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China Briefing handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.
Key developments
Critical mineral ‘deal’
TRANSITION TURMOIL: US president Donald Trump said China and the US reached a “deal” after talks were held in London, reported the BBC News, adding that “he said China had agreed to supply US companies with magnets and rare earth metals”. Shortly after the announcement, a Chinese manufacturer confirmed that it received “export permits” to countries including the US, according to Bloomberg. China’s earlier move to impose export curbs on critical minerals had “hit” the global auto industry, said Reuters. In answering Carbon Brief’s question of how the recent mineral disputes may affect global energy transition, Tian Jietang, director-general of the research department of industrial economy at the Development Research Center of the State Council said that the minerals are a “very important factor” for “new energy” development, but the “reason” behind the turmoil is “not from China”. China is “always open” to cooperate with the world for “faster green transition”, he added at an Asia House event.
‘FIRM’ CLIMATE ‘ACTIVIST’: Tian emphasised that China has always been a staunch contributor to global “green transition”. A similar line appeared in a comment article in the Communist party-affiliated newspaper People’s Daily, which called China a “firm activist and important contributor to the world’s green development”. In another People’s Daily article, the newspaper explained that the “direct reason” behind China’s “insist[ence] on carbon reduction” is that “climate warming threatens human survival and the continuation of civilisation”. It added that such “green and low-carbon transition” is also good for China’s economy and society. China Daily said the US’s tariffs on “clean energy products”, on the contrary, are “negatively affecting both [the] US and global green energy”.
Renewable pricing shift
MARKET PRICE: China entered a ”new stage of market-based pricing” for renewables on 1 June, after a notification was issued earlier this year, reported local newspaper Beijing Daily. The newspaper said projects that started operating before June would be paid prices pegged to the local coal-fired electricity price, in line with the previous policy, whereas electricity prices from projects operating after June will not be “protected”. (See the Carbon Brief explainer on the new policy.) The Shanghai-based Paper said there had been a rush to complete renewable projects before the June deadline – new installations of solar in April alone soared by 215%. As of April, the total capacity of wind and solar reached 1,530 gigawatts (GW) in China, “surpassing” the capacity of thermal power, reported industry news outlet BJX News. However, some wind and solar projects have been halted as a result of the new policy, said financial publication Yicai. The outlet quoted an unnamed source saying the returns for some projects are “no longer economically feasible”.
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‘NEW ELECTRICITY SYSTEM’: Meanwhile, the plans to construct the “first batch of pilot projects” for a “new electricity system” was announced, reported BJX News. It added that according to a notification from the National Energy Administration (NEA), the pilot projects will focus on seven areas, including building “smart microgrids” and “virtual power plants”, better connecting clean energy “bases” to the rest of the country and developing “next-generation coal power”. Quoting experts, China Energy Net said that the success in building such a new system lies in transferring the current system from a “single” network to an “‘adaptability-early warning’ planning paradigm” over the next 15th “five-year plan” period (2026-30). The new system should be dominated by renewable energy and respond to risks, such as extreme weather, added the outlet. The NEA confirmed that “speeding up” plans for renewable energy over the next five-year plan period is one of its work priorities for the second half of the year, according to BJX News.
More plans issued as industry and oil set to drop
NEW SYSTEMS: China is aiming to build a “national standardised system for responding to climate change”, covering mitigation and adaptation, reported state news agency Xinhua. In an official Q&A, the Ministry of Ecology and Environment (MEE) said that it led the drafting of the new system, issued jointly with 14 other departments. Separately, the Central Committee of the Communist party of China and the State Council said that China’s market-based approach to environmental issues, such as carbon dioxide (CO2) emissions trading, should be “basically complete” by 2027, reported BJX News. This will include stronger links between the national emissions trading system (ETS) and related markets for “CCERs” and “GECs”, the outlet said. (The steel, cement and aluminium industries are being consulted over joining China’s national emissions trading system, ETS, according to a screenshot of a policy document circulating on social media. The document is not public, but its existence has been confirmed to Carbon Brief by multiple sources.)
INDUSTRY EMISSIONS: Meanwhile, the “national standards for product carbon footprints” for nine products, including electrolytic aluminium, chemical fibres and plastic, have been established, said the People’s Daily. It is estimated that the total carbon dioxide (CO2) emissions from the industry sector could drop to 450m tonnes in 2060, down 95% from 2025, according to a joint report by the Tsinghua University, as well as Energy Foundation China and the Chinese Academy of Environmental Planning – a research institute under the MEE, reported China Science Daily.
FALLING OIL DEMAND: The overall demand for oil is set to decline in China, with the “faster adoption” of “new-energy vehicles” (NEVs) offsetting growth in other areas, reported state-run newspaper China Daily. The outlet added that NEVs and liquefied natural gas (LNG) heavy trucks played a “significant role” in reducing demand for “traditional fuels” in 2024. In addition, strong sales of electric trucks – boosted by government incentives – pushed down demand for diesel, which makes up over a quarter of Chinese oil demand, said Bloomberg. Another article by China Daily said that one incentive – the equipment trade-in policy – motivated more than 4m car trade-in applications between January and May 2025. It said more than half of applications in the first four months of the year were for NEVs. The total production and sales of NEV reached just under 6m units in the first five months of this year, a year-on-year increase of around 45%, reported Xinhua.
Extreme weather events
RAIN AND HEATWAVES: Yunnan province in southeast China was hit by “flash floods and mudslides” triggered by heavy rainfall, affecting around 5,000 residents, reported Reuters. Hunan province in the south also received pouring rain, which “seriously damaged” roads and power facilities, said state broadcaster CCTV. Heatwaves, in the meantime, swept northern China with temperatures in Hebei and Xinjiang province topping 40C, reported China National Emergency Broadcasting Center, a state-run media outlet. People’s Daily reported that the central government had allocated 45m yuan ($6.2m) of “natural disaster relief funds” to support flood control and disaster relief in Yunnan, a landslide in Tibet, and drought relief in Gansu and Ningxia.
11,000,000,000
The capacity of newly approved coal power plants in the first quarter of 2025 in watts – some 11 gigawatts (GW). This is 1GW more than the first six months of last year, according to a report from NGO Greenpeace, covered by Reuters. The newswire added that China had approved 289GW of new coal capacity over 2021-25 and that last year saw the first annual decline in approvals since 2021.
Spotlight
More than 100bn yuan poured into coal via ‘capacity payments’ in 2024
To date, there is no clear evidence that China’s coal “capacity payments” are helping coal-fired power plants to transfer into a “supporting role” with reduced output and emissions, according to a Carbon Brief guest post by Mingxin Zhang, coal researcher at Global Energy Monitor (GEM).
In the first year of the scheme, GEM finds that some 70-100% of China’s coal plants received payments totalling more than 100bn yuan ($14.8bn), boosting their revenues by around 5-8%.
In this issue, Carbon Brief highlights the key findings of the guest post. The full article is available on Carbon Brief’s website.
A ‘supporting’ role for coal
China rolled out a system of “capacity payments” in January 2024, with the aim of maintaining energy security while helping coal-fired power plants shift into a “supporting role”, alongside a growing share of variable renewables.
The mechanism essentially provides a monthly “standby” payment to eligible public coal plants, to help cover fixed operating costs during low production periods and to ensure that they are available to switch on during peak demand periods.
The national framework sets payment levels at either 30% or 50% of a benchmark coal plant’s total fixed costs, which was determined to be 330 yuan ($45.8) per kilowatt (kW).
To illustrate the mechanism’s impact, consider a 600 megawatt (MW) coal plant running at China’s 2024 average rates – operating for 4,628 hours a year and selling electricity at 0.452 yuan ($0.063) per kilowatt-hour (kWh).
If it receives a 30% capacity payment, roughly 59.4m yuan ($8.2m) would be added to its bank account, driving up the revenue by 4.7%. If the rate is at the 50% level, the bump rises to 7.9%.
Project year one
After one year of China’s programme, GEM’s analysis finds that, while the policy has contributed to coal power plant revenue, there is still little definitive evidence to show that it is helping coal plants reduce their operation, as intended.
Only 12 provincial governments – representing 38% of the country’s total operating coal capacity – have released lists of qualifying plants.
Based on the national policy’s payment levels and the 12 provincial recipient lists, the capacity payments in these provinces alone was more than 40bn yuan ($5.5bn).
Combining the total operating capacity and payment numbers from the 12 provinces that have published data with GEM’s most recent national capacity figures, the analysis estimates that the total national payout in 2024 was approximately 107bn yuan ($14.8bn).
(This figure is uncertain. Greater transparency would help clarify how the mechanism is functioning and its role in shaping the future of coal in China’s power system.)
Despite restrictions, most coal capacity is eligible
By cross-referencing provincial recipient lists with GEM’s Global Coal Plant Tracker (GCPT), it is possible to estimate the share of each province’s coal capacity receiving payments.
In almost all of the 12 provinces that published recipient lists, 70-100% of coal capacity is eligible for payments.
The programme said that only “compliant, public operating coal units” are eligible for the capacity payments and excluded three categories:
- “Captive” units, which exclusively serve specific industrial or commercial entities and operate independently from the public power grid;
- Units failing to meet energy efficiency, environmental performance, or operational flexibility standards;
- Units not compliant with the broader “national plan”, a criterion that is not further clarified in the guidelines.
In some cases, the scheme as implemented by individual provinces appears inconsistent with the eligibility criteria. For example, the Mancheng Mill power station in Hebei provides heat and power exclusively to a pulp and paper industrial park. This appears inconsistent with the “captive unit” exclusion.
Some newly built coal power plants and decades-old plants were also included. For example, Beihai Bebuwan power station Unit 4 in Guangxi began operating in March 2024 and was added to the recipient list in September 2024. Shenhua Panshan power station Units 1 and 2 in Tianjin began operating in 1994 and were retrofitted in 2023.
Finally, several provincial lists include smaller units, which may have limited ability to contribute to peak demand management. For example, five 57MW units from Shaoxing Binhai power station in Zhejiang were accredited for capacity payments.
Their actual contribution to evening peak load, when generation from solar and wind is low, is unclear from the list or other available provincial assessments.
More questions than answers?
There was only two months between the announcement of coal capacity payments and their implementation, leaving no time for pilot programmes or detailed feedback. This may help explain the ambiguities that have emerged during the provincial execution process.
Our analysis of the first year of the scheme suggests that provincial discretion has played a major role, with national criteria loosely applied in practice.
Moreover, there is no clear evidence to date that the mechanism has led to reduced coal utilisation hours, or significantly increased solar and wind generation.
Watch, read, listen
MINISTER’S COMMENT: Huang Runqiu, head of China’s MEE, penned an article about biodiversity for Qiushi, the Communist party’s leading magazine on ideology.
US NUCLEAR COMPONENT BAN: The Hong Kong-based South China Morning Post published an analysis on China’s nuclear energy against the background of the US’s nuclear power controls.
CARON NEUTRALITY FORUM: A group of prominent Chinese scholars gathered in Shanghai and made speeches about China’s “dual-carbon goals”, according to the official WeChat account of the Research Institute of Carbon Neutrality of the Shanghai Jiao Tong University.
EV CCOMPETITION: BBC News international business correspondent Theo Leggett recorded a reading of his analysis of the expansion of Chinese cheap electric vehicles (EVs), as well as security concerns over them.
New science
Embracing the future, powering growth: An energy system renewed for China
Springer Nature
A book jointly written by oil major Shell and the Development Research Center of the State Council of China explored energy transition challenges and pathways in China. At the book’s launch event, attended by Carbon Brief, representatives from both organisations introduced the main arguments in the book, including challenges China faces in reaching its “dual-carbon” goals, its high reliance on coal and regional disparities between renewable energy resources and demands, as well as its commitment to reach carbon neutrality in just 30 years – a shorter timeline than most developed countries. The book outlines three “approaches” and five “supports”, including electrification, better carbon and electricity pricing, legal support and investing in energy storage, as well as other resources, such as hydrogen and nuclear.
A machine learning approach to carbon emissions prediction of the top eleven emitters by 2030 and their prospects for meeting Paris Agreement targets
Scientific Reports
China, India, Japan, Canada, South Korea and Indonesia are projected to miss their 2030 emissions reduction targets by “significant margins”, according to new research. The authors used a machine learning approach to analyse data from 1990-2023 from the 11 highest emitting countries. They found that Russia is on track to exceed its reduction targets, while Germany and the US will “fall slightly short”. Iran and Saudi Arabia are expected to increase emissions rather than reduce them, according to the study. The authors say that “emerging economies require international collaboration and investment to support low-carbon transitions”.
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China Briefing is compiled by Wanyuan Song and Anika Patel. It is edited by Wanyuan Song and Dr Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 12 June 2025: Critical mineral exports; Electricity price; Coal ‘capacity payment’ appeared first on Carbon Brief.
China Briefing 12 June 2025: Critical mineral exports; Electricity price; Coal ‘capacity payment’
Drought and heatwaves occurring together – known as “compound” events – have “surged” across the world since the early 2000s, a new study shows.
Compound drought and heat events (CDHEs) can have devastating effects, creating the ideal conditions for intense wildfires, such as Australia’s “Black Summer” of 2019-20 where bushfires burned 24m hectares and killed 33 people.
The research, published in Science Advances, finds that the increase in CDHEs is predominantly being driven by events that start with a heatwave.
The global area affected by such “heatwave-led” compound events has more than doubled between 1980-2001 and 2002-23, the study says.
The rapid increase in these events over the last 23 years cannot be explained solely by global warming, the authors note.
Since the late 1990s, feedbacks between the land and the atmosphere have become stronger, making heatwaves more likely to trigger drought conditions, they explain.
One of the study authors tells Carbon Brief that societies must pay greater attention to compound events, which can “cause severe impacts on ecosystems, agriculture and society”.
Compound events
CDHEs are extreme weather events where drought and heatwave conditions occur simultaneously – or shortly after each other – in the same region.
These events are often triggered by large-scale weather patterns, such as “blocking” highs, which can produce “prolonged” hot and dry conditions, according to the study.
Prof Sang-Wook Yeh is one of the study authors and a professor at the Ewha Womans University in South Korea. He tells Carbon Brief:
“When heatwaves and droughts occur together, the two hazards reinforce each other through land-atmosphere interactions. This amplifies surface heating and soil moisture deficits, making compound events more intense and damaging than single hazards.”
CDHEs can begin with either a heatwave or a drought.
The sequence of these extremes is important, the study says, as they have different drivers and impacts.
For example, in a CDHE where the heatwave was the precursor, increased direct sunshine causes more moisture loss from soils and plants, leading to a drought.
Conversely, in an event where the drought was the precursor, the lack of soil moisture means that less of the sun’s energy goes into evaporation and more goes into warming the Earth’s surface. This produces favourable conditions for heatwaves.
The study shows that the majority of CDHEs globally start out as a drought.
In recent years, there has been increasing focus on these events due to the devastating impact they have on agriculture, ecosystems and public health.
In Russia in the summer of 2010, a compound drought-heatwave event – and the associated wildfires – caused the death of nearly 55,000 people, the study notes.
The record-breaking Pacific north-west “heat dome” in 2021 triggered extreme drought conditions that caused “significant declines” in wheat yields, as well as in barley, canola and fruit production in British Columbia and Alberta, Canada, says the study.
Increasing events
To assess how CDHEs are changing, the researchers use daily reanalysis data to identify droughts and heatwaves events. (Reanalysis data combines past observations with climate models to create a historical climate record.) Then, using an algorithm, they analyse how these events overlap in both time and space.
The study covers the period from 1980 to 2023 and the world’s land surface, excluding polar regions where CDHEs are rare.
The research finds that the area of land affected by CDHEs has “increased substantially” since the early 2000s.
Heatwave-led events have been the main contributor to this increase, the study says, with their spatial extent rising 110% between 1980-2001 and 2002-23, compared to a 59% increase for drought-led events.
The map below shows the global distribution of CDHEs over 1980-2023. The charts show the percentage of the land surface affected by a heatwave-led CDHE (red) or a drought-led CDHE (yellow) in a given year (left) and relative increase in each CDHE type (right).
The study finds that CDHEs have occurred most frequently in northern South America, the southern US, eastern Europe, central Africa and south Asia.
Threshold passed
The authors explain that the increase in heatwave-led CDHEs is related to rising global temperatures, but that this does not tell the whole story.
In the earlier 22-year period of 1980-2001, the study finds that the spatial extent of heatwave-led CDHEs rises by 1.6% per 1C of global temperature rise. For the more-recent period of 2022-23, this increases “nearly eightfold” to 13.1%.
The change suggests that the rapid increase in the heatwave-led CDHEs occurred after the global average temperature “surpasse[d] a certain temperature threshold”, the paper says.
This threshold is an absolute global average temperature of 14.3C, the authors estimate (based on an 11-year average), which the world passed around the year 2000.
Investigating the recent surge in heatwave-leading CDHEs further, the researchers find a “regime shift” in land-atmosphere dynamics “toward a persistently intensified state after the late 1990s”.
In other words, the way that drier soils drive higher surface temperatures, and vice versa, is becoming stronger, resulting in more heatwave-led compound events.
Daily data
The research has some advantages over other previous studies, Yeh says. For instance, the new work uses daily estimations of CDHEs, compared to monthly data used in past research. This is “important for capturing the detailed occurrence” of these events, says Yeh.
He adds that another advantage of their study is that it distinguishes the sequence of droughts and heatwaves, which allows them to “better understand the differences” in the characteristics of CDHEs.
Dr Meryem Tanarhte is a climate scientist at the University Hassan II in Morocco, and Dr Ruth Cerezo Mota is a climatologist and a researcher at the National Autonomous University of Mexico. Both scientists, who were not involved in the study, agree that the daily estimations give a clearer picture of how CDHEs are changing.
Cerezo-Mota adds that another major contribution of the study is its global focus. She tells Carbon Brief that in some regions, such as Mexico and Africa, there is a lack of studies on CDHEs:
“Not because the events do not occur, but perhaps because [these regions] do not have all the data or the expertise to do so.”
However, she notes that the reanalysis data used by the study does have limitations with how it represents rainfall in some parts of the world.
Compound impacts
The study notes that if CDHEs continue to intensify – particularly events where heatwaves are the precursors – they could drive declining crop productivity, increased wildfire frequency and severe public health crises.
These impacts could be “much more rapid and severe as global warming continues”, Yeh tells Carbon Brief.
Tanarhte notes that these events can be forecasted up to 10 days ahead in many regions. Furthermore, she says, the strongest impacts can be prevented “through preparedness and adaptation”, including through “water management for agriculture, heatwave mitigation measures and wildfire mitigation”.
The study recommends reassessing current risk management strategies for these compound events. It also suggests incorporating the sequences of drought and heatwaves into compound event analysis frameworks “to enhance climate risk management”.
Cerezo-Mota says that it is clear that the world needs to be prepared for the increased occurrence of these events. She tells Carbon Brief:
“These [risk assessments and strategies] need to be carried out at the local level to understand the complexities of each region.”
