China’s energy sector carbon dioxide (CO2) emissions increased 5.2% in 2023, meaning a record fall of 4-6% is needed by 2025 to meet the government’s “carbon intensity” target.
The new analysis for Carbon Brief, based on official figures and commercial data, shows rapid electricity demand growth and weak rains boosted demand for coal power in 2023, while the rebound from zero-Covid boosted demand for oil.
Other key findings from the analysis include:
- China’s CO2 emissions have now increased by 12% between 2020 and 2023, after a highly energy- and carbon-intensive response to the Covid-19 pandemic.
- This means CO2 emissions would need to fall by 4-6% by 2025, in order to meet the target of cutting China’s carbon intensity – its CO2 emissions per unit of economic output – by 18% during the 14th five-year plan period.
- China is also at risk of missing all of its other key climate targets for 2025, including pledges to “strictly limit” coal demand growth and “strictly control” new coal power capacity, as well as targets for energy intensity, the share of low-carbon energy in overall demand and the share of renewables in energy demand growth.
- Government pressure to hit the targets, most of which are in China’s updated international climate pledge under the Paris Agreement, makes it more likely that China’s CO2 emissions will peak before 2025 – far earlier than its target of peaking “before 2030”.
The deadline for peaking CO2 emissions has led officials and industries to pursue rapid emissions growth and carbon-intensive projects, while a window to do so remains open.
The government recently recognised and responded to the gap to meeting its targets, by calling for stronger controls on such projects, as well as faster renewables deployment.
Most of China’s climate targets can be met if the acceleration of clean energy deployment during 2023 is maintained – and if energy demand growth returns to pre-Covid levels.
- China’s CO2 emissions continued to increase in 2023
- China is off track to all of its 2025 climate targets
- Official energy data is over-reporting coal consumption growth
- Government response
- The clean energy boom can allow most targets to be met
- About the data
China’s CO2 emissions continued to increase in 2023
According to preliminary official data, China’s total energy consumption increased by 5.7% in 2023, the first time since at least 2005 that energy demand has grown faster than GDP.
With coal consumption growing by 4.4%, our analysis shows CO2 emissions increasing by 5.2% – at the same rate as GDP – highlighting energy-intensive recent growth patterns.
China’s economic growth during and after the Covid-19 pandemic has been highly energy- and carbon-intensive. CO2 emissions grew at an average of 3.8% per year in 2021-23, up from 0.9% a year in 2016-20, while GDP growth slowed from an average of 5.7% to 5.4%.
Another year of rapidly rising emissions in 2023 leaves China way off track against its target of cutting carbon intensity by 18% during the 14th five-year plan (2021-25).
As a result, CO2 emissions would now need to fall by 4-6% by 2025 to hit the goal. This is illustrated in the figure below, showing historical emissions (black line) and the reductions needed by 2025 to hit the carbon intensity target, depending on the rate of GDP growth.
Even if China’s GDP growth is high and averages 6% per year in 2024-25, the intensity target requires CO2 emissions to fall by 4%.
The main drivers of the emissions increase in 2023 were coal-fired power and oil consumption, which increased by 6% and 8%, respectively.
A major reason for the growth in power generation from coal was that hydropower operating rates reached the lowest level in more than two decades due to a series of droughts. These operating rates are likely to recover towards average levels in 2024.
The increase in oil consumption represents a rebound from the slow demand growth during zero-Covid and an outright drop in 2022. Gas consumption rebounded as prices came down from 2022 highs, while still remaining elevated.
The clean energy manufacturing boom also has a role in driving emissions, due to energy-intensive processes involved in the production of solar PV and batteries, in particular.
Approximately one percentage-point of CO2 emission growth can be attributed to these sectors, based on output data and emission intensities estimated for solar PV, electric vehicles and batteries.
This means that, without the clean technology manufacturing boom, China’s CO2 emissions would have grown by around 4.2%, instead of the 5.2% estimated in our analysis.
Nevertheless, the increase in manufacturing will result in a significant reduction in emissions in net terms, once the products are in use. About half of this reduction will be realised outside of China, as the products are exported.
China is off track to all of its 2025 climate targets
China’s climate pledge under the Paris Agreement (nationally determined contribution, NDC) was updated in 2021, following commitments made by President Xi Jinping earlier that year and incorporating targets set under the 14th five-year plan.
The updated NDC makes commitments to strictly limit coal consumption growth; strictly control new coal power; reduce energy and carbon intensity by 2025; and increase the share of non-fossil energy sources to 25% by 2030.
In addition, the country’s five-year plans set targets of increasing the share of non-fossil energy sources to 20% by 2025 and deriving more than 50% of the increase in energy use from 2020 to 2025 overall from renewable sources.
All of these targets are severely off track after 2023.
The table below lists the various climate- and energy-related targets, the progress seen from 2020-23 and what would be needed during 2024-25 to achieve each of the goals. (See below for further details on each indicator and what is needed by 2025.)
China’s 2025 climate commitments and targets in the energy sector
| Indicator | Target | Progress in 2020-23 | Change needed in 2024-25 |
| Carbon intensity | -18% | -4.6% (-1.5%/year) | -7%/year; reduce emissions in absolute terms |
| Energy intensity | -13.5% | -2% (-0.6%/year) | -6%/year; reduce energy use in absolute terms |
| Coal consumption growth | “strictly limit” | Annual growth increased eightfold from 0.5% in 2016-20 to 3.8% | Negative growth to limit increase to the same rate as previous five-year period |
| New coal power projects | “strictly control” | Permits increased fourfold, from 25GW per year in 2016-20 to 110GW per year | Restrict new permits and review permits already granted |
| Non-fossil share of energy overall | Increase by 4.1 percentage points | Increased by 1.8 percentage points (0.6 points per year) | Rate of increase has to double to 1.2 points per year |
| Share of energy consumption growth met by renewables | Above 50% | 30%, down from 42% in 2016-20 | Renewable energy growth needs to double and energy consumption growth needs to slow to pre-Covid rate; total consumption of fossil fuels needs to fall.Renewable energy growth needs to double and energy consumption growth needs to slow to pre-Covid rate; total consumption of fossil fuels needs to fall. |
The centrepiece of China’s 2020 and 2025 climate commitments has been reducing carbon intensity, or CO2 emissions from energy use per unit of GDP.
The country’s carbon intensity reportedly fell 48% from 2005 to 2020. China committed to an 18% fall from 2020 to 2025 – and to reducing carbon intensity by more than 65% from 2005 levels by 2030, which requires a further reduction of at least 17% from 2025 to 2030.
However, as of the end of 2023, China’s carbon intensity has only fallen 5% in the 14th five-year plan period, lagging far behind the target of 18% from 2020 to 2025. If this target is to be met, CO2 emissions will have to come down in absolute terms from 2023 to 2025.
The figure below shows how China overachieved against its carbon intensity target for 2015-2020 but is veering increasingly off track against the goal for 2020-2025.
China’s energy intensity increased by 0.5% in 2023, the first annual rise since at least 2005. From 2020 to 2023, energy intensity only fell 2%.
The figure below shows that China narrowly missed its energy intensity target during the 13th five-year plan period, spanning 2016 to 2020, as progress halted in 2020. The country is now far off track for its 14th five-year plan target.
Indeed, to meet the target of a 13.5% reduction over 2020-25 – given the lack of progress as of the end of 2023 – energy consumption would have to fall in absolute terms over the next two years, while the rate of GDP growth is maintained or accelerated. This makes the goal all but unachievable.
The share of China’s energy demand met by non-fossil sources has increased by 1.8 percentage points from 2020 to 2023, against a target of 4.1 points by 2025.
This is shown in the figure below, illustrating the targeted 15% share for non-fossil energy by 2020 and 20% by 2025, as well as progress to date.
Meeting the 2025 target would mean that the rate of increase needs to double for the next two years. Moreover, if energy demand growth continues at the exceptionally high rate of 2020 to 2023, then energy production from non-fossil sources would need to grow at 11.3% per year to meet the target, up from 8.5% in the past three years.
Alternatively, the growth of renewables and nuclear could be maintained – but energy consumption growth would have to slow down to its pre-Covid average.
Only 30% of energy consumption growth has been met by renewable energy in 2020 to 2023, against a target of more than 50% during 2020-25.
This is illustrated in the figure below, showing contributions to annual energy demand growth from fossil fuels (grey bars), nuclear (blue) and renewables (red).
The 50% target is now highly unlikely to be met without a slowdown in energy consumption growth. Without a slowdown, renewables would have to grow by 20% per year to meet the target, up from 8.9% in the past three years.
Both growth in coal consumption and new coal power projects accelerated sharply in 2021-23, despite Xi’s pledges to “strictly control” them.
This is illustrated in the figure below, with annual coal consumption growth on the left and the amount of new coal capacity added each year on the right.
Indeed, the average growth rate of coal consumption increased 8-fold from 0.5% per year in 2016-20 to 3.8% per year in 2021-23.
Similarly, new coal power approvals increased fourfold in 2022-23, compared with the five years before the “strictly control” pledge, based on analysis of Global Energy Monitor data.
Since the beginning of 2022, a total of 218 gigawatts (GW) of new coal power plants have been permitted. By the end of 2023, some 89GW of this capacity had already started construction, while 128GW had yet to break ground.
Furthermore, the government’s official policy has shifted to strongly encouraging new coal power. An assessment of the projects permitted in 2022-23 shows that requirements, set for approving new coal power plants in August 2021, have not been enforced.
Statements from developers and government officials – see below – confirm that the 14th five-year plan period until 2025 is being seen as a “window of opportunity” for new coal power plants, rather than a period when new projects are strictly controlled.
This is causing a rush to secure permits for new projects. China Shenhua called the period until 2025 “an opportune time for thermal power construction”. The provincial state-owned enterprise supervisor boasts of Inner Mongolia Energy Group “achieving a flying start” to 2023 and “seizing the policy window” for coal power projects.
The Zhejiang province energy regulator emphasised the importance of seizing the time window for thermal power construction during the 14th five-year period.
Power China called for joint efforts with local government officials to exploit the coal power development window effectively, citing a plan known as “three times 80GW”. This refers to a proposal promoted by the thermal power construction industry to permit and commission 80GW of coal power plants each year, from 2022 to 2024.
The meaning of the pledges to “strictly control” growth in coal consumption and new coal power projects lacks a precise definition. However, a sharp acceleration of coal consumption growth and coal power plant approvals, along with active government promotion of new projects, is hard to reconcile with the pledge to exert strict control.
By this logic, meeting the pledge on coal consumption growth would require, at the very least, reducing coal use from 2023 to 2025 to bring the growth rate during the 2021 to 2025 period closer to the rate during the preceding five-year period.
Similarly, meeting the commitment to control new coal power projects would require enforcing existing policy to limit new schemes, restricting new permits and reviewing permits already granted, to limit the acceleration compared with the preceding five-year period.
Official energy data is over-reporting coal consumption growth
In 2022, government policies seeking to increase coal mine output and push down coal prices led to a sharp deterioration in the quality and calorific value of coal produced.
This fall in quality meant that the weight of coal being consumed increased by far more than the amount of energy supplied or CO2 emitted from that coal.
China’s official statistics failed to capture the change and consequently over-reported the growth in coal consumption and under-reported the improvement in CO2 intensity in 2022. This 2022 data could be expected to be revised once more complete energy statistics are released later.
Unlike in 2022, the officially-reported coal consumption growth rate for 2023 is more closely aligned with growth in coal power generation and output in key heavy industry sectors. The data indicates that coal use grew 4.4% in 2023, while power generation from coal rose 6%.
However, the conclusion that CO2 emissions need to fall from 2023 to 2025 to meet the carbon intensity target holds, even if a correction to 2022 data is made.
Calculating with current official data, CO2 emissions need to fall by 3.8-6.5% in the next two years, depending on the growth rate of GDP.
Based on my previous estimate that the growth in CO2 emissions in 2022 was inflated by 2.3 percentage points, a correction for 2022 would put the required reduction at 1.6-4.3%.
Government response
Energy intensity and carbon intensity reduction are among the 20 “main indicators” specified in China’s overarching five-year plan for 2021-25.
The mid-term evaluation of progress, published by China’s top economic planner the national development and reform commission (NDRC) in December 2023, identified these indicators as two of the four that were off track, along with a key air quality target.
(Air pollution concentrations also rose in 2023 due to increased industrial and transportation emissions, along with unfavourable weather conditions.)
In late 2023, the NDRC reprimanded the provinces of Hubei, Shaanxi, Gansu, Qinghai, Zhejiang, Anhui, Guangdong and Chongqing for lagging behind on the targets to control energy intensity and total energy consumption.
Zhou Dadi, a member of the national climate change expert advisory committee, pointed to the weak growth in service industries as the reason for the lack of progress on the intensity targets.
Service sectors have relatively low energy demand and carbon emissions relative to economic output, so the decline in their share of economic activity tends to increase the energy and carbon intensity of the economy.
The NDRC’s evaluation report also identified measures to achieve the targets, including improving policies to control energy use and carbon emissions, curbing the initiation of projects with high energy consumption and high emissions, strictly limiting total coal consumption, promoting a shift to cleaner industry and transportation, promoting energy conservation and, importantly, accelerating the deployment of renewable energy.
The clean energy boom can allow most targets to be met
While China fell severely behind on its 2025 climate targets for the energy sector, the past two years saw a veritable boom in clean energy installations – particularly solar power.
This boom puts most of the targets still in reach, especially if energy demand growth returns to the pre-Covid rates.
My earlier analysis showed that China’s CO2 emissions could fall this year and then stabilise, if additions of low-carbon power generation continue at 2023 rates and electricity demand returns to trend.
Under this projection, CO2 emissions fall by approximately 1.5% from 2023 to 2025. Therefore, achieving the 4-6% reduction in CO2 emissions needed to meet the CO2 intensity target from 2023 to 2025 would require further acceleration in clean energy deployment, or a sharp slowdown in energy demand growth.
The increase in the share of non-fossil energy should be possible to achieve given the sharp increase in solar and wind installations in 2023. To start with, slow progress was partially caused by the record-low hydropower operating rates in 2023, linked to record droughts.
Even if energy demand continued to grow at the 2020-23 rate, continued low-carbon energy additions at the 2023 level should suffice to raise the share of non-fossil energy to 21%, comfortably ahead of the target.
The target of renewable energy contributing half of the growth in total energy demand is significantly more challenging.
If energy consumption growth rate slows down to its pre-Covid average and clean energy capacity additions continue at the 2023 rate, enabling the growth rate of renewable energy production to almost double to 16%, then the target would likely be reached.
This would also mean a reduction in the total consumption of fossil fuels and a reduction in energy sector CO2 emissions. This scenario would arguably also meet the commitment to “strictly limit the growth in coal consumption”.
Meeting the pledge to “strictly control” new coal power projects would mean thoroughly assessing the justification for permits granted in the past two years and restricting the issuance of new permits.
The large amount of electricity storage being deployed – especially pumped hydro, but increasingly also grid-connected batteries – reduces the need for thermal power plants.
For a significant restriction of new coal power to be possible while ensuring electricity supply security, progress would also be needed on power system reforms that increase flexibility and make more efficient use of existing capacity.
China’s clean energy boom has been happening much faster than official targets for wind and solar installations would require, driven by enthusiasm from local governments, state-owned enterprises and investors.
However, due to the rapid increase in energy consumption, meeting China’s headline climate targets now requires that the momentum of clean energy installations is maintained.
About the data
Total energy consumption and energy mix were taken from national bureau of statistics annual data. Improvements in energy intensity and carbon intensity were compiled from the bureau’s annual statistical communiques and changes in carbon emissions were calculated based on reported GDP growth and carbon intensity improvement.
Growth in total energy consumption and changes in the energy mix were taken from preliminary information released by the national bureau of statistics. Growth in CO2 emissions in 2023 was calculated using Intergovernmental Panel on Climate Change default emission factors based on changes in the consumption of coal, oil and gas.
The post Analysis: Record drop in China’s CO2 emissions needed to meet 2025 target appeared first on Carbon Brief.
Analysis: Record drop in China’s CO2 emissions needed to meet 2025 target
At least 67 NHS hospital wards, departments and other sites across the UK have been forced to temporarily close or relocate due to weather-related flooding over the past five years, a Carbon Brief investigation reveals.
Maternity centres, surgical theatres, a neonatal intensive-care unit and even entire hospital buildings have been disrupted by heavy rainfall or encroaching floodwaters.
Carbon Brief submitted freedom-of-information (FOI) requests to 162 NHS trusts, which show that while many flood-related shutdowns were brief, some lasted for weeks or months.
In total, 148 trusts responded to these requests with reports of 67 flood-related shutdowns, giving detailed data for 30 incidents that resulted in a total of 3,000 days of closures.
Reports of flooding at NHS sites have been on the rise, according to NHS England data.
This comes as the UK experiences wetter winters, with periods of extreme rainfall that are increasingly linked to human-caused climate change.
These floods can exacerbate existing problems in a healthcare system that is already struggling with insufficient funding, old hospital buildings and a backlog of maintenance work.
Indeed, while there have been efforts to make UK hospitals more resilient to extreme weather, one expert tells Carbon Brief that such measures are difficult to implement when these institutions are struggling to keep their “heads above water”.
Rising floods
Floods pose a threat to people’s health, but they also threaten the UK’s healthcare infrastructure. Water can enter hospitals, paralyse ambulance services and damage equipment, placing strain on an already stretched NHS.
NHS records show that the number of flood incidents “caused by external weather events” in facilities across England has doubled since 2021, reaching nearly 400 in 2024-25.
Equivalent data is not available for Scotland, Wales and Northern Ireland, although there have been reports of floods disrupting services across the whole UK.
As global temperatures rise and the atmosphere holds more moisture, UK winters are getting wetter. Attribution studies show climate change has increased the severity of recent rainfall and flooding events – including Storm Eunice in 2022 and Storm Babet in 2023.
There is also a risk of increased flooding when heavy rain hits after periods of intense drought, of the kind seen in recent years.
Environment Agency modelling suggests that a rising share of medical facilities in England will be at risk of flooding due to climate change. It says the share of sites at risk will increase from a quarter in 2024 to a third by the middle of the century.
Despite this apparent threat facing the UK’s healthcare system, there is limited information about the extent to which these floods are already disrupting NHS services.
Closed services
To build a fuller picture of NHS-wide flooding, Carbon Brief sent FOI requests to 162 trusts and health boards – the organisations in charge of health services – across England, Scotland, Wales and Northern Ireland.
They were asked for details of wards, departments or services that had been temporarily or permanently closed due to weather-related flooding, such as river floods or heavy rainfall, between 2021-22 and the start of 2026.
In total, 148 of these bodies responded with details of 67 incidents in which weather-related floods have triggered closures. The map below shows where these incidents were located, from hospital wards in Scotland to an eye unit on the south coast of England.
The 67 flooding-related disruptions reported by NHS trusts and health boards is likely an underestimate. Many trusts told Carbon Brief they did not record such detailed information or that collating it would be too time-consuming.
Nevertheless, the results provide an insight into the kind of risks facing NHS services as weather gets more extreme.
Among the closures were 13 accident and emergency (A&E) departments, urgent treatment centres and minor injuries units. There were also 10 hospital wards, 10 surgical theatres, five maternity units and a neonatal intensive-care unit affected by flooding.
Many trusts did not provide information about how long each closure lasted. However, the 30 incidents where timespans were provided add up to the equivalent of more than 3,000 days – or eight years – of closures across NHS sites.
The infographic below provides a snapshot of some notable closures from the dataset.
The entire Buckland Hospital site in Dover closed for two days in 2025 amid “exceptional rainfall” and flash floods. People seeking radiology, maternity and urgent-care services were told not to visit over the weekend and various clinical services were delayed or cancelled.
The NHS declared a “major incident” in 2021 when flood waters “caused power outages impacting multiple areas” at Whipps Cross Hospital in north-east London – including its maternity service – for four days. Neighbouring hospitals also flooded.
Some closures lasted far longer. In Stroud General Hospital, a surgical theatre was closed for two weeks and an X-ray facility for around two months after storm water overflowed into the building in 2023.
Several NHS trusts stressed that the flooding incidents they reported were localised – often resulting from roof leaks exacerbated by heavy rain – and resulted in minimal disruption. Sometimes, as with a cardiology suite in Cannock Chase Hospital, the service was moved and the trust says patient care was not disrupted.
However, the responses also showed the breadth of damage such events can cause, including rainwater “pouring onto expensive equipment” and floods triggering the long-term relocation of services.
For example, Orchard Cottage, a site that provided care for adults with learning disabilities in Derbyshire, experienced major flooding during Storm Babet in 2023 and was permanently shut down as a result.
Adaptation needs
The UK Health Alliance on Climate Change, a group of UK health organisations, concluded in a report in 2025 that, with flood risks projected to grow, there is an “urgent need for adaptation measures” across the nation’s healthcare facilities.
Government advisors at the Climate Change Committee have highlighted the need for flood resilience in UK hospitals, including flood barriers, waterproofed electricals and built-in redundancy for critical areas, such as theatres, labs and IT equipment.
There have been various measures at both government and NHS level intended to improve the resilience of medical facilities to climate-related hazards.
The UK’s national adaptation programme sets out expectations for NHS England to “adapt NHS infrastructure to extreme weather events”. All trusts must have “green plans” in place, which require climate change to be factored into infrastructure decisions, for example, through the creation of drainage systems or green spaces.
Yet, as it stands, three-quarters of UK doctors say their workplaces are not prepared for the impact of extreme weather and nearly half of healthcare workers report that extreme weather has disrupted NHS services in the past five years.
Many hospitals have outdated infrastructure – often predating the founding of the NHS – which was not designed to cope with climate change. Prof Hugh Montgomery, chair of intensive-care medicine at University College London, tells Carbon Brief:
“The hospitals themselves weren’t built for this weather any more than anything else is really – and of course it’s going to get worse, in an exponential function.”
Many of the FOI responses provided to Carbon Brief identified specific building defects, such as roof leaks, which led to the flooding incidents during periods of heavy rainfall. There is a huge – and growing – backlog of maintenance work at NHS hospitals that was estimated in 2024-25 to need repairs costing £15.9bn.
Chris Naylor, a senior fellow at the King’s Fund, a thinktank focusing on health policy, tells Carbon Brief:
“Dealing with some of the backlog maintenance would probably help with climate adaptation as well, because of leaky roofs and all the rest of it. But we do also need to be thinking specifically about climate adaptation within the NHS and making sure there is funding for that.”
Montgomery points out that with trusts “mostly bankrupt” and most hospitals running a deficit, the question remains how to fund such interventions. “They’re struggling to keep their heads above water and they’re losing money,” he says.
Dr Mark Harber, a consultant nephrologist and special adviser on climate change at the Royal College of Physicians, tells Carbon Brief that hospitals at least need to make plans for extreme weather. This is particularly important for patients in need of time-dependent and life-saving treatments, such as kidney dialysis and chemotherapy.
Harber notes that hospitals, supply chains and transport could all be disrupted by floods:
“You have to have plans in place to deal with that, even if the NHS can’t deal with the flooding risk per se.”
Carbon Brief asked NHS England – which is responsible for the majority of the trusts that reported flooding disruption – for comment, but had not received a response at the time of publication.
Methodology
The list of incidents reported by trusts can be viewed here.
Carbon Brief sent FOI requests to 120 English NHS trusts that have reported any incidents of flooding since 2021 in NHS England’s Estates Returns Information Collection (ERIC) dataset. This covers around 60% of all English NHS trusts.
Carbon Brief also filed FOI requests with all 42 of the health boards and trusts in Scotland, Wales and Northern Ireland, which are equivalent to English NHS trusts.
All trusts and health boards were asked for details of wards, departments or services that have been temporarily or permanently closed due to weather-related flooding, such as river flooding or heavy rainfall.
This matches the wording used to describe a flooding event in the ERIC system, which requires the reporting of all flood events “caused by external weather events” that trigger a risk assessment by staff. Such external events are distinct from floods caused by other issues that are not related to the weather, such as burst pipes.
In total, 14 trusts did not respond and many more said they did not hold the data requested. Some trusts provided data, but on further questioning stated that the data they provided covered all flooding events and it was not possible to say which were related to weather conditions. These cases have not been included in the final dataset.
The post Revealed: Floods have forced at least 67 closures at NHS hospitals since 2021 appeared first on Carbon Brief.
Revealed: Floods have forced at least 67 closures at NHS hospitals since 2021
Adeline Rochet is a programme manager for the Corporate Leaders Group Europe, a business coalition driving the transition to a sustainable, competitive, and resilient economy convened by the University of Cambridge Institute for Sustainability Leadership (CISL).
Europe’s economy depends on the natural world functioning as it should, but the effects of climate change risk undermining increasingly delicate ecosystems. Talks about the European Union’s next long-term budget miss this fact.
Climate-related losses in the EU have already reached €822 billion since 1980, with a quarter of that damage concentrated in just the past four years. Ecosystems are under increasing pressure: more than 80% of protected habitats are in poor condition, soils are degrading and water stress is rising across the continent.
The latest state of the climate report by the EU’s Earth monitoring service Copernicus confirms this worrying state of affairs: 95% of Europe experienced above-average temperatures in 2025.
Economic exposure to nature-related risk is also growing. Businesses, banks and insurers are beginning to reflect this in their risk assessments.
So, will the policymakers in charge of developing the European Union’s next big budget integrate this vision? We are in the midst of finding out.
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Every seven years, the EU must negotiate a new budget that will help fund priorities over a seven-year-long period. The current one, which runs out next year, is worth more than a trillion euros.
Talks about the next multiannual financial framework (MFF) for 2028-2034 are now getting serious and the initial outline of this new budget shows it will focus on competitiveness, resilience and prosperity.
But, as the European Parliament adopted its negotiating position for the crunch budget talks and EU member states shape their approach ahead of a Council meeting on May 26, it is clear that the positioning of nature within this framework is strategically underestimated.
Why nature impacts economic growth
Back in 2022, France’s nuclear power output was severely affected when heatwaves drove up the temperature of the rivers used to cool atomic reactors, impacting other European countries too. This was particularly poor timing given the energy price crisis triggered earlier that year by Russia’s illegal invasion of Ukraine.
Low river levels caused by drought have also heavily impacted economic activity and growth in countries like Germany, due to the negative effect on inland trade, while degraded fields in the Netherlands combined with heavy rainfall have ruined potato harvests.
These examples show that we cannot detach the health of the European economy from the good functioning of nature.
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Nearly three-quarters of businesses in the eurozone rely directly on ecosystem services such as clean water, fertile soils and pollination. That dependency extends into the financial system, where around 75% of bank lending is exposed to companies dependent on these natural assets.
They entirely underpin supply chains and financial stability across the European economy. If load-bearing ecosystems collapse, businesses not only face disruption in their own operations, but they will also be exposed to failures from suppliers and customers.
This is not just a risk for individual companies, it is a threat for the whole system.
A budget that looks greener than it is
According to the latest proposals for the next MFF, a single 35% climate and environmental target will replace priorities that used to have distinct funding. As it stands, biodiversity has a 10% target, yet spending has struggled to reach even 8%, already showing how easily it is put to one side in practice.
In the new framework, biodiversity is absorbed into a broader category with no separate tracking or visibility. Dedicated instruments are folded into larger funding envelopes, and nature-based investments are placed in direct and distorted competition with industrial projects.
These are often faster to deploy and easier to measure, making them more attractive.
Headline figures reinforce some appearance of ambition, with €587–635 billion allocated to climate and environmental objectives. But since these are aggregated numbers, they do not show how much will reach ecosystem conservation or restoration.
Less visibility, weaker accountability
Biodiversity funding also remains structurally fragile, with around 80% concentrated in agriculture policy rather than supported by a diversified investment strategy.
This shift is structural: nature has been relegated from a defined priority to a mere discretionary allocation, and the governance model reinforces this dynamic.
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Greater reliance on National and Regional Partnership Plans (NRPPs) moves decision-making into national spending choices, where fiscal and domestic political pressure will likely mean long-term ecosystem investments struggle to compete with short-term economic demands.
The current MFF paints a worrying picture of structural triple risk for nature: reduced visibility, increased competition for funding and weaker accountability.
Nature is critical infrastructure
It is a point worth reiterating: investment in nature offers clear economic returns. Healthy ecosystems drive resilience by reducing exposure to climate damage and supporting local economic activity.
Public finance plays a decisive role in enabling these investments at scale, making budget design a question of risk management and capital allocation.
Nature-based solutions already perform essential economic functions. They regulate water systems, restore carbon sinks, provide a buffer against extreme weather events and support agricultural productivity.
These are characteristics of infrastructure. Energy systems, transport networks and digital capacity are treated as strategic investments because they underpin competitiveness.
Natural systems play the exact same role, so why does the current budget plan not reflect this?
The next EU budget will shape investment for the decade ahead. Its structure will determine how risks are managed and where capital flows. Nature cannot be erased in favour of competing short-term priorities.
In the upcoming negotiations, European leaders still have the option to treat nature as a structural objective and a core asset, supporting Europe’s resilience and long-term competitiveness. But they must act now, before it’s too late.
The post Nature cannot be ignored by Europe’s next big budget appeared first on Climate Home News.
https://www.climatechangenews.com/2026/05/25/nature-cannot-be-ignored-by-europes-next-big-budget/
Climate Change
In Florida, an Agricultural Town in Need of an Economic Boost Eyes Hyperscale Data Centers
Across the state’s heartland, communities such as Indiantown are weighing proposals for hyperscale data centers. The massive facilities would reshape Florida’s rural lands.
INDIANTOWN, Fla.—Carroll McAllister frets over the prospect of a hyperscale data center opening next to the grassy expanse where she grew up, in a shack her father built.
In Florida, an Agricultural Town in Need of an Economic Boost Eyes Hyperscale Data Centers
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Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
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Renewable Energy7 months agoSending Progressive Philanthropist George Soros to Prison?
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