Published

2 years ago

March 21, 2024

Alice Rush

Welcome to Carbon Brief’s China Briefing.

China Briefing handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.

Key developments

China’s equipment ‘trade-in’ act could reduce emissions

EQUIPMENT UPGRADE: On 13 March, the State Council, China’s top administrative authority, released an action plan to “promote the large-scale renewal of equipment and the trading-in of consumer goods”, reported state news agency Xinhua. According to the official document, “the scale of equipment investment, in areas including industry, agriculture, construction, transportation, education, culture, tourism and medical care, is planned to increase by more than 25% by 2027 compared with last year”. The upgrade in “key industries” will also help “reduce emissions” and “increase efficiency”, the document said. Chinese financial outlet Yicai said that, under the plan, the government also aims to double the volume of scrapped cars being recycled and increase the recycling of household appliances by 30%.

DOMESTIC DEMAND: Bloomberg said that the equipment upgrade action plan was a “pillar” of the government’s plan for economic expansion: “The programme will get support from the central government budget alongside tax breaks and targeted lending from banks…The statements didn’t specify the amount of government funding for the programme, which was first mentioned by President Xi Jinping in February as a way of boosting demand for goods.” The outlet quoted one economist saying the plan would add 0.7 percentage points to GDP growth each year until 2027, with most of the boost coming from support for car purchases. It reported an economist that advises the Chinese government saying that “China needs to boost domestic demand and adjust its industrial policy to counter rising criticism from the US and Europe”.

New rules to boost renewables

GUARANTEED PURCHASE: China’s top economic planner the National Development and Reform Commission (NDRC) released measures to provide “fully-guaranteed purchase of renewable energy electricity” from 1 April, industry news outlet BJX News reported. The rules update an existing policy from 2007, according to an analysis published by Jiemian, to clarify the scope of the “fully guaranteed purchase” programme. The report added that the purchase mechanism was designed to allocate “purchase responsibilities” based on “market behaviour (need)”. An analysis republished on WeChat by BJX News said that the rules also clarify there might be legal “consequences” for both the renewable energy producer and grids that purchase the power, if they failed to meet their targets of production and purchase. For power purchasers, it is their “responsibility” to purchase a certain amount of renewable power under the purchase mechanism, added the outlet.

CURTAILMENT TOLERATED: Elsewhere, local media in China suggested that the country may soon “end its policy of limiting [renewable power] installations when power curtailments rise above 5% of installed capacity for a given source”, Bloomberg reported, adding that “solar manufacturers have seen their shares rebound in recent days as speculation mounts”. It noted that the local outlets did not provide a source for this information. However, Yu Qing, chief executive of an electricity company in Hangzhou, wrote in an analysis on social media platform WeChat that he was sceptical about the benefit for solar. He said that while easing curtailment rules would allow some previously restricted projects to connect to the grid, it was only a “planning method” and that market signals and other constraints would still cause problems for solar developers.

Carbon market expands to aluminium industry

NEW JOINER: China’s national emissions trading scheme (ETS) is about to expand beyond the power sector to cover aluminium production, Chinese economic media outlet Caixin reported, but the details have not yet been finalised. Electrolytic aluminium production emits “the most carbon in the non-ferrous metals sector in China” and was responsible for 4.5% of the national total carbon emissions in 2020, added Caixin. (For more, see Carbon Brief’s Q&A on the ETS, China country profile and China Briefing of 8 February.)

WHAT TO EXPECT: Yan Qin, lead analyst at London Stock Exchange Group, told Carbon Brief that the consultation draft of the official document hinted the ETS will cover “indirect emissions from aluminium production”, related to the electricity used in the process. She added that, “as previously announced, industry sectors will only conduct ‘simulation trading’ at the beginning” of their entry into the ETS. The recently closed “two sessions” political gathering (see below) sent a signal that the ETS will involve more industries in the future, said an analysis published by the Chinese government-backed China clean development mechanism fund. Chinese media outlet Lintan-energy posted on its WeChat account that the cement industry is likely to be the third sector to join the ETS, after power and aluminium, and could enter the market by the end of this year.

Booming EV industry faces export difficulties

‘INTENSIFYING’ MARKET: The number of newly registered companies selling electric vehicles (EVs) in 2023 was six times higher than in 2019, said Chinese outlet Science and Technology Daily, citing a report on trends in the country’s manufacturing industry. China’s technology giant Xiaomi will start EV sales this month, according to BBC News, which said the move “comes as a price war in China’s EV market has been intensifying”. Meanwhile, the Financial Times reported on a “zombie” combustion-engine car factory in China – referring to unused production lines due to lack of demand – and said analysts were predicting hundreds more over the next decade “as buyers opt for EVs”. The head of Chinese EV giant BYD said “new energy vehicles” – including EVs and plug-in hybrids – made up 48% of new cars sales in China last week, Australian outlet the Driven reported, which quoted him saying that, “if it continues at this rate, I estimate that the penetration could cross 50% in the next three months”.

ROAD BUMPS: Despite the phenomenon of combustion car “zombie” factories, Volkswagen said it still believed the market for petrol-powered cars remains “lucrative” in smaller Chinese cities, said the Financial Times. The report added that poorer cities’ “lack of charging infrastructure” has frustrated EV industry growth. In related news Caixin, citing data from consultancy firm McKinsey China, reported that there was significant “disillusionment” among Chinese EV owners in 2023, with 22% stating they would not consider an EV for their next car, a sharp rise from 3% in 2022. It said the number of EV owners in small cities and rural areas regretting their purchase was at a “striking” 54%, due to inconvenient charging infrastructure.

EXPORT CONUNDRUM: Following investigations in the EU and US over the growth of Chinese EV exports, the UK is expected to launch its own probe, reported the Daily Telegraph, adding that transport secretary Mark Harper warned of “robust” trade sanctions to prevent what the newspaper called a “flood” of cheap Chinese EVs. Responding to the moves, He Yadong, spokesperson of China’s Ministry of Commerce, expressed “concerns” and added that China’s exports will not “damage” the EU market, reported BJX. Italy has already approached Chinese EV firms and setting up manufacturing in Italy would be “a big win for China’s auto industry”, which sees Italy as a “strategically positioned bridgehead” to get into European, African and Middle Eastern markets, reported Quartz.

Spotlight

What does the economic signal from China’s ‘two sessions’ mean for global emissions, geopolitics and trade?

Every spring, China’s top leaders use the annual political event lianghui (两会), which is also known as “two sessions”, to send signals to the world about how they would like to lead the country in the coming year.

As the “two sessions” drew to a close, experts, academics and foreign investors moved on to interpreting those signals and drafting strategies in response to them. In the previous issue of China Briefing, Carbon Brief analysed the “two sessions” domestic impact.

But, as the world’s second-largest economy and largest emitter, China’s influence does not stop there. This week, Carbon Brief looks into the bigger picture and asks leading experts to interpret how geopolitics, international trade and global emissions could be impacted. Their responses have been edited for clarity and length.

Dr Li Fang, China country director at World Resources Institute:

The most impressive takeaways from this year’s “two sessions”, for me, are the emphasis on how to vitalise development through internal-driven forces, how to improve its market allocation, and how to establish a more low-carbon, ecological and equitable business environment.

The discussion surrounding high-standard international economic and trade rules integrating considerations for climate, ecology and human welfare signals that China is exploring how to achieve a better combination of “effective government” and “efficient market”.

It is speeding up efforts to incorporate new production elements like carbon into its considerations. I believe there’s a growing inclination among China’s decision-makers to propose proactive strategies aligning economic development with addressing sustainability challenges like climate change and biodiversity loss. I believe there are emerging opportunities for markets and businesses to play more significant roles in China’s future transition.

Nis Grünberg, lead analyst at MERICS:

The “two sessions” did not offer anything surprising or substantively new, but confirmed the approach of the past months, prioritising energy security and economic stability before an accelerated, potentially disruptive, exit of fossil fuel. No new ambitions on emission cuts or coal consumption were announced.

On the positive side, officials plan to continue the massive buildup of renewable energy capacity and systematic support of clean-tech industries. In the short run, this means no quick departure from fossil fuel and large emissions, but, in the long run, the added renewables and China’s rapidly growing clean-tech sector will displace fossil fuel and bring down emissions.

The strong focus on technology apparent throughout the government work report means continuing the substantial political and economic investment in clean tech, which has become a key sector for growth. This also means there is no end in sight to trade conflicts over Chinese exports of electric vehicles (EVs), solar and batteries, which were singled out as success stories. China is signalling that it is not building its clean-tech industry for domestic consumption only, but seeks to double down and expand its export capacities.

Yao Zhe, policy analyst at Greenpeace East Asia:

At a time when China’s economy is in dire need of confidence, clean-energy industries offered a rare success story. At this year’s “two sessions”, renewable energy and EVs received the highest recognition for their contributions to economic growth and industrial upgrading. Where the low-carbon economy was once a catchy concept seeking political buy-in, it has now established itself. That signal is clear: China will not waste this potential. The global race for net-zero economies will only accelerate.

But while Chinese policymakers are eager to embrace the future, the past has proven tricky to discard. Coal power continues to receive special treatment, slotted as a safety net for China’s energy consumption, fueling concerns that China will miss its key 2025 climate targets. China’s carbon emissions may soon reach a tipping point. But this year’s “two sessions” did not reveal how or on what near-term timetable policymakers will navigate this historic change.

Ali Wyne, senior research and advocacy advisor on US-China relationship, International Crisis Group:

Chinese leaders emphasised cultivating “new productive forces“. [“Productive forces” is a central idea in Marxist theory referring to the combination of human labour with technology and infrastructure, explained a recent article in the Hong Kong-based South China Morning Post. It added that Chinese president Xi Jinping coined the phrase “new productive forces” last year and quoted him saying it means “advanced productivity freed from traditional economic growth models’, feature “high technology, high efficiency and high quality” and “align with the country’s new development philosophy”.]

With [leaders] emphasising the concept, the “two sessions” underscored China’s hope that investing in leading-edge industries including advanced manufacturing, artificial intelligence and renewable energy will sustain its growth more reliably than investing in traditional drivers, such as real estate.

Domestic demand is unlikely to keep pace with the new capacity that this push generates, however, so economic frictions between China and advanced industrial democracies, especially in the West, are poised to intensify further.

Watch, read, listen

WOMEN AND CLIMATE CHANGE: Chinese climate and investment consultancy firm 2060 Advisory produced a podcast on International Women’s Day about female entrepreneurship in the climate industry.

CLIMATE COOPERATION: The Legal Planet, a climate policy and environmental law blog, released a video recording of Joanna Lewis, writer of the book “Cooperating for the Climate”, giving a lecture on how to cooperate with China at UCLA’s Emmett Institute.

‘TWO SESSIONS’ AND JAPAN: UK thinkthank Chatham House recorded a podcast discussing China’s National People’s Congress – the legislative body that hosted the recent “two sessions” – and China’s relationship with its close neighbour Japan.

STEEL EMISSIONS: Hong Kong-based South China Morning Post published an article based on data from US thinktank Global Energy Monitor (GEM), which found China’s steel sector could cut carbon emissions by more than 10% in 2025 with a “faster shift to clean production”.

New science

Health cost impacts of extreme temperature on older adults based on city-level data from 28 provinces in China
Environmental Research Letters

New research into the impact of extreme temperatures on medical costs for “older adults” found that in western Chinese provinces, costs will more than triple by 2030, compared to a 2016-20 baseline. The authors found that under the very high emissions RCP8.5 scenario, older adults could cost 2.7tn Chinese yuan by 2050. However, costs can be reduced by 4.6% and 7.4% by limiting emissions in line with the medium-emissions RCP4.5 and low-emissions RCP2.6 scenarios, respectively.

Assessing the supply risks of critical metals in China’s low-carbon energy transition
Global Environmental Change

China has “grown increasingly susceptible to disruptions” in critical metal supplies as it transitions to low-carbon technologies, according to a new study. The nation is the largest consumer and importer of these metals, leaving it vulnerable to geopolitical shifts and volatile prices, the researchers say. They model supply risks for 30 metals and conclude that the risk facing China for nine metals – including copper and chromium – “exceeds that of other countries that consume large amounts of critical metals”.

China Briefing is researched and written by Wanyuan Song, Anika Patel and other contributors. Please send tips and feedback to china@carbonbrief.org

The post China Briefing 21 March: New ‘trade-in’ policy; China ETS expands; ‘Two sessions’ geopolitical impact appeared first on Carbon Brief.

China Briefing 21 March: New ‘trade-in’ policy; China ETS expands; ‘Two sessions’ geopolitical impact

Climate Change

Climate Activists Stage Mock Funeral for Landmark Climate Rule

Published

7 hours ago

April 15, 2026

Alice Rush

The Trump EPA’s repeal of the 2009 endangerment finding revokes the agency’s authority to regulate climate pollution. Environmental activists are mourning the loss while vowing to resurrect it.

By Liza Gross

A procession of mourners representing sea level rise, melting permafrost, ecocide and other climate calamities grieved the demise of a groundbreaking climate rule outside the Environmental Protection Agency’s Region 9 headquarters in downtown San Francisco on Tuesday.

Climate Activists Stage Mock Funeral for Landmark Climate Rule

Climate Change

IEA slashes pre-war oil demand forecast by nearly a million barrels per day

Published

8 hours ago

April 15, 2026

Alice Rush

Global oil demand is expected to be almost one million barrels per day less than was forecast before the Iran war, as shortages and soaring costs prompt drastic cutbacks by consumers and businesses, a report by the International Energy Agency (IEA) said on Wednesday.

With the closure of the Strait of Hormuz choking off supplies and keeping prices high, less oil is being used to make products such as jet fuel, LPG cooking gas and petrochemicals, the Paris-based IEA said in its monthly oil report, forecasting the biggest quarterly demand drop since the COVID pandemic.

The Iran war “upends our global outlook”, the government-backed agency said, adding that it now expects oil demand to shrink by 80,000 barrels per day in 2026 from last year.

Before the conflict began, the IEA said in February it expected oil demand to rise by 850,000 barrels per day this year, meaning the difference between the pre-war and current estimates is 930,000 barrels a day, or 340 million barrels a year.

That could have a significant impact on the outlook for planet-heating carbon emissions this year.

At an intensity of 434 kg of carbon dioxide per barrel of oil – the estimate used by the US Environmental Protection Agency – the annual reduction in carbon dioxide emissions from oil for 2026, compared with the pre-war forecast, is similar to the amount emitted by the Philippines each year.

Harry Benham, senior advisor at Carbon Tracker, told Climate Home News that he expects at least half of the reduction in oil demand to be permanent because of efficiency gains, behavioural change and faster electrification.

The oil shock is leading to oil being replaced, especially in transport, with electricity and other fuels, just as past oil shocks drove lasting reductions in consumption, he said. “The shock doesn’t delay the transition – it reinforces it,” he added.

Demand takes a hit

While demand for oil has fallen significantly, supplies have fallen even further. Supply in March was 10 million barrels a day less than February, the IEA said, calling it the “largest disruption in history”.

This forecast relies on the assumption that regular deliveries of oil and gas from the Middle East will resume by the middle of the year, the IEA said, although the prospects for this “remain unclear at this stage”.

Apr 9, 2026

Energy

Italy pushes coal exit back after gas prices rise

Analysts say the move sends a negative signal, but its impact will be limited given coal’s marginal role in Italy’s energy mix

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News

Charging worries, high prices put brakes on EV growth in Bangladesh

Sales of e-bikes and rickshaws are up amid queues at fuel stations, but a lack of charging infrastructure and high prices still deter many Bangladeshis from going electric

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Apr 15, 2026

Comment

Fossil Free Zones can be on-ramps to the clean energy transition

Oil and gas blocks overlap with a fifth of forests in the Amazon, Congo Basin and SE Asia – policies are needed to transition away from fossil fuels and halt deforestation together

Read more

Last month, US Energy Secretary Chris Wright told the CERAWeek oil industry conference that prices were not high enough to lead to permanent reductions in demand for oil, known as demand destruction.

But the IEA said on Wednesday that “demand destruction will spread as scarcity and higher prices persist”.

Industries contributing to weaker demand for oil include Asian petrochemical producers, who are cutting production as oil supplies dry up, the report said, while consumers are cutting back on liquefied petroleum gas (LPG), which is mainly used as a cooking gas in developing countries, the IEA said.

Flight cancellations caused by the war have dampened demand for oil-based jet fuel, the IEA said. As well as cancellations caused by risk from the conflict itself, airports have warned that fuel shortages could lead to disruption.

Across the world, governments, businesses and consumers have sought to reduce their oil use after the war. The government of Pakistan has cut the speed limit on its roads, so that people drive at a more fuel-efficient speed, and Laos has encouraged people to work from home to preserve scarce petrol and diesel.

Nepal’s EV revolution pays off as oil crisis causes pain at the pumps

Consumers in Bangladesh are seeking electric vehicles (EVs) to avoid fuel queues and, in Nigeria, more people are seeking to replace petrol and diesel generators with solar panels, Climate Home News has reported.

In the longer term, the European Union is considering cutting taxes on electricity to help it replace fossil fuels and France is promoting EVs and heat pumps.

IEA urged to help “future-proof” economies

Meanwhile, the IEA came under fire last week from energy security experts, including former military chiefs, who signed an open letter in which they accused the agency of offering “only a temporary response to turbulent markets”, calling for stronger structural action “to future-proof our economies”.

They said that besides releasing emergency oil stocks and offering advice on how to reduce oil demand in the short term, the IEA should show countries how to reduce their exposure to volatile oil and gas markets.

The IEA has also been under pressure from the Trump administration to talk less about the transition away from fossil fuels.

This article was amended on 15 April 2026 to correct the drop in 2026 forecast oil demand from “nearly a billion” to “nearly a million”

The post IEA slashes pre-war oil demand forecast by nearly a million barrels per day appeared first on Climate Home News.