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Regulations on the Utilization of Natural Gas (Approved at the 12th Committee Meeting of the **Development and Reform Commission on May 29, 2024; issued by Order No. 21 of the **Development and Reform Commission on June 3, 2024; to come into effect on August 1, 2024). The Regulations on the Utilization of Natural Gas were approved at the 12th Committee Meeting on May 29, 2024, and are now hereby published, coming into effect on August 1, 2024. June 3, 2024 Regulations on the Utilization of Natural Gas Article 1 These regulations are formulated to standardize the utilization of natural gas, optimize the consumption structure, improve utilization efficiency, promote conservation, and ensure energy security. Article 2: Activities related to the utilization of natural gas within the territory of the People’s Republic of China shall be carried out in accordance with these measures. This Measures shall apply to the utilization of domestically produced natural gas (including conventional natural gas, as well as unconventional natural gases such as shale gas, coalbed methane, tight gas, etc., and coal-derived gas) and imported natural gas (including imported pipeline gas and imported liquefied natural gas, etc.). Article 3 The **Development and Reform Commission** and the Energy Bureau are responsible for the national management of natural gas utilization. The development and reform commissions, energy bureaus of each province (autonomous region, municipality directly under the Central Government), or the departments designated by the provincial governments are responsible for the management of natural gas utilization within their respective administrative regions. Article 4: The utilization of natural gas shall adhere to a coordinated production, supply, storage, and sales system, ensuring balanced supply and demand as well as orderly development ； Adhere to adapting measures to local conditions and implementing targeted policies to safeguard people’s livelihoods, key areas, and development ； Adhere to green and low-carbon development, and promote the positive role of natural gas in the construction of a new energy system. Article 5: The utilization of natural gas is classified into priority, restricted, prohibited, and permitted categories. For priority gas-use projects, local people’s governments at all levels and relevant departments are encouraged to provide policy support in areas such as planning, land use, financing, and fiscal policies. Article 6: The priority categories for natural gas utilization refer to those approaches to using natural gas that contribute to ensuring **energy security and achieving the dual-carbon goals, facilitate the optimization and upgrading of the industrial structure, help safeguard people’s livelihoods and improve their living standards, and offer good economic and social benefits. Priority categories include: (1) gas used for cooking and domestic hot water by urban residents ； (II) Use of gas in public service facilities (kindergartens, schools, hospitals, social welfare and assistance institutions recognized by civil affairs departments, government offices, staff canteens, accommodation venues such as hotels and guesthouses, dining establishments, shopping malls, office buildings, ports, docks, railway stations, bus stations, airports, etc.) ； (III) Users of centralized heating (referring to those in the central urban area and the core zones of new districts) ； (IV) Rural clean heating projects (including those for household cooking and domestic hot water use) that have been included in the **-level planning, for which gas supplies are available and gas prices are affordable, and for which construction has been completed following the approach of carrying out upgrades based on gas availability ； (5) Interruptible industrial users powered by natural gas ； (VI) Natural gas peaker power plant projects with secured gas sources and economic sustainability ； (VII) Natural gas cogeneration project ； (8) Solar thermal power generation projects with afterburning ； (IX) Natural gas distributed energy projects (with an integrated energy utilization efficiency of over 70%, including projects that involve the combined use of renewable energy sources and multiple energy types) ； (10) Ocean-going vessels, engineering and government service vessels, as well as marine engineering equipment for the development, utilization, and protection of the oceans (including dual-fuel and LNG-only fueled equipment); inland waterway, lake, and coastal transport, engineering, and government service vessels and equipment that use LNG as their sole fuel ； (11) Transport vehicles such as freight trucks, intercity passenger cars, and buses powered by liquefied natural gas ； (12) New business models for the efficient and safe utilization of natural gas, such as integrated energy supply projects involving oil, gas, electricity, and hydrogen, as well as demonstration projects for blending hydrogen into natural gas at the end-use stage. Article 7: Areas where the use of natural gas is restricted are those that are not conducive to resource and energy conservation, nor to the optimization and upgrading of the industrial structure, or where there is low-level redundant construction; new projects for using natural gas in such areas should be prohibited (and existing production capacities should not be expanded any further). The restricted categories include: (1) rural clean heating projects other than those specified in Article 6, item (4), and Article 9, item (2) ； (II) Base-load gas-fired power generation projects for the construction of 14 large-scale coal production bases: Shendong, Northern Shaanxi, Huanglong, Northern Shanxi, Central Shanxi, Eastern Shanxi, Western Shandong, Lianghuai, Central Hebei, Henan, Yunnan-Guizhou, Eastern Mongolia (Northeast), Ningdong, and Xinjiang ； (III) Plants for producing methanol and its downstream products using natural gas as raw material, and projects for producing methanol from natural gas instead of coal ； (IV) Using methane as a raw material, the primary products include acetylene, chloromethane, and other minor C1 chemical products ； (5) Ammonia synthesis and nitrogen fertilizer projects using natural gas as raw material, as well as projects to convert ammonia synthesis plants from coal to gas usage ； (VI) New natural gas-based hydrogen production projects other than those specified in Item (VI) of Article 9. Article 8: Prohibited uses of natural gas refer to those that violate relevant laws, regulations, and the Guidelines for Industrial Structure Adjustment, result in severe waste of natural gas resources, do not meet the requirements of the energy revolution, and for which policy measures are necessary to eliminate such uses. Prohibited application areas include the production of synthetic ammonia using the atmospheric-pressure batch conversion process for natural gas. Article 9 Apart from the priority, restricted, and prohibited categories stipulated in these Measures, any utilization directions for natural gas that comply with relevant laws, regulations, and policies are classified as permitted categories. For projects falling under such permitted utilization directions, business entities are allowed to develop them in an orderly manner, provided that a stable gas supply source is secured and economic sustainability is ensured. Areas where natural gas technology is relatively mature, and which possess a competitive advantage over alternative energy sources at present and for some time to come, along with relatively stable markets, include: (1) residential heating users in urban areas that already have access to natural gas but do not use centralized heating systems ； (II) New rural clean heating projects that have been included in the **-level planning, for which gas supplies are available and gas prices are affordable, and are implemented following the principle of \"adjusting improvements based on gas availability\" ； (III) In industrial sectors such as building materials, mechanical and electrical equipment, light textiles, petrochemicals, and metallurgy, projects that utilize natural gas as a substitute for coal and yield good environmental and economic benefits, projects that use natural gas as a substitute for oil or liquefied petroleum gas, as well as new projects that employ natural gas as fuel ； (IV) Project for Replacing Industrial Boiler Fuel with Natural Gas in the Urban Core Area ； (5) Natural gas power generation projects other than those specified in items (vi), (vii) and (viii) of Article 6 and item (ii) of Article 7 ； (VI) Natural gas hydrogen production projects to support hydrogenation units in refineries and chemical enterprises, as well as those used in steel cold rolling. Article 10: Improve the natural gas recovery rate and strengthen the recovery of industrial emissions. Strictly control waste from emptying. Natural gas with a high carbon dioxide content (over 20% CO2) can be comprehensively developed and utilized based on its characteristics. Accelerate the localization of technologies and equipment related to natural gas utilization projects, and encourage the use of advanced processes, technologies, and equipment. Enhance the utilization of cold energy from liquefied natural gas. Article 11: New natural gas utilization projects must secure a gas supply source, enter into a gas purchase agreement or contract with the gas supply company, and ensure that the project layout is coordinated with pipeline network plans ； The parties involved in gas supply for projects that have already consumed gas must implement contractual safeguards. Article 12: For natural gas utilization projects that violate the provisions of Article 7 of these measures by carrying out new construction or expanding existing production capacity in sectors where such use is restricted, the competent authorities in charge of such projects shall not approve (authorize) them. They shall also ensure coordination with the record-keeping system; if it is found that a registered project falls under the aforementioned circumstances, the relevant enterprises shall be informed promptly so that they can make corrections ； What has been implemented should be stopped. Article 13: Those who violate the provisions of Article 8 of these measures and fail to take measures to phase out the use of gas in prohibited sectors shall not be granted gas supply guarantees. Article 14: Enterprises and entities operating in the field of natural gas utilization that engage in fraud, misguidance, or deception, and that cause serious harm to **interests or public interests, or infringe upon the legitimate rights and interests of citizens, legal persons, or other organizations, shall be held legally accountable; those whose actions constitute a crime shall be subject to criminal prosecution in accordance with the law. If public officials abuse their powers, solicit or accept bribes, fail to perform or improperly perform their duties in the course of handling matters related to natural gas utilization, thereby causing adverse consequences or impacts, they shall be dealt with in accordance with the relevant laws regarding disciplinary actions against public officials ； If a crime is constituted, criminal liability shall be pursued in accordance with the law. Article 15 These measures shall be interpreted by the **Development and Reform Commission** and the **Energy Bureau**. Provinces (autonomous regions, municipalities directly under the Central Government) may formulate relevant implementation measures within the scope stipulated by these regulations, in light of local conditions, and submit them to the **Development and Reform Commission** and the **Energy Bureau**. Article 16 These measures shall come into force as of August 1, 2024. **The \"Natural Gas Utilization Policy\" issued by the Development and Reform Commission on October 14, 2012 (**Order No. 15 of the Development and Reform Commission**) is also repealed simultaneously.