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Carbon Brief handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.
Key developments
China’s top climate negotiator interviewed
COAL STANCE: China News Weekly recently interviewed Su Wei, China’s lead climate negotiator, about China’s stance at COP28 and its energy transition. Su affirmed China’s position on fossil fuels, saying that it is “impossible to completely phase out fossil fuels, given limitations of the resources China possesses”. He argued that countries did not have to “be utterly opposed” to fossil fuels as long as the central question of emissions is solved, through technologies such as carbon capture, utilisation and storage (CCUS). Substituting fossil fuels with renewable energy should follow the principle of “establish [new rules] before breaking [old ones]”, he added. This means a “process” needs to be followed – namely, after “large-scale development” of renewable energy and non-fossil fuel energy, “coal power will be gradually reduced and the proportion of coal stock will also decline”.
DEVELOPED VS DEVELOPING: Su also highlighted the role of developed countries as a key debate at COP28. He described the current international environment as the “biggest challenge to realising the goal of tripling renewable energy capacity globally”, with some developed countries imposing tariffs on or launching investigations into Chinese products. He also criticised developed countries’ failure to provide the $100bn in climate finance they committed to in 2009, describing it as a “muddled account”.
US-CHINA OPTIMISM: Nevertheless, Su was relatively optimistic about the potential for US-China climate cooperation. He raised how US-China alignment at COP28 “made an important contribution” to its success, with the Sunnylands statement jointly released by the two countries allowing them to “propose wording for the text and help[ing] to unlock difficult issues in the negotiation”. Climate change, Su said, “remains one of the few positive elements that China and the US can mobilise to promote the stable development of their relationship”, allowing the two countries to “talk” despite other tensions. (In a recent issue of the Pekingnology newsletter, noted international relations scholar Da Wei concurred, saying the US and China “have some agreements on the climate change issue”. He added: “I believe that the two sides will declare more on climate change in the following months.”)
China ‘needs 324tn yuan’ to meet climate goals
‘ENORMOUS AMOUNT’: China needs to “spend about 324tn yuan” ($45.5tn), which is equal to 2.7 times its 2022 GDP, between 2021 and 2060 to achieve its goals of peaking carbon emissions by 2030 and reaching carbon neutrality by 2060, reported state-run newspaper the China Daily. The figures were included in China’s fourth national communication on climate change, which was submitted to the United Nations Framework Convention on Climate Change in December 2023. China “will need to spend far more to reach carbon neutrality than to achieve carbon peaking”, the document added. China’s previous national communication was submitted more than four years ago in 2019.
GROWING INVESTMENT: Meanwhile, China’s annual national economic work conference – held in December 2023 – announced “promotion of…green and low-carbon development” as one of nine key economic tasks in 2024, with “green” development becoming the “driving force for China’s high-quality development”, according to China News. The 2024 national energy work conference, also held in December, established that China aims to build 200 gigawatts (GW) of wind and solar capacity in 2024, as well as 5GW of nuclear energy, the newspaper added. China5E reported that China’s top economic planner, the national development and reform commission (NDRC) said in its first meeting of 2024 that it would develop “tangible policies” to attract private capital to invest in nuclear power and other major energy projects, as well as environmental protection schemes. Investment in renewable energy in China “seems increasingly to be driven by the profit motive”, a Financial Times editorial argued, adding that this trend is accelerated by increasing adoption of “cleantech” by China’s state-owned enterprises.
MARKET FORCES: China is also developing financial platforms to boost “green” and low-carbon investment in the new year. On 2 January, it launched a stock index to encourage “investment products that grant greater weightings for sectors such as renewables”, reported the Financial Times. Meanwhile, should China’s voluntary carbon market, the China Certified Emissions Reduction (CCER) program, relaunch this year, it could encourage finance to flow to projects that, together, could reduce carbon emissions by tens or even hundreds of millions of tonnes, Jiemian noted.
Updated industry guidelines to ‘encourage green tech’
INDUSTRY CATALOGUE: China’s top economic planner, the national development and reform commission (NDRC), released an updated 2024 version of its catalogue for guiding industry restructuring, designed to “promote high-end, intelligent and green manufacturing”, Xinhua reported. The catalogue divides industries into three categories: encouraged; restricted; and eliminated, reported China Environment. The “restricted” category refers to technologies, equipment and products that, among other things, “are not conducive to the realisation of the goals of carbon peaking and carbon neutrality”, it explained. The “eliminated” category contains technologies that “seriously waste resources, cause pollution…[or] impede the realisation of the goals of carbon peaking and carbon neutrality”, the outlet added. China Environment also reported that the catalogue said it would “encourage green technology innovation and the development of green environmental protection industry, promote energy saving…and resolutely curb the blind development of high-energy-consuming, high-emission and low-level projects”. (The phrase on curbing “blind development” has been in use for several years.)
NEW ADDITIONS: The “encouraged” category adds a “detailed explanation of carbon capture and application”, reported BJX News. The category also adds “green” hydrogen produced by electrolysis of water and synthesis of “green methanol” from carbon dioxide, as well as new solar materials for use in the construction industry, reported the news outlet. The “restricted” category has raised and added limitations for the power sector, such as new coal power units that cannot meet “ultra-low emission” requirements, said the report. Under the “elimination” category, thermal power plants will be phased out in accordance with the principle of “establish first, then modify” (先立后改) with plants eliminated “in an orderly manner, in accordance with an “annual phase-out plan”, added the report. The least efficient coal-fired boilers will be phased out in air pollution priority areas, the outlet added.
OFFICIAL REACTION: Officials from the NDRC told Jiemian that the new edition of the catalogue aims to promote “high-end, intelligent, and green manufacturing industry” in China, they added. The updated catalogue “will encourage green technology innovation and the development of green environmental protection industries, promote energy conservation, carbon reduction and green transformation in key areas”, they told the outlet.
BYD surpassed Tesla, claiming the top spot in EV sales
BYD VS TESLA: Chinese firm BYD’s sales of battery-only vehicles “outpaced” its US rival Tesla in the final quarter of 2023 for the first time, according to BBC News. BYD sold 526,000 units while Tesla delivered 484,000 units. However, for the whole of 2023, Tesla still sold more with 1.8m compared to nearly 1.6m for BYD, the broadcaster added.
SUCCESS STORY: CNN said that China’s fast transition to electric vehicles (EVs) is “thanks to strong government support”. The article quoted analysts from investment bank Natixis Asia saying “first-mover advantage and government support through infrastructure investment and subsidies have made it easy for Chinese EV makers to expand domestically and internationally”. (Consultant David Fishman noted on Twitter that domestic EV sales grew by 36% in 2023, “despite the end of the supporting subsidies”.) According to Bernstein research, “BYD batteries are among the lowest cost in the world”, reported the Financial Times. Michael Dunne, chief executive of Asia-focused car consultancy Dunne Insights, told the FT: “No one can match BYD on price. Period.” In his Bloomberg column, David Fickling attributed BYD’s edge to its in-house battery supply chain and cheaper cells. “More importantly”, he said, “on almost every financial metric, [BYD] is either advancing on, or overtaking [Tesla] — with its gaze already set on the wider car industry.”
FORECAST FOR 2024: Looking ahead to this year, S&P Global Mobility predicted battery electric vehicles (BEVs) sales would reach 13.3m units globally in 2024, accounting for 16.2% of total global passenger vehicle sales, with China’s BEV sales growing 28.6% year-on-year. BloombergNEF’s outlook forecast a milestone will be achieved by the end of 2024 – it will see the first quarter in which consumers buy more than five million electric or plug-in hybrid vehicles, with China being the main contributor.
Spotlight
What to watch in 2024
In 2023, several significant energy and climate stories came out of China. Global carbon dioxide (CO2) emissions rose, driven by increases in China, but analysis for Carbon Brief found that renewable energy growth could cause a “structural decline” of emissions from 2024. New coal “capacity payments” continue policy support for the fuel.
Meanwhile, the US and China issued the Sunnylands statement, which signalled a turning point in bilateral relations and played a part in theCOP28 outcome.
For the first China Briefing of 2024, Carbon Brief asks leading experts what they are watching for in China in the year ahead. Responses have been edited for length and clarity.
Joanna Lewis, provost’s distinguished associate professor of energy and environment, and director of the science, technology and international affairs program, Georgetown University:
The key thing I will be watching is the development of China’s new nationally determined contribution (NDC) and associated 2035 climate goals. Given the Sunnylands statement and COP28 decisions, we can expect that China’s next NDC will include the country’s first economy-wide target covering all greenhouse gases. As China’s emissions are slated to peak before 2030, it will also likely be China’s first absolute emissions target.
Beyond the NDC, I will also be watching China’s coal consumption. While consumption increased in 2023, many predict a slowing in 2024 and possible peaking by 2025 (or earlier). So watching trends over the coming year may signal what is to come. Also important to determining coal trends will be the rate of renewable energy growth. With an estimated 230GW of new wind and solar power installed in China last year – twice that of the US and Europe combined – and major advances in energy storage that are helping address the curtailment issue, China’s renewables sector is poised for continued rapid growth, which can help offset the demand for coal in the power sector.
David Fishman, senior manager, the Lantau Group:
China spent 2023 implementing incremental reforms to its power sector and energy policy – still trending in the right direction for power market decarbonisation and liberalisation, but taking smaller steps than in the previous few years. This is a return to normalcy for China, which has typically adopted a measured approach to policy reforms: preferring to make small changes and observe the outcomes of limited pilots, rather than big changes all at once.
I expect 2024 to be more of the same, with spot-trading in the power exchanges becoming more common and renewable consumption quotas expanding to more sectors. At the same time, the surging growth in renewable capacity, especially from desert mega-bases, should allow renewable generation growth to exceed power consumption growth. This will cap coal consumption in the power sector and send China’s carbon emissions into long-term structural decline from 2024 onward.
Ryna Cui, research director, Center for Global Sustainability, University of Maryland:
It is crucial to watch how coal plants will be utilised in the power system, whether as expected to back up an increasing share of intermittent renewables or to continue as “baseload” generation, where the emissions impact can be significant. It is also critical to watch whether and how China moves from a continued preference for coal to other solutions for grid stabilisation, such as cross-region grid balancing, demand-side management, battery and other storage technologies.
Methane is an emerging area that is finally receiving the policy attention it requires – both in China and globally. China’s methane action plan is the first published national policy targeting methane as a greenhouse gas (GHG). The document is brief, setting up overall guidelines and main task areas. So it is important to watch how more detailed policies and targets will continue to develop.
Internationally, the US-China Sunnylands statement set up the expectation for the next round of NDCs to cover all GHGs and all economic sectors. It will be exciting to watch how Sunnylands and the previous joint Glasgow declaration will be implemented.
Yan Qin, lead carbon analyst at the London Stock Exchange Group:
This will be an exciting year for China’s national carbon market and the newly relaunched offset market. The national emissions trading scheme (ETS) has just completed its second compliance period, with allowance prices rising to as high as 80 yuan per tonne ($11.25/t) due to tightening of benchmarks.
The scheme will see more progress this year, both on the regulatory side, with the newly released state council regulation on national carbon trading, and on the expansion to more industry sectors, with the first new batch possibly including the cement and aluminium sectors. We might also see more clarity on the role of the carbon market in China’s “dual carbon” targets against the backdrop of moving from energy dual control to carbon dual control. The revamped China Certified Emissions Reduction (CCER) offset market will also see issuance of new credits resume this year.
Tu Le, founder and managing director, Sino Auto Insights:
It was another record year for “new energy vehicle” (NEV, mainly electric vehicle) sales in China, largely on the back of a serious price war ignited by Tesla in January 2023. I’ll be watching to see whether the market can keep it up – and who will blink first this year. Will there continue to be foreign direct investment by Chinese electric vehicle and battery companies outside of China and, if so, where?
Chinese automakers exported a record number of vehicles in 2023, catching many observers’ attention. With the Inflation Reduction Act making the US market unattractive for now, the EU is the most attractive major market to Chinese EV firms. EU automakers will also begin shipping Chinese-built vehicles to their home markets. How the EU will ultimately react to this – and the growth of Chinese EV exports more widely – remains uncertain.
Watch, read, listen
BIG READ: China submitted its fourth national communication on climate change to the UNFCCC in December 2023 – the first since June 2019 – with sections on China’s greenhouse gas emissions by sector, “key objectives” and financial needs.
DE-RISKING RISKS: Henry Sanderson argued in Foreign Affairs that western countries must prioritise in order to compete with China on “clean energy” technologies.
WASTE UNREST: The New Books in East Asian Studies podcast interviewed Dr Jean Yen-chun Lin on research into environmental protests against waste incineration in Beijing.
CLIMATE ADAPTATION: China and Africa will “jointly promote climate resilience”, ministry of ecology and environment minister Huang Runqiu said in remarks, recently posted on YouTube, made at the September 2023 Africa Climate Summit.
New science
Hotter days, dirtier air: The impact of extreme heat on energy and pollution intensity in China
Energy Economics
Researchers have identified a “causal impact from ‘local temperature shocks’ on pollution intensity” in China between 2008 and 2017, finding that extreme heat increases energy demand, diminishes energy efficiency and increases consumption of coal, which leads to a rise in pollution intensity. The researchers said that this shows that extreme weather caused by climate change “will perpetuate an adverse impact on pollution intensity” across China.
Methane mitigation potentials and related costs of China’s coal mines
Fundamental Research
A new study estimated that “through continuous coal cuts and available…mitigation measures, China’s [coal mine methane] emissions can be reduced by 65%-78% [from 2021 levels] in 2060”. The study also found that methane emissions from abandoned coal mines “will far exceed those from coal mining under the 2060 carbon-neutral scenario, especially in northeastern China”. While coal mine methane mitigation may not currently be economically feasible, it added, it could become “the most cost-effective solution as [carbon dioxide] prices increase”.
Who is most affected by carbon tax? Evidence from Chinese residents in the context of ageing
Energy Policy
New research has discovered “significant differences” in the rate by which different age groups in China are affected by carbon taxation, with the “vulnerable elderly” being particularly affected. The results show that the “indirect carbon payment burden rate on the elderly…is 1.2 times that of the general population”, with low-income seniors facing a slightly higher than average rate at 1.4 times that of the general population.
China Briefing is compiled by Anika Patel and edited by Wanyuan Song and Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 11 January: Expectations for 2024; Top climate negotiator interviewed; NDRC promotes ‘green’ industry appeared first on Carbon Brief.
The launch of the Africa Energy Bank (AEB) has been put back yet again, raising doubts about the institution’s future ability to finance fossil fuel projects – its main objective – as global lenders retreat from such investments over climate concerns, experts told Climate Home News.
The bank, which had been billed to launch in September after a series of delays, is now scheduled to begin operations in November, according to the head of the African Energy Chamber, an advocacy body for the continent’s oil and gas sector.
Even as the world aims to transition away from fossil fuels, many African leaders have made clear they want to continue exploring and extracting the continent’s large oil and gas deposits – estimated at around 125 billion barrels of crude and over 600 trillion cubic feet of gas – to boost economic development.
As a group, Africa sided with a number of powerful oil-and-gas producing nations in blocking progress on negotiations to craft a global roadmap to transition away from fossil fuels at last year’s UN COP30 climate talks, although some countries did individually support the proposal.
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Campaigners oppose Dangote’s planned Kenya refinery over climate and ecological risks
Plans to build Africa’s second largest oil refinery in ecologically sensitive region criticised as “environmental recklessness” -
Tanzania pushed African nations to oppose fossil fuel transition at COP30
While chairing the African group at the summit, the gas-dependent nation advised the continent’s ministers to block language on transitioning away from fossil fuels
Meanwhile, major projects under development across the continent – including the 1,443-km East African Crude Oil Pipeline (EACOP) and Dangote’s 700,000-barrel-per-day Kenyan refinery – show that African governments see oil and gas as playing a significant role in meeting their energy and economic needs for many years to come.
In 2022, at a gathering of the African Petroleum Producers’ Organization (APPO) in oil-rich Angola, ministers from its member states adopted a resolution to create the Africa Energy Bank to finance projects for the production, use and trade of oil, gas and broader energy sources.
African control over energy resources
An article on the APPO website explains that the bank was conceived as a way to overcome “disenchantment” with fossil fuels among “the international community” which it said had crystallised around the “energy transition” concept.
“If Western countries, after having long taken advantage of the energy sources they now revile to develop, can afford the luxury of abandoning them, this is not the case in Africa,” it adds, noting that many of the continent’s economies are still largely dependent on oil and gas revenues.
A separate web page about the bank, also hosted on APPO’s website, says its objectives include financing the exploration, production and refining of oil and gas, as well as supporting member states in transitioning from fossil fuels to cleaner energy sources “while ensuring energy security”.
Said Addi, a former executive with Shell and energy commodities trading house Gunvor, said the new bank was judged necessary because financing for hydrocarbons from many traditional international lenders has become constrained.
In trying to fill this financing gap, Africa is not simply setting up another fund to support oil and gas, he added. “It is also an attempt to give African countries greater control over how their energy resources and infrastructure are financed,” he explained.
Nigeria to host the AEB
The energy bank – a joint initiative of APPO and the African Export–Import Bank (Afreximbank) – has so far suffered several delays and is almost two years behind schedule. The initial plan was to start operations in January 2025, with Nigeria as the host country, but the bank’s opening was delayed to June of that year to allow Nigeria time to finalise the construction of the bank’s headquarters in Abuja.
After the government announced the completion of the offices in late November 2025, a new launch date was set for January 2026, which was moved back to April, June and then September. Now it has shifted again to November, raising concerns that the institution may be losing momentum.
Former Shell executive Addi said that if the capital is eventually paid in, the bank becomes operational and its first projects are commercially credible, then the delays will be regarded as normal teething troubles in setting up a multilateral institution. But, he added, scepticism will be justified if it continues to stall.
Uganda may see lower oil revenues than expected as costs rise and demand falls
Baron Lamarré, an oil and gas expert and former Petronas oil trader, said that missing “three deadlines in a row is not normal”, and warned that if the timeline slips again, “the story flips from ‘ambitious institution finding its footing’ to ‘good idea that lost momentum before it found any’.”
The Nigerian government, APPO and Afreximbank did not respond to requests for comment by the time of publication.
The funding challenge
The Africa Energy Bank is targeting base capital of $5 billion, with plans to scale up to $120 billion within five years by mobilising private-sector funds. However, it is expected to start operations with initial seed capital of $500 million.
The funding plan is to have the 18 member countries of the APPO contribute $83 million each to the bank as equity for a combined $1.5 billion. Afreximbank, other non-APPO African countries and investors outside the continent are expected to provide the remaining $3.5 billion.
But even the initial $500 million has not been easy to mobilise. In May, APPO Secretary-General Farid Ghezali called on members to deliver on their pledges towards the startup goal before the end of June. But the delays suggest this may not have been met, with experts saying Africa may be finding it difficult to self-fund its oil and gas projects in the absence of international capital.
Lamarré said every extension of the deadline points to the fact that “raising fossil fuel capital in Africa without the majors and their financing networks is brutally hard”.
Why the global electrification agenda misses the point on Africa’s energy crisis
Since 2020, Western lenders, export credit agencies and insurers have been in steady retreat from African hydrocarbons, he said, while oil majors are divesting their African assets, handing over fields to smaller local operators whose credit ratings are not high enough to borrow cheaply.
Even capital from China and the Gulf, which has partially filled the gap, cannot match the volume, tenor or pricing that Western investors once offered, Lamarré argued.
“If mobilising the first $500 million of seed capital [for the AEB] has taken this long, that’s the clearest signal yet of how steep the climb to $120 billion looks,” he said, noting that the continent’s energy financing gap is as large as $30 billion-$45 billion per year.
Africa’s investment landscape, meanwhile, has been shifting. While foreign direct investment dropped from a 2024 peak, inflows remained roughly one-third above the continent’s long-term average in 2025, according to the 2026 World Investment Report from UN Trade and Development (UNCTAD). They are concentrated in a few sectors including critical minerals needed for renewable energy technologies, battery manufacturing and advanced industrial production.
At the same time, data on global energy investment from the International Energy Agency (IEA) shows that fossil fuel investment in Africa has declined over the last decade.
“Trojan horse” for fossil fuels
While the Africa Energy Bank struggles to get off the ground, climate campaigners have criticised its primary aim of financing oil and gas on the continent at a time when the world is starting to move away from high-carbon fuels to cleaner alternatives.
Bhekumuzi Dean Bhebhe, founder of Africa Change Lab, described the bank as a “Trojan horse”, arguing that its focus on fossil fuel financing runs counter to the global energy transition and the African Union’s Agenda 2063 goals of sustainable development and inclusive growth.
The energy bank, he warned, “risks locking Africa into a new cycle of debt, dependency and fossil fuel entrenchment”, adding that its financing blueprint does not pave the way for a climate-resilient future. “In truth, it is to deepen the same extractive, carbon-heavy pathways that the continent should be moving away from,” he added.
Ugandan farmers use British court to try to stop East Africa oil pipeline
Kenya-based climate and energy expert Joab Okanda said the AEB’s plan to finance oil and gas is “a misplaced priority” and it should instead back clean energy in line with the policies of some of Africa’s major export markets like Europe.
In addition, the new bank could struggle to mobilise enough resources to advance large-scale oil and gas projects, he added, noting that its proposed $5-billion initial capital is equivalent to the cost of the East African Crude Oil Pipeline alone.
The AEB’s aim of backing more fossil fuels should be flipped “to support countries that are oil-dependent to start working on their transition plans”, Okanda said.
The post Launch of Africa Energy Bank delayed again in blow to oil and gas hopes appeared first on Climate Home News.
Launch of Africa Energy Bank delayed again in blow to oil and gas hopes