China’s carbon dioxide (CO2) emissions are set to fall in 2024 and could be facing structural decline, due to record growth in the installation of new low-carbon energy sources.
The new analysis for Carbon Brief, based on official figures and commercial data, shows China’s CO2 emissions continuing to rebound from the nation’s “zero-Covid” period, rising by an estimated 4.7% year-on-year in the third quarter of 2023.
The strongest growth was in oil demand and other sectors that had been affected by pandemic policies, until the lifting of zero-Covid controls at the end of 2022.
Other key findings from the analysis include:
- China has been seeing a boom in manufacturing, which has offset a contraction in demand for carbon-intensive steel and cement due to the ongoing real-estate slump.
- The emissions rebound in 2023 has been accompanied by record installations of low-carbon electricity generating capacity, particularly wind and solar.
- Hydro generation is set to rebound from record lows due to drought in 2022-23.
- China’s economic recovery from Covid has been muted. To date, it has not repeated previous rounds of major infrastructure expansion after economic shocks.
- There has been a surge of investment in manufacturing capacity, particularly for low-carbon technologies, including solar, electric vehicles and batteries.
- This is creating an increasingly important interest group in China, which could affect the country’s approach to domestic and international climate politics.
- On the other hand, coal power capacity continues to expand, setting the scene for a showdown between the country’s traditional and newly emerging interest groups.
Taken together, these factors all but guarantee a decline in China’s CO2 emissions in 2024.
If coal interests fail to stall the expansion of China’s wind and solar capacity, then low-carbon energy growth would be sufficient to cover rising electricity demand beyond 2024. This would push fossil fuel use – and emissions – into an extended period of structural decline.
- Emissions are set to fall in 2024
- Why emissions grew in Q3 of 2023
- Coal expansion threatens China’s international commitments for 2025
- Solar, wind and hydropower set to surge in 2024
- Continued clean-power growth can peak emissions in 2024
- Why did clean energy investments surge during and after Covid?
- What comes next for China’s emissions peak and decline
- Data sources
Emissions are set to fall in 2024
China’s CO2 emissions have seen explosive growth over recent decades, pausing only for brief periods due to cyclical shocks.
Over the past 20 years, its annual emissions from fossil fuels and cement have climbed quickly almost every year – as shown in the figure below – interrupted only by the economic slowdown of 2015-16 and the impact of zero-Covid restrictions in 2022.
While CO2 is rebounding in 2023 from zero-Covid lows (see: Why emissions grew in Q3 of 2023), there have also been record additions of low-carbon capacity, setting up a surge in electricity generation next year. (See: Solar, wind and hydropower set to surge in 2024.)
Combined with a rebound in hydro output following a series of droughts, these record additions are all but guaranteed to push fossil-fuel electricity generation and CO2 emissions into decline in 2024, as shown in the figure below.
Year-on-year change in China’s annual CO2 emissions from fossil fuels and cement, million tonnes. Emissions are estimated from National Bureau of Statistics data on production of different fuels and cement, China Customs data on imports and exports and WIND Information data on changes in inventories, applying IPCC default emissions factors and annual emissions factors per tonne of cement production until 2019. Monthly values are scaled to annual data on fuel consumption in annual Statistical Communiques and National Bureau of Statistics annual Yearbooks. Chart by Carbon Brief.
Moreover, with the power sector being China’s second-largest emitter and with other major sectors, such as cement and steel, already seeing CO2 falling, this drop in power-sector emissions could drive a sustained, structural emissions decline for the country as a whole.
This is because – for the first time – the rate of low-carbon energy expansion is now sufficient to not only meet, but exceed the average annual increase in China’s demand for electricity overall. (See: Continued clean power growth can peak emissions in 2024.)
If this pace is maintained, or accelerated, it would mean that China’s electricity generation from fossil fuels would enter a period of structural decline – which would also be a first.
Moreover, this structural decline could come about despite the new wave of coal plant permitting and construction in the country. (See: Coal expansion threatens China’s international commitments for 2025.)
In addition, record additions of low-carbon energy deployment have been accompanied by rapid expansion in related manufacturing capacity. (See: Why did clean energy investments surge during and after Covid?)
This could create tension with traditional interests in the country’s coal industry, yet it also boosts the economic and political case for China to continue supporting low-carbon growth, both at home and abroad. (See: What comes next for China’s emissions peak and decline.)
Why emissions grew in Q3 of 2023
China’s CO2 emissions continued to rebound in the third quarter of 2023, increasing an estimated 4.7% year-on-year, but slowing to 1% in September.
This follows rapid growth in the first and second quarters of the year, after the same periods in 2022 had seen emissions decline by record amounts.
China’s quarterly CO2 emissions from energy use and cement production are shown in the figure below, with the third quarter of each year highlighted in red.
China’s quarterly CO2 emissions from fossil fuels and cement, million tonnes of CO2. Emissions are estimated from National Bureau of Statistics data on production of different fuels and cement, China Customs data on imports and exports and WIND Information data on changes in inventories, applying IPCC default emissions factors and annual emissions factors per tonne of cement production until 2019. Monthly values are scaled to annual data on fuel consumption in annual Statistical Communiques and National Bureau of Statistics annual Yearbooks. Chart by Carbon Brief.
The reasons for the emissions rebound this year are predictable. Most significantly and obviously, oil demand has risen from zero-Covid lows, following almost three years of pandemic controls.
Oil consumption is now approaching the pre-Covid trendline and does not yet show any sign of abating, increasing by an estimated 19% year-on-year in the third quarter. This is shown by the large light blue bar at the top of the figure below.
Electricity demand also rebounded from Covid lows in sectors that had been affected by pandemic controls, making power-sector coal use the second-largest driver of rising emissions in the third quarter of the year (the lowest grey bar).
The increase in power-sector demand happened almost entirely in July, before hydropower generation began to rebound from historic lows caused by low rains in 2022 and early 2023.
Annual change in quarterly CO2 emissions broken down by sector and fuel, millions of tonnes. Emissions are estimated from National Bureau of Statistics data on production of different fuels and cement, China Customs data on imports and exports and WIND Information data on changes in inventories, applying IPCC default emissions factors and annual emissions factors per tonne of cement production until 2019. Chart by Carbon Brief.
Coal use outside the power sector fell (grey chunks), due to a major drop in building materials driven by the ongoing contraction of real-estate construction and construction of associated infrastructure. This is also reflected in the drop for cement emissions (red).
Other uses of coal increased, particularly the use of coking coal (black chunks). The increase in coal use for steelmaking was larger than the increase in steel output, indicating a shift from electric arc to coal-based steel production.
Investment growth – for example, investment in electrical machinery manufacturing grew 38% year-on-year and investment in railways grew 22% – has supported demand for energy-intensive commodities, despite an ongoing contraction in real estate, generally the main user of metals.
Gas use continued to fall (dark blue), reflecting a drop in demand and a shift from gas to electricity and coal due to high prices.
Coal expansion threatens China’s international commitments for 2025
The pattern of economic growth in China, both during and after the Covid-19 pandemic, was highly energy- and carbon-intensive. This has put China off track against the CO2 and energy intensity targets – aimed at reducing CO2 and energy use per unit of GDP – that it promised in its updated climate pledge (nationally determined contribution, NDC) in 2021.
This would mark a departure from previous progress, with China having exceeded its energy and CO2 intensity targets during the 11th (2006-2010) and 12th (2011-2015) five-year plan periods, as shown in the figure below.
The slowdown in progress on energy intensity began already at the end of the 13th five-year plan period (2016-2020), resulting in that target being missed.
China’s progress on reducing energy and CO2 intensity of GDP compared to five-year plan targets, converted into required annual rates of progress. All previous targets since the 11th five-year plan (2006–11) have been met, but now progress has fallen short on both targets for three consecutive years. Source: Calculated from National Bureau of Statistics annual data on energy and GDP; 2022 calculated based on preliminary information released by the NBS. Figures for the latest five-year plan are shown as reported and as corrected for coal quality. Chart by Carbon Brief.
The coming surge of low-carbon energy would put the country on track for the CO2 intensity target, if similar levels are added next year.
The energy intensity target, in contrast, will not be met on current trends. Only a sharp shift to consumption-driven growth – which the government says it prefers, but has found the required measures hard to implement – could allow this target to be hit.
Permitting of new coal power plants continued, with at least another 25GW given the go-ahead in the third quarter, based on a compilation of permits reported by Polaris Network.
The resurgence of coal-plant construction contradicts a policy pledge that China’s president Xi Jinping personally announced. Xi pledged to “strictly control new coal-fired power generation projects” in China in 2021–25.
This pledge was made in the Leaders Summit on Climate in April 2021 and consequently added to China’s NDC, just months before the current wave in coal power plant permitting and construction began.
The State Council Development Research Center recently projected that China’s coal power capacity should peak at 1,370GW in 2030, up from 1,141GW at the end of June.
As 136GW was already under construction at the end of June, another 99GW had already been permitted, and a further 25GW has been permitted since, realising this projected peak would mean stopping new permits immediately.
Alternatively, retirements of existing capacity would have to be accelerated significantly, or some already permitted projects would have to be cancelled or shelved.
Solar, wind and hydropower set to surge in 2024
While emissions have climbed in 2023, it has also seen a historic expansion of low-carbon energy installations. The most striking growth has been in solar power, where expected installations in 2023 – some 210 gigawatts (GW) – are twice the total installed capacity of solar power in the US and four times what China added in 2020.
The newly installed solar, wind, hydro and nuclear capacity added in 2023 alone will generate an estimated 423 terawatt hours (TWh) per year, equal to the total electricity consumption of France.
About half of the solar panels added this year will be installed on rooftops, largely driven by China’s “whole county solar” model, where a single auction is carried out to cover a targeted share of the rooftops in a county with solar panels in one fell swoop.
Under this model, the developer negotiates with building owners and arranges contracts with the grid, financing, procurement, contracting and installations. This model – which could be described as centralised development of distributed solar – has enabled rooftop solar deployment at a vast scale.
The other half of solar installations are set to be in large utility-scale developments, particularly in the gigawatt-scale “clean energy bases” in western and northern China.
All in all, 210GW of solar, 70GW of wind, 7GW hydro and 3GW of nuclear are expected to be added in China this year. This is shown in the table below, along with expected electricity generation assuming newly added capacity performs in line with the existing fleet.
Expected capacity additions in 2023 and added annual generation
| Source | GW | Average utilisation | TWh |
|---|---|---|---|
| Solar | 210 | 13.6% | 251 |
| Wind | 65 | 23.0% | 130 |
| Nuclear | 3 | 83.4% | 21 |
| Hydro | 7 | 36.7% | 21 |
| Total | 284 | 17.0% | 423 |
In addition to the electricity generated by this newly added capacity, China is likely to see a large year-on-year increase in output from its massive hydropower fleet in 2024.
The utilisation of this fleet plumbed historical lows from August 2022 until July 2023, as a result of record droughts and heatwaves in summer 2022, followed by low rainfall into 2023.
The year-on-year drop in power generation was compounded as hydropower operators were conserving water in the spring and early summer of 2023, building up the water levels in their reservoirs for the peak demand season in August.
(This behaviour is clear in CREA analysis of hydropower generation data and water levels at 13 major hydropower reservoirs across China, reported by Wind Financial Terminal, showing water levels approaching historical highs while output remained low until July.)
This was in stark contrast with 2022, when spring and early summer had good rains and hydropower was generating at very high rates.
In addition to the electricity generated by this newly added capacity, China is likely to see a large year-on-year increase in output from its massive hydropower fleet in 2024.
The utilisation of this fleet plumbed historical lows from August 2022 until July 2023, as a result of record droughts and heatwaves in summer 2022, followed by low rainfall into 2023.
The year-on-year drop in power generation was compounded as hydropower operators were conserving water in the spring and early summer of 2023, building up the water levels in their reservoirs for the peak demand season in August.
(This behaviour is clear in CREA analysis of hydropower generation data and water levels at 13 major hydropower reservoirs across China, reported by Wind Financial Terminal, showing water levels approaching historical highs while output remained low until July.)
This was in stark contrast with 2022, when spring and early summer had good rains and hydropower was generating at very high rates.
In China’s rigidly regulated power system, hydropower operators do not have an economic incentive to time their output to the peak demand season. However, after the electricity shortages of summer 2022, administrative intervention appears to have replaced economic incentives and compelled generators to ensure high reservoir levels.
Now water levels in reservoirs have climbed up to or above their seasonal averages, based on data from Wind Financial Terminal. Long-term weather forecasts point to above-average rains lasting until February, the end of the forecast period, consistent with predictions for the current El Nino.
If these forecasts hold out, hydropower utilisation will not only recover but come in above historical averages in 2024. Meanwhile, another 29GW of hydropower has been added from the beginning of 2022 to September 2023, marking a 7% increase in capacity.
The hydropower generation rebound had already begun in August-September and will continue through this year. However, electricity demand growth at the end of last year was very weak due to strict Covid lockdowns, so emissions are unlikely to fall year-on-year.
Total CO2 emissions fell 4% from the last quarter of 2020 to the last quarter of 2022, setting up a very low base of comparison for the last quarter of this year.
Continued clean-power growth can peak emissions in 2024
Given the low-carbon electricity capacity already installed this year – and the outlook for hydropower generation – a drop in power-sector emissions in 2024 is essentially locked in, barring a major acceleration in electricity demand growth.
From 2025 onwards, the development of power-sector emissions depends on whether low-carbon energy additions are maintained or accelerated.
Looking at the added annual generation from low-carbon energy installations in 2023, the total comes out to more than the average annual increase in China’s power demand, for the first time, marking a potential inflection point.
At this point, the growth of low-carbon electricity (columns in the chart below) would outweigh the overall growth of electricity demand (dots). As a result, the amount of electricity generated using fossil fuels – and the associated emissions – would decline.
Columns: Annual increase in expected electricity generation from new low-carbon installations, terawatt hours, broken down by source. Dots: Annual increase in electricity demand overall. Dashed line: Average increase in demand during 2010-2023. Figures for 2023 are forecast. Data sources: China Electricity Council (CEC) and Ember, with 2023 capacity additions from CEC and Bloomberg. Chart by Carbon Brief.
As long as low-carbon energy installations are maintained at the projected 2023 level, the growth in low-carbon power generation would enable China to peak and decline coal use in the power sector imminently, with 2023 remaining the peak year.
How will power-sector emissions develop if the 2023 level of low-carbon energy additions is maintained?
A simple projection – assuming that electricity demand follows its historical trend of rising 5% per year and hydropower utilisation returns to historical averages – points to a significant drop in fossil fuel-based (thermal) power generation in the spring and summer of 2024, shown by the bottom left segment in the chart below, and zero growth thereafter.
If China’s current and expected economic slowdown results in slower electricity demand growth – or non-fossil energy additions accelerate further – power generation from fossil fuels will continue to fall, rather than stabilise.
Under these assumptions, hydropower generation would see steep increases already in October 2023 – January 2024, but power generation from fossil fuels still climbs year-on-year, due to the low base set under the zero-Covid policy.
A return to average demand growth rates after the post-Covid rebound, (top left), continued strong growth in solar (centre right) and wind (centre left) output, combined with rebounding hydropower output (bottom right), would push fossil-fuel power generation down from February 2024 onwards (bottom left). This would mean fossil fuel-fired electricity generation falling 3% in 2024 and remaining at similarly reduced levels in 2025.
Past and projected future year-on-year changes in monthly electricity generation, %. Top left to bottom right: Overall electricity demand; nuclear; wind; solar; thermal (coal and gas); and hydro generation. Data sources: China Electricity Council (CEC) and Ember, with 2023 capacity additions from CEC and Bloomberg. Chart by Carbon Brief.
Moreover, rapid electrification has meant that almost all of the recent growth in China’s CO2 emissions has taken place in the power sector.
Therefore, when power-sector emissions peak, total emissions are likely to follow, as falling coal use outside the power sector balances out increases in oil and possibly gas demand, which are also mitigated by electrification.
Why did clean energy investments surge during and after Covid?
China’s output of solar cells is set to exceed 600GW this year, up from 375GW last year and enough to produce 500GW of solar panels. For comparison, only 240GW of panels were installed globally last year.
The output of batteries in China will reach 800 gigawatt hours (GWh), up from 550GWh last year and enough to power 20m electric vehicles (EVs).
Electric vehicle output exceeded 8m units over the 12 months to September, representing more than 30% of all vehicles produced in China. The share of EVs in all vehicles sold in China is also on track to reach 30% in 2023, while production for the calendar year is set to reach 9m vehicles.
This is only the beginning of the industry’s expansion plans. By 2025, solar-panel production capacity is expected to break 1,000GW (1 terawatt, TW), and battery production capacity to reach 3,000GWh.
What is causing this surge?
The announcement of the 2060 carbon neutrality target provided the political signal, but wider macroeconomic conditions have delivered low-carbon capacity growth far in excess of policymakers’ targets and expectations, with this year’s solar and wind installation target met by September and the market share of EVs already well ahead of the 20% target for 2025.
The clampdown on the highly leveraged real-estate sector, starting in 2020, led to a steep drop in the demand for land, commodities, labour and credit for apartments and associated infrastructure. This left a hole in the finances of local governments – which rely on land sales for a lot of their revenue – and hit economic growth rates.
Local governments were, thus, searching for alternative investment opportunities to drive economic growth. Yet, at the same time, their investment spending was under scrutiny due to debt concerns. China’s high-level environmental and industrial policy goals made cleantech one of the acceptable sectors for their investment.
At the same time, the government made it easier for private-sector companies to raise money on the financial markets and from banks, as part of measures to stimulate the economy during the pandemic.
The low-carbon energy sector, in contrast with the fossil fuel and traditional heavy industries, is largely made up of private companies. Access to credit had earlier been a major bottleneck for them in a financial system that has heavily favoured state-owned firms.
As a result, much of the bank lending and investment that previously went into real estate is now flowing to manufacturing – largely cleantech manufacturing – as well as to cleantech deployment.
Local government enthusiasm for attracting investments to their regions meant that they often also offered major direct or indirect subsidies. Reportedly, it is common for local governments to build an entire factory and associated infrastructure, with the private company going on to occupy the site only covering the cost of machinery and operations.
All of this happened at a time when falling costs driven by technological learning and subsidies resulted in many low-carbon energy technologies becoming economically competitive against fossil fuels.
China’s policymakers had favoured “green” investments previously, as in the 2009 stimulus package launched in response to the global financial crisis. Yet the sector had been too small to absorb the huge amount of credit mobilised as a part of China’s stimulus cycles. After experiencing extremely rapid growth since 2020, this has changed.
The construction of low-carbon energy manufacturing capacity, production of low-carbon energy equipment and construction of railways have been significant drivers of commodity demand this year, as the only areas of investment showing substantial growth.
This demand explains, among other things, why China’s steel output has continued to grow despite the ongoing contraction in real-estate construction.
Conversely, the precipitous drop in demand for commodities from the real estate and conventional infrastructure sectors explains why the breakneck expansion of low-carbon energy sectors – and their commodity demand – has not resulted in a spike in prices.
The unprecedented investment in low-carbon technology manufacturing supply chains also means that China has, in effect, placed a major economic and financial bet on the success of the global energy transition, which could affect its diplomatic positioning.
What comes next for China’s emissions peak and decline
Now that low-carbon energy expansion has reached the scale needed to start driving down China’s emissions, the most important question is: will its growth continue?
China’s low-carbon energy boom resulted from the confluence of numerous factors. There was – and is – clear political commitment and direction. The contraction of the real-estate market provided a push and an opportunity for the redirection of capital and investments into the renewable energy sector.
Technological learning and aggressive industrial policy improved quality and cut costs to the point where the market for low-carbon energy technologies started to expand rapidly.
It is also clear that the wave of manufacturing investment has resulted in significant overcapacity in the production of solar panels, batteries and EVs, among others, though the scale of this excess depends on the pace of the global energy transition.
This overcapacity is likely to be resolved – as in previous rounds of expansion – through consolidations and outright failures of individual players. Meanwhile, however, it will continue to depress the prices of low-carbon energy equipment.
Politically, the major challenge will only come when low-carbon energy begins to substantially cut into the demand for coal and coal-fired power.
This shift threatens the interests of the coal industry and local governments with a high exposure to the coal sector. These stakeholders could be expected to resist the transition, raising concerns about potential roadblocks.
When contraction in demand and capacity additions resulted in overcapacity in coal-fired power around 2015, coal power interests successfully argued that low-carbon energy deployment had been too fast.
As a result, the rate of low-carbon energy capacity additions slid down from 2015 until 2019, as seen in the figure above, making more space for excess coal capacity to generate power.
A similar balancing act could come into play once again, as coal and low-carbon generating capacity both continue to expand, competing to meet limited rises in demand.
The Chinese government and its advisers have argued that new coal power plants will not result in a surge in emissions, as they will be used for flexible operation at low utilisation.
China’s climate targets do not yet reflect this belief, however. Its combination of intensity and low-carbon deployment targets would allow emissions to increase by another 10-15% from 2022 levels and only peak at the end of this decade.
If the government wanted to more firmly cement the low utilisation of newly built coal plants, it could do so by moving towards an absolute cap on power-sector emissions under its emissions trading system – or by setting a limit on China’s total CO2 emissions.
As the government weighs these decisions, it is faced with a dramatically larger set of economic drivers and interests in the low-carbon energy sector, as compared with 2015.
These conditions could offer the motivation for policymakers to push a faster domestic transition away from fossil fuels. They also mean that China has an increasingly significant financial stake in the success of the low-carbon transition worldwide.
Data sources
Data for the analysis was compiled from the National Bureau of Statistics of China, National Energy Administration of China, China Electricity Council and China Customs official data releases, and from WIND Information, an industry data provider.
Power sector coal consumption was projected based on power generation, to avoid the issue with official coal consumption numbers affecting 2022–23 data. September 2023 data on apparent coal consumption was not available at the time of publication, so coal consumption in different sectors was projected based on the output of relevant industrial products – for example, coke for the consumption of coking coal; cement and glass for building materials industry. Coal consumption for heating was projected based on population-weighted average heating degree days calculated from NCEP gridded daily weather data.
When data was available from multiple sources, different sources were cross-referenced and official sources used when possible, adjusting total consumption to match the consumption growth and changes in the energy mix reported by the National Bureau of Statistics.
CO2 emissions estimates are based on National Bureau of Statistics default calorific values of fuels and IPCC default emissions factors. Cement CO2 emissions factor is based on 2018 data.
For oil consumption, apparent consumption is calculated from refinery throughput, with net exports of oil products subtracted.
The post Analysis: China’s emissions set to fall in 2024 after record growth in clean energy appeared first on Carbon Brief.
Analysis: China’s emissions set to fall in 2024 after record growth in clean energy
New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.
The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.
Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.
“Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.
Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.
South Africa’s top court blocks Shell’s offshore oil exploration right
Constitutional Court rules that Shell and its partners failed to consult affected communities and did not properly consider environmental risksPeruvian farmer loses climate case against RWE – but paves way for future action
Experts say that despite dismissing the lawsuit, the ruling sets a precedent by confirming that climate science can establish legal liability for the damage caused by emissions
Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.
Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.
In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.
Corporate lobbying in the shadows
Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.
“That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”
The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.
The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.
Green groups fail to stop bill
The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.
But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.
A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.
“Pathetic”: New Zealand plans to barely cut emissions between 2030 and 2035
Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.
But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.
The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.
Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”
Copycat legislation on the rise
New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.
In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.
The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.
UN General Assembly backs “climate obligations” set by world’s top court
Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.
“Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.
The post New Zealand moves to protect business with law curtailing climate litigation appeared first on Climate Home News.
New Zealand moves to protect business with law curtailing climate litigation
Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS.
Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.
Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.
The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.
The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.
Restricting Indonesia’s nickel output
Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.
Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.
-
Big banks’ lending to coal backers undermines Indonesia’s green plans
Foreign banks involved in Indonesia’s $20-billion Just Energy Transition Partnership have also funded companies working on coal power expansion, a TBIJ and Climate Home News investigation reveals -
Southeast Asia’s fragile grids threaten billions in clean energy investment
Renewables developers need reliable electricity infrastructure and stable policies to help the region meet climate goals and surging demand for power
Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.
Stronger environmental enforcement
Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.
This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.
The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.
The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.
In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.
None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.
Unequal benefits
For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.
Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.
-
Nickel mining for electric vehicles is destroying lives in Indonesia
Indonesia’s abundant nickel reserves are crucial for a low carbon world. But extracting them is ruining local peoples’ lives and causing rampant deforestation -
Indonesia turns traditional Indigenous land into nickel industrial zone
Indonesia supplies the EV industry with critical battery materials but the sector’s rapid expansion is infringing the rights of Indigenous peoples -
Indonesia’s failing Just Energy Transition Partnership is a cautionary tale
The government has abandoned its plan to shut down a major coal plant, which was a key part of the deal, raising doubts about the donor-backed approach
In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.
Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.
The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.
None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.
The post Indonesia’s nickel production cuts are not enough to create a sustainable industry appeared first on Climate Home News.
Indonesia’s nickel production cuts are not enough to create a sustainable industry
Climate Change
Risk of “catastrophic” oil spill reaching Kimberley coast found in Woodside’s Scott Reef gas drilling plans
SYDNEY, Monday 24 August 2026 – New analysis of Woodside modelling released by Greenpeace Australia Pacific and Environs Kimberley has revealed the oil and gas corporation’s plans to drill at Scott Reef could cause an oil spill up to 30 times bigger than the 2009 Montara disaster, impacting the Kimberley coastline and reaching as far as Indonesia.
The new analysis details the “catastrophic” oil spill risk put to environmental regulators for approval by Woodside in its Browse to North West Shelf Project (Browse) plans, the worst-case scenario being a blowout directly below Scott Reef, polluting whale migratory pathways and covering isolated turtle nesting ground with oil condensate.
An FOI application (F348) revealed the federal environment department (DCCEEW) asked offshore oil and gas regulator NOPSEMA to look into the oil spill risk in 2025. NOPSEMA’s response to the application refused access to its report, and one document shows DCCEEW sought further advice this year.
Greenpeace and Environs Kimberley are calling on the Federal Government to publicly release the NOPSEMA report given the risk of an uncontrolled release of oil condensate from directly below Scott Reef.
Hannah Schuch, Senior Campaigner at Greenpeace Australia Pacific, said: “Woodside is aware that drilling at Scott Reef risks a massive oil spill that would have severe, far-reaching consequences. It appears environmental regulators are aware too.
“The state and federal governments need to take this risk from Woodside’s drilling plans seriously, as they could end up allowing the worst oil spill in Australian history.
“The pygmy blue whales that migrate up and down the WA coast with their newborns each year could be swimming and feeding in toxic, oil-slicked water. Woodside’s proposal to drill at Scott Reef is an environmental disaster waiting to happen, and the WA and federal governments have one surefire way to prevent catastrophe — reject Browse.”
Martin Prichard, Executive Director at Environs Kimberley, said: “A catastrophic oil spill by Woodside would be disastrous not just for marine life in the area but also for the Kimberley’s $500 million tourism industry.
“The state and federal governments will see five marine parks on the Kimberley coast included in the risk area of a catastrophic Woodside oil spill.
“The Montara oil spill was disastrous for West Timor with the toxic oil destroying seaweed farmers’ livelihoods. The Kimberley dodged a bullet with Montara, we were lucky the spill didn’t head our way. Myself and a crew flew over the Montara oil spill and followed it as far as we could. It was like a scene from a disaster movie.”
After the WA Environmental Protection Authority deemed Browse “unacceptable” due, in part, to oil spill risk, Woodside submitted a mitigation plan based on technology that has never been used “in anger”, a weakness stated in an independent expert review of the plan.
Professor Richard Steiner, independent oil spill expert, said: “A large offshore spill is impossible to effectively contain or recover. Historically, only 2-6% of total spill volume is recovered and the ecological injury from the release of toxic hydrocarbons in the sea can be severe, extensive, and long-term.
“Here in Alaska, government research concludes that several marine populations injured by the 1989 Exxon Valdez oil spill, including whales, fish, and seabirds, are still not recovering today, 37 years later. We should expect similar long-term ecological impacts in Western Australia if there were to be a major oil spill. The only sure way to avoid the risk of a catastrophic marine oil spill is to not develop oil and gas projects in marine environments.”
-ENDS-
Media contact
Emma Sangalli on emma.sangalli@greenpeace.org or 0431 513 465
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Renewable Energy10 months agoSending Progressive Philanthropist George Soros to Prison?
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits