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
The UK government may have broken the law by approving the transfer of two deep-sea mining licences for exploration of mineral-rich seabed in the Pacific Ocean to an “opaque” company with ties to a US lobby group, according to Greenpeace.
The campaign group has taken the first step to kick-start a legal challenge over the government’s decision to facilitate the transfer of the permits it sponsors in the Clarion Clipperton Zone to Glomar Minerals following the bankruptcy of their previous holder, a Norwegian firm called Loke Marine Minerals.
The licences, overseen by the International Seabed Authority (ISA), a UN body, grant exclusive rights to explore an area of the ocean larger than England for potato-sized polymetallic nodules. These nodules contain minerals such as copper, cobalt and nickel, which are used in both clean energy technologies and defence applications.
No extraction can take place in the Clarion Clipperton Zone until countries agree on a mining code under drawn-out and increasingly contentious ISA negotiations.
Polarised debate
The debate over the nascent industry has grown increasingly polarised since US President Donald Trump issued an executive order to fast-track deep sea mining, including in international waters – a move widely seen as an unilateral measure aimed at circumventing the ISA’s authority.
Marine scientists argue that mining the seabed could cause severe, and likely irreversible, damage to ecosystems by destroying habitats, releasing toxic plumes and creating noise pollution. Over a dozen countries, including the UK, have called for a moratorium on deep sea mining until there is enough scientific evidence to assess its impact.
Greenpeace said the UK government’s sponsorship of the exploration licences now held by Glomar Minerals “flies in the face” of its public position on the practice.
In a letter warning Britain’s business secretary of upcoming legal action if its decision is not reviewed, the environmental group said the government had acted unlawfully by failing to consider cancelling the licences. It argued that Glomar Minerals is effectively controlled by foreign states or nationals, which it claims breaches ISA rules.
The ISA regulations say activities in a license area should be carried out by people or companies that possess the nationality of the country sponsoring the contract, or are effectively controlled by them or their nationals, without giving more specific details. If entities from different states are involved, then each state needs to sponsor the license, according to the rules.
Ties to DC lobby group
Glomar Minerals assumed control of the licences last year after acquiring Loke’s British subsidiary, UK Seabed Resources, which first secured the contracts in 2013 when it was owned by US weapons manufacturer Lockheed Martin.
Although Glomar Minerals is headquartered in the UK, the company appears to be largely managed by executives and investors based overseas. Its chief executive is Walter Sognnes, a Norwegian energy executive who also led Loke at the time the company filed for bankruptcy.
One of Glomar’s listed directors and principal controllers is Washington-based Raphael Diamond, the founder and executive chairman of Securing America’s Future Energy (SAFE), a US lobby group that brings together military and business leaders. SAFE advocates reducing reliance on foreign supply chains, including for critical minerals, on national security grounds.
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In April 2025, SAFE publicly welcomed Trump’s executive order on deep sea mining, saying “we must make sure we don’t cede access [of seabed nodules] to our adversaries”. In a recent report, the group argued that “the United States should out-compete China to be the first nation in the world to commercialise deep-seabed minerals”.
The US is not a full member of the ISA as it never ratified the UN convention that underpins it and therefore cannot directly sponsor ISA contracts.
“Opaque” ownership
Greenpeace has raised concerns about what it describes as Glomar’s “opaque” corporate structure and funding arrangements. Incorporation documents list the company’s majority shareholder as a firm based in Delaware, a US state known for corporate secrecy laws that do not require public disclosure of owners or directors.
Company filings show that in June last year, Glomar entered into a loan agreement for an undisclosed sum with another Delaware-registered entity, MHG Funding. Under the terms of the agreement, the lender could gain sweeping control of Glomar’s assets, including “all licences”, in the event of a default.
The lender is listed as Louis Mayberg, an American financial investor and philanthropist. A donor to the Democratic Party, Mayberg funded SAFE and served on the group’s board until at least the end of 2024, according to the most recent available records.
Climate Home News had not received a response to questions sent to Glomar, SAFE and Louis Mayberg at the time of publication.
In a December press release announcing the UK government’s decision, Glomar said its priority “remains closing knowledge gaps and contributing to a robust scientific understanding of the deep sea environment”.
US permitting process fast-tracked
As governments vie to secure access to critical minerals, the race to mine the ocean seabed has been heating up, spurred on by the Trump administration and efforts by countries to break their dependence on China.
Japan said this week it had conducted the first test mission to lift seabed mud within its national waters that is rich in rare earths to a scientific ship, soon after China cut off exports to its Asian rival amid a diplomatic row.
Last month, The Metals Company (TMC) – another deep-sea mining hopeful that holds exploration licences under the ISA, which it obtained via Nauru – became the first company to seek approval to collect nodules in the Clarion Clipperton Zone from the US authorities under an accelerated process run by the National Oceanic and Atmospheric Administration (NOAA).
The company’s CEO Gerard Barron told Reuters he hopes to obtain the permit by the end of the year.
The ISA has repeatedly said it has an exclusive mandate to oversee activities in the Pacific Ocean area and any unilateral action would violate international law and undermine ocean governance.
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Greenpeace worries that licences ending up in “the wrong hands” could open the door to “destructive deep sea mining that could harm marine wildlife”.
Erica Finnie, oceans campaigner at Greenpeace UK, said the “opaque structure” of Glomar makes it hard for the UK government to have full oversight of the exploration licences and the individuals involved.
“The licences should be held by independent scientific bodies with a genuine interest in doing research, as they are in other countries, instead of companies seeking to profit from mining the seabed,” she added.
A spokesperson for the UK’s Department for Business and Trade said it would not comment on ongoing legal proceedings.
The post UK government faces legal challenge over deep sea mining permits to “opaque” firm appeared first on Climate Home News.
UK government faces legal challenge over deep sea mining permits to “opaque” firm
Lawmakers in Ghana are weighing up whether to greenlight one of Africa’s largest lithium mines after civil society groups urged them to do more to ensure that the project benefits the country and supports green development.
Ghana granted Australian miner Atlantic Lithium a lease to open the country’s first lithium mine in the hope of capitalising on the EV-driven boom for the silvery metal, which is used to manufacture batteries for electric cars and other clean tech products.
But as the deal awaited ratification by parliament in December, the government withdrew the agreement after campaigners and analysts in Ghana warned that the terms risked shortchanging the West African nation at a time when it is seeking to benefit from the scramble for battery minerals.
Atlantic Lithium, which had earlier raised concerns that falling lithium prices were affecting the viability of the project, has since put forward a revised agreement. This new deal would see it pay higher royalties to the government when lithium prices rise, as they have since the start of this year. Lawmakers are expected to review the new terms of the contract for the much-delayed project this month.
Like other resource-rich African nations, Ghana, the continent’s largest gold producer, is seeking a bigger share of mining revenues to spur development and benefit local people.
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Experts told Climate Home News the negotiations with Atlantic Lithium highlighted the difficulties for governments to negotiate preferential terms with mining companies, on which they depend for revenues and expertise.
“Lithium is Ghana’s first green mineral and will set the benchmark for future critical mineral agreements,” opposition lawmaker Kwaku Ampratwum-Sarpong, a member of the committee on lands and natural resources, told local media in December. “Weak deals now risk setting a poor precedent for the country.”
Ghana’s lithium potential
Atlantic Lithium says the Ewoyaa project could produce 3.6 million tonnes of lithium spodumene concentrates over the mine’s 12-year lifespan – turning Ghana into one of Africa’s top lithium producers and a significant new supply source for the EV battery industry outside of established producers in Australia, Chile and China.
The lithium is expected to be exported to the US and further refined for use in EV batteries. Atlantic Lithium financed the exploration of the mining site by forward-selling Ghana’s lithium resources to Elevra, a North American lithium producer which has a supply agreement with Tesla.
Atlantic Lithium previously obtained a concession to cut the royalty rate it would pay Ghana from the mandated 10% to 5%. The company argued that the adjustment was necessary to make the project viable after lithium prices had plummeted by more than 80% since 2023.
The company’s move sparked a public outcry. Policy think-tanks that analysed the agreement described it as “colonial” and warned that parliament risked “repeating history’s mistakes” if it approved the deal. The Natural Resource Governance Institute challenged Atlantic Lithium’s claims about its revised profitability and urged the government to scrutinise the assumptions made by the company.
In light of the criticism, the government withdrew the deal in December.
“When governments depend on mining projects to project a sense of economic progress, they stop negotiating for value and start negotiating out of fear,” Bright Simons, of the Accra-based IMANI Centre for Policy and Education, told Climate Home News.
A balancing act
Atlantic Lithium has since put forward a revised agreement based on a proposal by the minister for lands and natural resources, Emmanuel Armah-Kofi Buah, to establish a sliding scale for royalty rates based on lithium prices.
The scale would start at 5% when lithium spodumene prices are below $1,500 per tonne and rise to 12% when prices exceed $3,000 per tonne. Lithium prices are currently at a two-year high and climbed above $2,000 at the start of the year, as analysts forecast stronger demand growth.
Henry Wilkinson, Atlantic Lithium’s communications manager, told Climate Home News the revised agreement was aligned with current legislation and would “ensure that value is generated for Ghana and Ghanaians”.
The government, he said, should find “the appropriate balance” between attracting foreign investment and retaining value from its nascent lithium industry.
“If the government sets fiscal terms that are deemed unattractive for companies looking to advance projects in Ghana, the country risks missing out on securing a position within the value chain; particularly with other countries, such as Mali, Zimbabwe, Nigeria and South Africa all moving ahead with their lithium production ambitions,” he added.
Fear of missing out
But this new approach hasn’t convinced everyone. For Simons, of the IMANI think-tank, the revised agreement still falls short of Ghana’s interests.
“African youth are tired of being told all the time that Africa is rich underground when the signs of destitution are so stark above ground,” he told Climate Home News.
“The narrative that the critical minerals rush is about building the next phase of the global economy has created a massive new wave of anxiety that the continent will miss out yet again. It feels like [a] determined betrayal.”
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Atlantic Lithium will allocate 1% of the project’s revenues to a community fund that will finance development projects in the local area. But the protracted negotiations have left people living near the mining site in limbo.
Farming communities say Atlantic Lithium told them to stop planting crops three years ago because they would need to be resettled ahead of the mine opening. While they await a decision on the mine, no one has yet received compensation for the loss of earnings, the Ghanaian NGO Friends of the Nation told Climate Home News. The community representatives in the negotiations with Atlantic Lithium receive stipends from the company, the NGO added, which it says poses a conflict of interest.
Atlantic Lithium said that the delays have been “beyond the company’s control”.
Unequal bargaining power
For Marisa Lourenço, a South Africa-based risk consultant, African governments are too reliant on foreign expertise for extracting their mineral resources and this often limits their bargaining power.
“The broad absence of local beneficiation means that African governments can do very little with their resources and this keeps them reliant on the terms put forward by foreign mining companies,” she said.
In Ghana, the mining industry is the largest tax-paying sector in the country. And the initial agreement to develop the Ewoyaa mine was based on a feasibility study carried out by Atlantic Lithium, said Patrick Stephenson, Ghana country manager at the Natural Resource Governance Institute.
Stephenson told Climate Home News that delays to the ratification of the project’s mining lease show that the government needs to rely on its own data and analysis to inform decisions “rather than on company-determined interests and priorities”.
That could include the creation of a state‑led minerals analytical unit capable of conducting its own profitability modelling, price benchmarking, feasibility studies and project valuation, he added.
The post West Africa’s first lithium mine awaits go-ahead as Ghana seeks better deal appeared first on Climate Home News.
West Africa’s first lithium mine awaits go-ahead as Ghana seeks better deal
Proposals to build coal-fired plants in China reached a record high in 2025, finds a new study.
The report, released by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM), says that, in 2025, developers submitted new or reactivated proposals to build a total of 161 gigawatts (GW) of new coal-fired power plants.
The new proposals come even as China’s buildout of renewable energy pushed down coal-power generation and carbon dioxide (CO2) emissions in 2025, meaning many coal plants are already running at just half of their maximum capacity.
The co-authors argue that while clean-energy growth may limit emissions from coal power in the short term, the surge in proposals could lock in new coal assets, “weaken…incentives” for power-system reform and help keep coal capacity online in spite of China’s climate goals.
The high rate of new proposals, the study says, likely reflects a “rush by the coal industry stakeholders” to develop projects before an expected tightening of climate policy in the next five years.
In addition, “misaligned” payment mechanisms are encouraging developers to propose large-scale coal units, which – if developed – could impact the transition of the coal sector from playing the central role in electricity generation to flexibly supporting a system built on clean power.
Significant additions pushing down running hours
The report finds that the amount of new coal-fired power proposals by Chinese developers, including reactivated applications, hit a new peak in 2025, at 161GW. This is equal to 13% of the coal capacity currently online in China.
The country is continuing to add significant coal-power capacity, with a record 95GW added to the grid last year and another 291GW in the pipeline – meaning units that have been proposed, are actively under construction or have already been permitted.
Moreover, around two-thirds of coal-power capacity proposed in China since 2014 has either been commissioned – meaning it has been completed and started operating – or remains in the pipeline, Christine Shearer, report co-author and research analyst at thinktank Global Energy Monitor, tells Carbon Brief.
She adds that this is the “reverse of what we see outside China, where roughly two-thirds of proposed coal capacity never makes it to construction”.
Coal remains a significant part of China’s power mix, making the nation’s electricity sector one of the world’s largest emitters. Indeed, the power sector emitted more than 5.6bn tonnes of carbon dioxide (GtCO2) in 2024 – meaning that if it were its own country, it would have the highest emissions of any country except China itself.
But emissions from the power sector have been flat or falling since March 2024, according to analysis for Carbon Brief by CREA lead analyst Lauri Myllyvirta.
This is largely due to China’s rapid installation of renewable power, which is covering nearly all of new electricity demand and pushing coal generation into decline in 2025.
Some parts of the coal-power pipeline are reflecting this shift. In 2025, construction began on 83GW of new coal capacity – down from 98GW in 2024.
In addition, new permitting fell to a four-year low, at 45GW, which could point to tighter controls on coal-plant approvals in the future, says the report.
The chart below shows the amount of new coal-power capacity being proposed in China each year, in GW.
The shift from new power demand being met by coal to being met by renewable energy means any “additional coal power capacity would face structurally low utilisation”, the report says, referring to the number of hours that plants are able to operate each year.
This reduces coal-plant earnings needed to cover the cost of investment and makes instances of “stranded [coal] assets and compensation pressures” more likely.
A previous analysis for Carbon Brief finds that “larger additions of coal capacity are often followed by falling utilisation” – meaning that the construction of new coal plants does not necessarily increase emissions.
Utilisation rates for coal-fired power plants have hovered around 51% since 2025, according to the CREA and GEM report.
Shearer argues that while low utilisation rates would “dampen the immediate impact on annual CO2 emissions”, in the long-term the buildout “locks capital into fossil fuels” and “weakens incentives to build the cleaner forms of flexibility” needed for a renewables-centred system.
Low utilisation has also not led to coal plant capacity being retired in any notable way, the report notes, with generators instead supported by the coal “capacity payment” mechanism and extending the life of older units.
Delayed retirement of older coal plants causes “persistent overcapacity” and adds to calls for further compensation and policy support, the report says.
Coal generation has “no room to expand” under China’s international climate pledge for 2030, it adds, with utilisation rates for coal units likely to fall to 42% if renewables continue to meet all additional demand and if all of the plants currently under construction or permitted are brought online.
Crunch-time for coal
The surge in new proposals reflects a “rush” by the coal industry to ensure their projects are approved before the policy environment tightens, according to the report.
China is expected to introduce absolute emissions targets over the next five years. While these are expected to be aspirational for the first five years – alongside binding targets for carbon intensity, the emissions per unit of GDP – from 2030 they will be binding.
The current five-year period until 2030 will also likely see most of China’s energy-intensive industries pulled into the scope of its national carbon market.
In the power sector, government officials have said that coal is expected to shift from playing a major role in power supply to supporting “flexibility” operations.
This would require coal plants to shift between varying load levels and respond quickly to changes in demand and other system needs.
However, the report finds, the approvals for coal power “continue to reflect expectations of high operating hours”, instead of flexible operations.
For many of these proposals, planned annual utilisation was stated to be more than 4,800 hours, or 55% of hours in the year. This is greater than the 4,685 utilisation hours (53%) logged in 2023, the year in which the most coal power was generated over the past decade, according to data shared by the report authors with Carbon Brief.
In addition, the report says that many of the new coal-power proposals in 2025 were for “large-scale units”, each representing at least 1GW of power, as shown in the figure below.
These larger units are designed for “stable, continuous operation” and are “poorly suited to the type of flexibility increasingly required in a power system dominated by wind and solar”, says the report.
This suggests that “project developers still anticipated base-load style operation”, it adds, “sitting uneasily” with the fact of higher clean-energy generation and falling coal plant utilisation.
Reliance on sales and subsidies
This persistence in developing large-scale units could be explained by the financial incentives that govern the coal-power industry.
Coal power plants are cheap to build but risk low profits and high costs, with many current operators already facing losses at recent utilisation rates.
In 2024, the government established a capacity payment mechanism for coal-fired power plants. This mechanism rewards developers for adding “seldom-utilised, backup” capacity to the grid.
These capacity payments, as well as regulated pricing and implicit government backing “can make plants viable on paper even if utilisation and operating margins are weak”, Shearer tells Carbon Brief, which may explain the continued appetite for new coal from developers.
More than 100bn yuan ($14bn) in capacity payments were made to coal plants in 2024, although it has not yet had a discernable impact on utilisation.
Large-scale units, the report says, are “particularly well positioned” to benefit from the policy, as it rewards maximising capacity and does not favour plants that are more suited for flexible operations.
(The Chinese government recently announced plans to adjust the mechanism, confirming that in some cases capacity payments could be more than the initial expected threshold of 50% of a benchmark coal plant’s total fixed costs.)
Meanwhile, the report adds that coal-fired power plants continue to earn most of their revenue from selling electricity, with only 5% of total income coming from capacity payments.
As such, these “misaligned incentives” encourage producing power and installing significant new capacity, despite the government’s aim to shift coal to a supporting role in the system.
Shearer tells Carbon Brief that a better approach to flexibility would be to “adopt technology-neutral flexibility standards”, rather than focusing on “flexible coal”, which would mean coal would have to “compete directly with storage, demand response, grid upgrades and other clean options”. She adds:
“The risk of coal-specific flexibility policies is that they lock in capacity rather than solve the underlying system need.”
The post ‘Rush’ for new coal in China hits record high in 2025 as climate deadline looms appeared first on Carbon Brief.
‘Rush’ for new coal in China hits record high in 2025 as climate deadline looms
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