China’s Two Sessions: Implications for energy markets and policies

China's annual parliamentary meeting, known as the "Two Sessions", has provided insights into macroeconomic and energy policies for the upcoming year. The government is focusing on supporting new industries to achieve a 5% GDP growth target, despite facing challenges such as local government debt. Oil demand is expected to increase in 2024, driven by industrial activity and the use of middle distillates. Additionally, there is potential for growth in gas demand due to increased industrial activity and use of gas in power generation. The expansion of China's emissions trading system and rising carbon prices may have limited impact. Renewable curtailment rates are projected to increase, creating a potential drag on renewable energy dispatch. Mixed policy messages may lead to confusion at the local level, with softer environmental targets and the risk of last-minute efforts to meet goals by 2025.