Shanghai Issues New Rules Governing Special Fund for Energy Conservation and Carbon Reduction

Shanghai’s municipal government has approved a formal management framework for the city’s special fund supporting energy conservation, carbon reduction and emissions-reduction work, according to a notice made public this week. The fund draws on municipal fiscal budget allocations and is intended to back the city’s push toward its carbon-peaking and carbon-neutrality goals, alongside broader green-transition and pollution-control objectives.

Under the new framework, money will flow mainly as subsidies or performance-based rewardsacross eight priority areas: energy-sector decarbonization (including renewables and new power-system infrastructure); industrial and IT-sector efficiency upgrades; transport decarbonization (covering retrofits, phase-out of high-emission vehicles and EV substitution); building energy efficiency; promotion of low-carbon products; development of carbon-peak/neutrality management systems including product carbon-footprint tracking; circular-economy and resource-recovery projects; and air- and water-pollution reduction. Payout amounts are to be calculated based on category, measured carbon or pollutant reduction, and social benefit, with each project generally limited to support from only one policy area to avoid duplicate funding.

Applicants must maintain clean credit records, with no serious violations flagged on the national “Credit China” platformor in Shanghai’s energy/environmental sector. The Shanghai Development and Reform Commission and the municipal Finance Bureau will oversee overall coordination, while sector-specific authorities (covering industry, housing and construction, transport, commerce, ecology and environment, water, agriculture, and greening) draft implementing rules for their respective fields. The measures took effect July 1, 2026, apply retroactively to qualifying matters from June 1–30, 2026, and remain in force through December 31, 2030.