and Reform Commission has released a dedicated Action Plan for the Low-Carbon Transformation of Coal Power (2024–2027)^{[5], [6]}, which seems to overlap the 15th Five-Year Plan and sets ambitious targets:
 

• By 2025, retrofitted units are expected to reduce CO₂ emissions by 20% compared to 2023 levels
  

• By 2027, the goal is a 50% reduction, approaching the emissions intensity of gas-fired power

• New coal projects are subject to stricter environmental standards

• Coal’s share is expected to decline as non-fossil sources drive over 80% of energy growth by 2060

While not formally tied to the 15th Five-Year Plan as yet, the Action Plan for the Low-Carbon Transformation of Coal Power likely serves as a precursor to broader coal-related policies under the 15th Five-Year framework.

Australia’s Green Crossroads

What do these significant shifts in China’s pivot toward a more green, innovation-led development mean for Australia, a country rich in critical minerals but still navigating its own green transition?

For Australia, China’s green transformation cuts both ways. On one side, surging Chinese demand for critical minerals such as high-purity lithium and rare earth elements, as well as green hydrogen, brings substantial export dividends for Australia’s mining sector. For instance, China’s technical shortcomings in extracting lithium from hard-rock deposits and high-magnesium brines enhance Australia’s negotiating power in upstream resource markets.

But the opportunity comes with risks. Without building local capacity in downstream activities, such as rare-earth refining, battery assembly and hydrogen production, Australia risks being locked into the lower-value end of global green supply chains. Indeed, the core segments of most green industrial chains currently remain predominantly located in China, leaving Australia notably behind in terms of technological standards, carbon pricing mechanisms and supporting institutional frameworks.

During its 15th Five-Year Plan period, China intends to introduce new carbon intensity standards, green classification directories and eco-labelling systems. These measures, while primarily intended to serve domestic governance objectives, will also strategically position China within global regulatory competitions. While Australia has set a 43% emission reduction target by 2030, its approach remains conservative^[7]. The Sustainable Development Report 2024 shows that Australia performs below most Organisation for Economic Co-operation and Development (OECD) countries on key climate action indicators, including per capita CO₂ emissions from fossil fuel combustion and its carbon pricing score^[8]. Given China’s expanding influence in global green governance, it is timely for Australia to accelerate its clean energy transition.

Australia’s Clean Energy Push: Progress and Gaps

Since 2022, Australia has ramped up its use of renewable energy, with solar and wind now supplying nearly 40% of electricity. Backed by national schemes, the goal is to reach 82% by 2030, leveraging nation's abundant solar and wind resources^[9].

Moreover, the potential for Australia-China collaboration in green development remains significant. The experiences of enterprises like Goldwind, Contemporary Amperex Technology (CATL) and Beijing Energy in Australia’s wind, energy storage and solar sectors illustrate strong complementarity between resource endowments and technological capabilities between the two countries. Goldwind, for instance, has operated in Australia for 15 years, delivering approximately 2GW of wind power equipment and developing major projects such as the largest operational wind farm in the Southern Hemisphere, Stockyard Hill (530MW). Recent cooperation with Pacific Energy successfully delivered wind equipment for the Tropicana project, setting a new Australian record for wind equipment transport distances^[10].

Future collaborations could encompass smart microgrids, green industrial parks and carbon market mechanisms. With China increasingly participating in global green finance initiatives — such as green bonds and carbon trading markets — Australia could explore opportunities to align its domestic carbon market with emerging international practices. Furthermore, joint development of climate-adaptation projects targeting Pacific Island countries would enrich the regional provision of public goods in green development.

In response to the green signals emerging from China’s 15th Five-Year Plan, Australia could strategically adjust its approach across policy and technology, integrating green innovations into its resource-based economy while expanding its footprint in technology-driven sustainable industries. As global green transformation enters a phase of institutional consolidation, Australia could seize this window to engage proactively in developing international green standards and domestic capacity-building by adopting an integrated strategy of ‘participation, strategic positioning and empowerment’.
 

Green Diplomacy and the Future of Australia–China Collaboration

At present, China is increasingly engaging in global climate standard-setting through its emissions trading scheme, green finance taxonomies and active diplomacy at the 28th and 29th Conferences of the Parties (COP), as well as through Belt and Road initiatives. Compared to China’s broad engagement, Australia’s efforts have so far focused more narrowly on Pacific partnerships. There is, therefore, scope for Australia to expand its influence across a wider range of international standard-setting arenas^{[11], [12]}.

One promising area where Australia can broaden its engagement is the hydrogen sector, which aligns closely with China’s own strategic priorities. Australia’s push to build a competitive hydrogen industry reflects this opportunity. The 2020 launch of the ‘H2 under $2’ target, followed by the 2024–25 Budget’s $2 billion expansion of the Hydrogen Headstart program and the new $2/kg Hydrogen Production Tax Incentive, shows strong policy momentum. These initiatives closely mirror China’s emerging green hydrogen agenda, creating real potential for joint standard-setting and deeper bilateral collaboration in clean energy innovation^{[13], [14]}.

The Australian government plans to invest around $20 billion in low-carbon technologies between 2020 and 2030, leveraging an additional $80 billion from private and state capital. Investment focuses on hydrogen, battery storage, low-carbon steel and aluminium, carbon capture and storage, and soil carbon measurement technologies, with clear cost and timeline targets. For instance, the cost target for hydrogen-based steelmaking is $700 per ton and battery storage at $100 per MWh^{[15], [16], [17]}. To maximise the impact of its green innovation agenda, the government could do more to bridge the gap between research and commercial application, clarifying how public R&D efforts translate into scalable, market-ready technologies. Dedicated funding could be established to support the domestic commercialisation of low-carbon technologies and the local manufacturing capacity of key equipment.

Australia could promote collaborative research centres and talent training mechanisms with Chinese institutions such as the China Council for International Cooperation on Environment and Development (CCICED). As a high-level advisory body in China, CCICED has played a central role in shaping green standards through its cross-sectoral policy research and international partnerships. Collaborating with such institutions could help Australia build a technically equipped workforce familiar with evolving climate governance frameworks, supporting its strategic engagement in standard-setting and green development. Current funding mechanisms and platforms like Australian Renewable Energy Agency (ARENA) and Clean Energy Finance Corporation (CEFC) are essential channels for guiding research capital towards emerging green industries. Advisory bodies, including Macquarie Group, can further strengthen intellectual support for strategic decision-making.
 

Conclusion

China’s 15th Five-Year Plan marks a notable pivot toward a green, innovation-led development trajectory with growing global significance. For Australia, the challenge lies in moving beyond a reliance on resource exports to remain competitive in a landscape shaped by evolving green standards and industrial policy. As China accelerates its leadership in green technologies, carbon standards and sustainable industrial ecosystems, Australia must strategically position itself to remain competitive and resilient. Based on the analysis above, Australia may consider the following strategic actions:

• Avoid over-reliance on raw material exports by investing in downstream industries like battery manufacturing, rare-earth refining and hydrogen production, and

• Strengthen local capabilities in clean energy technologies to capture greater value within global green supply chains, and

• Take a more active role in shaping global environmental standards and carbon market mechanisms, where China is increasingly influential, and

• Leverage complementarities between Australia’s resource strengths and China’s technological leadership through joint projects in renewables, hydrogen and smart infrastructure, and

• Scale up investment in renewables and low-carbon technologies to meet national emissions targets, while addressing gaps in carbon pricing and regulatory frameworks, and

• Support collaborative research centres and training programs to build a workforce equipped for the green economy and climate governance.

Collectively, these measures would help Australia navigate the global green transition and play a more active role in shaping a sustainable economic future.

References

[1]  新华社. (2025). 哪些“十四五”指标已提前完成？. 中国政府网. https://www.gov.cn/zhengce/202503/content_7010758.htm

[2] The figures are calculated by the author based on the Australian Energy Regulator and World Bank data. Websites are: https://www.aer.gov.au/ and https://data.worldbank.org/.

[3] 中国能源建设股份有限公司. (2025). 中国能建：2024年度环境、社会及治理(ESG)报告. 新浪财经. https://vip.stock.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=601868&id=10829844

[4] Zhang, B., Wang, Y., Pan, L., Guo, X., Liu, Y., Shi, C., Xue, S., Wang, L., Chang, X., & Fan, L. (2025). Net Zero Carbon Park Planning Framework: Methodology, Application, and Economic Feasibility Analysis. Energy, 325, 136205. https://doi.org/10.1016/j.energy.2025.136205

[5] 国家发展改革委网站. (2024). 国家发展改革委有关负责同志就《煤电低碳化改造建设行动方案（2024—2027年）》答记者问. 中国政府网. https://www.gov.cn/zhengce/202407/content_6963526.htm

[6] 突破能源联盟. (2025). “十五五”可再生能源需要持续大规模发展. 索比光伏网. https://news.solarbe.com/202504/07/387830.html

[7] Moon, G. (2024). Escalation: The Destructive Force of Australia’s Fossil Fuel Exports on Our Climate. https://www.humanrights.unsw.edu.au/sites/default/files/documents/2024%20Escalation%20Report%20%5Bv7%5D.pdf

[8] Sachs, J.D., Lafortune, G., Fuller, G. (2024). The SDGs and the UN Summit of the Future. Sustainable Development Report 2024. Paris: SDSN, Dublin: Dublin University Press. https://doi.org/10.25546/108572

[9] Australian Government Department of Climate Change, Energy, the Environment and Water. (2025). Renewable Energy. DCCEEW. https://www.dcceew.gov.au/energy/renewable

[10] 金风科技. (2024). 金风科技与太平洋能源合作，完成澳洲项目风电设备交付. 金风科技. https://www.goldwind.com/en/news/focus-1055900015844862976/?id=1055900331269044224

[11] Ministry of Ecology and Environment, The People’s Republic of China. (2025). China’s Policies and Actions Addressing Climate Change 2024 Annual Report. https://english.mee.gov.cn/News_service/news_release/

[12] Australian Government Department of Foreign Affairs and Trade. (2025). Climate Change. https://www.dfat.gov.au/international-relations/themes/climate-change

[13] Hartley, P. (2021). Towards a Large-scale Hydrogen Industry for Australia. CSIRO. https://www.csiro.au/en/news/All/Articles/2021/January/towards-a-large-scale-hydrogen-industry-for-australia

[14] Australian Government Department of Climate Change, Energy, the Environment and Water. (2024). Annual Climate Change Statement 2024. DCCEEW. https://www.dcceew.gov.au/climate-change/strategies/annual-climate-change-statement-2024

[15] Australian Government Department of Climate Change, Energy, the Environment and Water. (2021a). Australia’s Long-Term Emissions Reduction Plan. DCCEEW. https://www.dcceew.gov.au/climate-change/publications/australias-long-term-emissions-reduction-plan

[16] Australian Government Department of Climate Change, Energy, the Environment and Water. (2021b). Technology Investment Roadmap. DCCEEW. https://www.dcceew.gov.au/climate-change/publications/technology-investment-roadmap

[17] Australian Government Department of Climate Change, Energy, the Environment and Water. (2025). Net Zero. DCCEEW. https://www.dcceew.gov.au/climate-change/emissions-reduction/net-zero