Published by ChinaMNC · Sansha

China’s New Energy Supply Contract Rules: What Foreign Founders Need to Know Before December 1, 2026

China’s energy regulator has issued new rules for long-term energy supply contracts covering coal, power and natural gas. Foreign founders operating energy-intensive businesses in China should understand the framework, timing and compliance expectations.

What Changed and Why It Matters

China’s National Development and Reform Commission (NDRC) has issued the Measures for the Administration of Medium- and Long-Term Contracts for Energy Supply Guarantee (Trial), published as NDRC Order No. 50 of 2026. The measures take effect on December 1, 2026. The NDRC explained the policy in a question-and-answer article on the government website.

The new rules create a single regulatory framework for medium- and long-term energy supply contracts in three categories: thermal coal (power coal), electricity and natural gas. For foreign founders running manufacturing, processing or other energy-intensive operations in China, the framework matters because it shapes how energy supply relationships are contracted, performed and supervised.

Background: A Long-Standing System Becomes Formal Regulation

According to the NDRC, medium- and long-term energy supply contracts are not a new idea. They developed gradually through years of practice in energy supply work and are described as a foundational institutional arrangement. The NDRC states that these contracts help the market build stable and predictable supply-demand relationships and support effective links across energy production, supply, storage and sales.

The NDRC also notes that during the 15th Five-Year Plan period, China’s energy development faces overlapping stages: evolving security risks, accelerated low-carbon transition, rapid energy innovation, deeper institutional reform and reshaped international cooperation. The 15th Five-Year Plan outline calls for improving the medium- and long-term energy supply contract system. The measures were drafted to give that system a firmer legal and regulatory basis.

Guiding Principles Behind the Measures

The NDRC says the measures follow four principles. Foreign founders do not need to memorise them, but they indicate how regulators will interpret the rules:

• Market mechanisms combined with rule of law. Enterprises are expected to negotiate and sign contracts on their own, while government handles coordination, basic livelihood protection and performance supervision.
• Energy security底线 plus priority for people’s livelihood. The rules protect the national energy security bottom line and, in principle, give priority to household energy demand when contracts are signed and performed.
• Goal-oriented and problem-oriented. Proven practices are turned into formal rules, and problems in signing and performance are addressed through incentives and constraints.
• Unified design with category-based management. A single institutional framework applies, but detailed rules differ for coal, electricity and gas because their supply and demand characteristics vary significantly.

Structure of the Measures

The measures contain six chapters and 45 articles. Chapter 1 sets out the legislative purpose and basis, contract categories, scope of application, working principles and division of responsibilities. Chapters 2 to 4 cover the specific management of the three contract categories, including definitions, signing and performance, changes and adjustments, and service support. Chapter 5 addresses legal liability and supervision, including dispute handling and policy incentives and constraints. Chapter 6 contains supplementary provisions on implementation timing and interpretation.

What the Rules Require in Practice

The NDRC highlights three main areas.

1. Clear Rights and Obligations

Energy companies have a social responsibility to ensure safe and stable supply. Suppliers and buyers should negotiate or trade on market terms and sign and perform contracts in accordance with laws and regulations. The measures also clarify the responsibilities of transmission and support enterprises and of relevant government departments, forming a chain described as “enterprises bear primary responsibility, government supervises, and responsibilities are assigned by level.”

2. Standardised Contracting and Performance

Based on the need to balance total supply and demand and protect basic livelihood needs, the measures set category-specific rules for signing and performing contracts, with the aim of improving supply stability and reliability. During performance, and on the premise that safe and stable supply is ensured, the parties may agree to modify or adjust a contract. This balances contractual rigidity with flexibility.

3. Stronger Supervision

The measures specify legal liabilities and the circumstances in which responsibility is pursued. Where energy supply work is seriously affected, responsibility is pursued under relevant laws and regulations. The measures also establish policy incentive and constraint mechanisms intended to improve the quality and effectiveness of contract performance.

Practical Takeaways for Foreign Founders

If your China-based company depends on thermal coal, grid electricity or natural gas, review your supply arrangements before December 1, 2026. The measures do not create new subsidies or guarantees for foreign-invested enterprises. They do, however, formalise expectations around market-based negotiation, lawful contracting, performance and government supervision. Companies should ensure that energy supply contracts are properly documented, that change procedures are understood, and that internal compliance teams monitor how the rules are applied in their location and sector.

The NDRC says it will work with relevant parties to publicise and explain the measures, guide local departments, energy companies and trading centres to understand and implement them, monitor implementation, strengthen supervision of signing and performance, and address problems as they arise.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.