Abstract

To meet China’s goal of reaching carbon-neutrality by 2060, the state will have to surmount tremendous technical and bureaucratic obstacles in transitioning its coal-dependent economy toward renewable energy. Biomass has a carbon neutral life cycle and great potential for promoting climate change benefits. The main problems restricting biogas development in China are the lack of integrity and unified policy, and the contradiction between longer duration of environmental PPP (Public-Private-Partnership) project and social capital always pursuing short-term profits. PPP is an institutional arrangement of policy interaction, which means that there is a legally structured partnership between government and private actors. Therefore, we propose that China should further accelerate the construction of basic and standardized PPP legal system, further promote the innovation development of PPP model, and establish effective risk-sharing and credit constraint mechanisms. According to the degree of government involvement and the role of the market, biogas development can be divided into three main stages: the government support phase, the transitional phase and the market-driven phase. A policy path that adapts to China’s electricity market and biogas development is designed based on the three development stages, and it strictly follows the principles of development, coordination and innovation.

Keywords: Carbon-neutrality; Renewable energy; Biogas; PPP model; Market-driven