Wealthy nations have committed to providing billions of dollars of “climate finance” to developing countries, as part of the global effort to tackle climate change.
At the COP29 climate summit, nations must decide on a new global goal to replace the existing target of $100bn each year.
Delivering this money is widely viewed as important for helping vulnerable nations in the global south and maintaining trust between countries in UN climate talks.
Yet, for decades, climate finance has been plagued by accusations of exaggerated numbers, poor transparency and money going to “questionable” places. Much of this stems from a lack of consensus on what counts as “climate finance”.
Most climate finance comes from the aid budgets of a handful of developed states, including western Europe, the US and Japan. Governments use their own criteria to assess “climate finance”, often prompting criticism from civil society groups and developing countries.
Most climate finance goes towards legitimate causes. However, analysis of the available data reveals examples of countries reporting funds going to, say, fossil fuels and airports. Some donors report finance that may never be spent and others hand out loans that, ultimately, see them making a profit.
These activities are all allowed under the UN climate finance system.
As countries gather to negotiate a new climate-finance target at COP29 in Baku, Azerbaijan, Carbon Brief – in no particular order – explores six of the issues that make climate finance such a “wild west”.
- There is no agreed definition of what counts as ‘climate finance’
- Climate-finance accounting is not consistent or transparent
- Some climate finance is not helping to tackle climate change
- Reliance on loans ‘overstates’ climate finance flows
- Countries are reporting money that may never get spent
- Climate finance is used to boost donors’ economic interests
1. There is no agreed definition of what counts as ‘climate finance’
There is no universal agreement on what should, or should not, count towards the international “climate finance” provided by developed countries to developing countries.
Unofficial definitions, including those of the UN Standing Committee on Finance (SCF) and the Organisation for Economic Co-operation and Development (OECD), broadly agree that climate finance should support activities that cut emissions or help adapt to climate change.
As for the types of finance that should count, nations decided that the $100bn target would cover “a wide variety of sources”, including public money, support via multilateral development banks (MDBs) and private investment spurred by public spending.
However, the kinds of activities and finance streams falling into these broad categories are open to interpretation. In practice, governments of developed countries use their own methodologies and set their own rules when reporting climate finance.
Developed countries also pledged to provide climate finance that is “new and additional” – a term often taken to mean extra funding on top of other aid programmes. However, this framing is contested and, in practice, much of the reported climate finance comes from existing development budgets.
Prof Romain Weikmans, an international climate-finance researcher at the Free University of Brussels, tells Carbon Brief that developed countries have “diverging understandings on what should count as climate finance and on how to count it”. He adds that reporting requirements negotiated at the UN “allow countries to remain vague”.
Many expert analyses have concluded that self-reporting by governments, facing political pressure to act on climate change, contributes to an “overestimation” of total climate finance.
While it was widely reported that, based on OECD data, developed countries met the $100bn target two years late in 2022, Weikmans says the lack of a universal definition “makes it impossible to assess whether the $100bn has been met or not”.
The chart below shows how different assumptions about “climate finance” by key financial organisations lead to divergent estimates of how much has been provided.
Igor Shishlov, head of climate finance at Perspectives Climate Group, tells Carbon Brief that the lack of clarity contributes to an “erosion of trust” in climate negotiations between developed and developing countries.
These tensions have existed since the start of UN climate negotiations in the 1990s. An attempt by COP presidencies in 2015 to “reassure” nations about progress towards the $100bn goal with a special OECD report ended up sparking more disputes.
(A response at the time from the Indian Ministry of Finance – reflected in the chart above – estimated that climate finance was 26 times smaller than the OECD estimate. This was based on money that had been paid out, rather than pledged, from climate funds deemed “new and additional”.)
Efforts since then to agree on a definition have failed. Joe Thwaites, a senior advocate on international climate finance at NRDC, tells Carbon Brief that both developed and developing countries contribute to this deadlock:
“Developed countries oppose a definition that would restrict climate finance to certain financial instruments, while petrostates oppose a definition that would exclude counting funding for fossil-fuel projects as climate finance.”
As countries negotiate the “new collective quantified goal” (NCQG) for climate finance at COP29, observers say it is unlikely that nations will make significant progress on a comprehensive definition.
2. Climate-finance accounting is not consistent or transparent
The systems for climate-finance accounting have been described as full of “inconsistencies” and “discrepancies”, as well as “prone to huge overestimations”.
Joseph Kraus, senior policy director at the ONE Campaign, which has attempted its own assessment of climate finance based on available data, tells Carbon Brief:
“Climate finance accounting is like the wild west: Every climate finance provider makes its own rules about what to count. Predictably, that makes it virtually impossible to get accurate numbers.”
Governments report their climate-finance contributions to three major international bodies: the OECD; the UNFCCC; and, in the case of EU member states, the European Commission.
Most climate finance is drawn from developed countries’ aid budgets and they register their bilateral contributions in the OECD Creditor Reporting System (CRS). Officials then mark projects as being related to climate mitigation or adaptation.
This “Rio marker system” was implemented in 1998 to assess whether aid projects align with the three “Rio Conventions” on climate change, biodiversity and desertification.
The tags were never meant to define the amount of “climate finance” counted under the UN system. They have effectively filled the gap left by the lack of official guidance.
Most developed countries use the data submitted to the OECD CRS to guide what they report as “official” climate finance in reports to the UNFCCC. Only a handful, including the UK and the US, assess projects on a more case-by-case basis.
Governments use the Rio Markers to calculate climate finance in different ways. Most say they count 100% of the projects where climate has been marked as a “principal” objective towards their UNFCCC totals.
Projects where climate is deemed “significant”, implying a partial focus on climate, vary a lot more. Countries state that they report between 30% and 50% of these projects as climate finance.
Analysts have warned that the blanket application of fixed percentages is arbitrary and can lead to figures being inflated. They also note that, in practice, UNFCCC and OECD figures are difficult to compare and do not always match up in the ways countries report them.
The figures for bilateral climate finance that developed countries report to the UNFCCC are used as the basis for the OECD’s annual reports of progress towards the $100bn goal. They are combined with the OECD’s figures for MDBs, multilateral funds and the private sector.
(These are generally cited as the definitive figures for $100bn tracking, although they are contested. The OECD does not provide a breakdown of contributors to the target and its reports are released two years in arrears, making real-time scrutiny difficult.)
While the OECD screens projects reported in its system, it has no power to amend those that have been marked “incorrectly”. Analysis by Development Initiatives of climate-related aid projects found countries, such as France, Japan and Australia, frequently tagged projects that “deviated” from OECD guidance – those that include fossil fuels, for example.
Independent audits in Denmark, the Netherlands and the EU have all found significant evidence of “climate” projects being mislabelled, or their relevance overstated.
Reflecting on the wider state of climate-finance accounting, Thwaites tells Carbon Brief:
“I think understanding of climate finance is getting better, both through improvements in official reporting and through greater scrutiny from journalists and civil society. But as those third-party audits have shown, there is much room for improvement.”
All of this is further complicated by the lack of transparency from governments, when reporting their official climate-finance contributions to the UNFCCC. The lack of detail in submissions makes it difficult to assess the relevance of each project for tackling climate change.
For example, NGO FragDenStaat has documented its difficulties evaluating the German government’s claim that its climate finance reached a “record level” in 2022.
Poor transparency makes it difficult for those in developing countries as well. Turkish banks have received millions of dollars in climate finance from Germany and France, but there is little information provided either by the banks or the donors on how it is used.
“Citizens have no access to any information about these public funds,” Özgür Gürbüz, campaign director of the Turkish NGO Ekosfer, tells Carbon Brief.
Sehr Raheja, a programme officer specialising in climate finance at the Centre for Science and Environment in India, tells Carbon Brief:
“Implications…include the inability to clearly hold actors accountable, or even first understand the complete reality of the situation of climate finance for developing countries.”
Such scrutiny is important. The UK has traditionally been viewed as one of the more rigorous climate-finance reporters, but the government loosened its accounting system in 2023 to bring it more in line with those of less strict donors.
In doing so, an independent audit found that the UK added an extra £1.7bn ($2.2bn) to its projected climate finance spending without contributing any new funds, as the chart below shows.
3. Some climate finance is not helping to tackle climate change
Climate-finance databases contain details of tens of thousands of projects operating in developing countries around the world.
Most of these projects have clear links to tackling climate change. They might, for example, support solar power projects in Kenya, the construction of a train line in India, or improving the climate resilience of drought-prone farms in Guatemala.
However, among them are aid projects that may bring benefits to the target countries, but have little or no relevance for tackling climate change. Some could even undermine such efforts, by supporting fossil fuels and carbon-intensive sectors.
Stacy-ann Robinson, a climate-adaptation finance researcher at Emory University in the US state of Georgia, tells Carbon Brief that some climate finance “has been going to questionable places to support objectives that are clearly not related to…reducing vulnerability or increasing resilience”.
Some assessments indicate that “inaccurately” categorised climate projects are relatively common among the largest donors, notably Japan and France. NGOs have also identified many “troubling and high-emitting projects” reported as climate finance by MDBs.
Over the years, researchers and journalists have unearthed climate finance being used to, for example, buy uniforms for park rangers, support anti-terrorism programmes and fund luxury hotels.
However, the overall lack of transparency makes it difficult to ascertain exactly how much money from these “questionable” projects is feeding into the official totals reported to the OECD.
An investigation by Reuters in 2023 uncovered $3bn of finance reported to the UNFCCC that had gone towards “programmes that do little or nothing to ease the effects of climate change”. However, Reuters noted that its review only covered around 10% of countries’ submissions.
Carbon Brief has identified at least $6.5bn of finance attributed to projects involving coal, oil and gas that has been tagged as climate-related in the OECD’s climate-related aid database, over the decade from 2012-2021. If countries have followed their own guidelines for reporting climate finance, much of this money will have been reported to the UNFCCC.
Japan is frequently cited for labelling fossil-fuel finance as climate finance, including billions of dollars for coal- and gas-fired power plants in places such as Bangladesh and Indonesia.
However, Carbon Brief’s assessment of the data reveals that some European countries have also been reporting smaller amounts of fossil fuel-related “climate finance”.
For example, Sweden counted around €5m for a gas-fired power plant in Mozambique between 2012 and 2015, while Germany supported a gas power plant in the Ivory Coast in 2022. In both cases, the governments have confirmed to Carbon Brief that projects marked in the OECD registry were also reported to the UNFCCC.
Defenders of fossil-fuel finance argue that developing countries need investment in cleaner or more efficient fossil-fuel infrastructure – and that this does, in fact, reduce emissions. Others argue that these funds simply should not be labelled as climate-related.
Another example of questionable climate finance comes from the French development finance institution Proparco, which provided a €20m loan to Cabo Verde Airports in 2023, a subsidiary of French construction company Vinci Group.
This project was too recent to have been officially reported to the UNFCCC. However, Proparco has reported that 20% of its financing for the project would lead to “climate co-benefits”, such as “renewable energy investments, the installation of LED lighting and the replacement of air-conditioning systems”.
At the same time, Vinci Group says its other goal is to help Cabo Verde boost tourism through increased traffic at its airports. The company has celebrated “record passenger numbers” at its Cabo Verde airports, where traffic increased by 17% year-on-year in August thanks to rising passenger flows from western Europe.
4. Reliance on loans ‘overstates’ climate finance flows
Most climate finance is delivered as loans to developing countries and their institutions. This is one of the most contentious issues in international climate-finance reporting.
More than half of the bilateral finance committed by wealthy countries – and around three-quarters of the investments by MDBs – comes in the form of loans, as shown by the red bars in the figure below.
In fact, the nations that consistently rank among the largest climate-finance providers – Japan, France and the US – all provide the majority of their climate finance as loans.
Loans have to be paid back, leading to climate finance returning to contributor countries as profits, through repayments plus interest. This has led to accusations by civil society groups that developed countries “overstate” their climate finance by leaning heavily on loans.
Public climate-finance institutions generally offer loans at lower-than-market “concessional” rates, or else with longer repayment periods.
However, Carbon Brief analysis shows that at least $18bn of official climate finance reported by developed countries between 2015 and 2020 – roughly 10% of the total – was “non-concessional”, as the chart below shows. (While less desirable than loans officially described as “concessional”, these public institution loans are still generally offered at better-than-market rates.)
The reliance on loans is especially controversial amid the debt crisis facing many developing countries.
The world’s least-developed countries and small-island developing states collectively spent twice as much repaying debts in 2022 as they received in climate finance, according to analysis by the International Institute for Environment and Development (IIED).
There has been considerable pressure from civil society, researchers, developing countries and even UN climate chief Simon Stiell to increase the “concessionality” of climate finance.
NGOs, such as Oxfam, argue that climate-related loans should be reported as “grant equivalents”, rather than at face value. This is a measure of how much the developed-country government is subsidising the loan.
Since 2018, development aid reported in the OECD’s database has been expressed in grant equivalents in order to better communicate the “financial effort” being made by donors.
However, when the OECD reports progress towards the $100bn climate-finance goal, drawing from developed countries’ reports to the UNFCCC, it still uses face-value figures for loans. This is one of the key reasons that developing countries have disputed these figures.
Oxfam releases an annual report that drastically downgrades the OECD figures, primarily by using grant equivalent values. Rather than exceeding the $100bn goal in 2022, the NGO argues that developed countries’ true financial effort only amounted to around $28-35bn that year.
From 2024, countries will be able to start reporting loans in grant-equivalent amounts to the UNFCCC in the newly introduced “biennial transparency reports” (BTRs) that all nations must file under the Paris Agreement. However, they are not required to do so, meaning it is unlikely that an “official” total for grant-equivalent loans will be available.
5. Countries are reporting money that may never get spent
Climate finance only has an impact when it is provided – or “disbursed” – to people and institutions who can use the money.
Yet some countries, including France, Germany and Denmark, choose not to report the amount of climate finance they have actually provided to developing countries.
Instead, they record the amount they have “committed”, or else a mix of committed and provided sums. These numbers feed into the totals reported by national governments and they count towards the $100bn target, even if the money has not left the donor country.
The OECD defines a commitment as a “firm written obligation by a government or official agency”. Over time, the amount of money provided should match the amount committed.
But between a nation committing money and handing it out, all sorts of things can change, as Mattias Söderberg, global climate lead at the NGO DanChurchAid, tells Carbon Brief:
“In some situations, projects are interrupted. Changes in the context or in the projects or within partners, for example, when there was a coup in Mali, means that committed funds may not be disbursed as planned.”
Climate projects could also collapse because a new government in the donor country decides to cancel the project for political or financial reasons. Other issues, such as shifting exchange rates, can also lead to divergences between committed and disbursed funds.
The reliance on commitments to meet climate-finance targets has drawn criticism. In its 2015 critique of progress towards the $100bn target, the Indian government said it needed “actual disbursements” rather than “promises, pledges or multi-year commitments about promised sums in the future”.
An analysis by ONE Campaign of climate-related aid reported to the OECD found that, of $616bn committed since 2013, data was missing for $69bn of disbursements and another $228bn had not yet been disbursed. (This data is not a direct reflection of “climate finance” under the UN, but it is a rough proxy.)
Some lag between commitments and payments is to be expected. Countries tend to commit to big climate-finance projects and then gradually pay out the money over time.
However, civil society groups have highlighted “significant differences” between committed and provided sums.
In recent years, EU member states have had to start reporting both commitments and disbursements. The chart below shows the sizable gap between the money Germany, France, the Netherlands, Sweden and Italy pledge and the amount they provide.
(It is worth noting that there is significant variability. Sweden sometimes provides more finance than it commits, whereas, in two years, France did not report disbursements at all.)
Identifying climate-finance projects that have completely failed to pay out is difficult. Governments are not obliged to report to the UNFCCC when they have provided finance and neither do they have to update the record to reflect any cancellations or changes.
Reuters identified three French climate projects between 2016-2018 – collectively worth half a billion dollars – that had been cancelled. This equates to 4% of France’s climate finance over this period.
“Commitments look better, so more effort is put into reporting them than into tracking actual disbursements,” Kraus from ONE Campaign tells Carbon Brief.
Civil society groups argue that all governments should start reporting disbursements to reduce the risk of “over-reporting”.
6. Climate finance is used to boost donors’ economic interests
Developed nations provide climate finance in a variety of different ways.
In projects that involve building infrastructure, such as windfarms and train lines, companies must be enlisted to work on the engineering and construction. Often, donor governments will work with firms based in their own countries to carry out climate projects.
The French Development Agency (AFD) has reported that the majority of its aid is entrusted to projects involving at least one French “economic actor”, resulting in significant economic benefits for the country.
Meanwhile, one-third of Japanese climate loans are given with the condition that Japanese companies are hired to work on the project, according to Reuters analysis of OECD data.
Stacy-ann Robinson of Emory University notes that this is not a “black-and-white” issue, as sometimes a company from the donor nation will be best placed to carry out the project. However, she notes that it has implications for capacity building in developing countries.
France has committed billions of dollars towards rail infrastructure in developing countries. Given France’s global leadership in the sector, a significant share of these projects have been implemented by French companies.
Project-level data about which companies are awarded contracts is not reported to the UNFCCC. However, one climate-finance project identified by Carbon Brief involves €230m worth of loans provided by AFD for an express regional train in the Senegalese capital, Dakar. This was co-funded with an extra €1bn from development banks.
While the project has clear benefits for the decarbonisation of transport in Dakar, it also helped several French companies expand their activities in the region.
These include Eiffage, which built the infrastructure; Systra, which provided engineering consultancy services; Thales and Engie, which together won a €225m project to design and build the electricity infrastructure for the train; and Alstom, which supplied trains.
Reflecting on this issue, Robinson tells Carbon Brief:
“Perhaps we need regulations around the conditionalities associated with [climate] finance that would reduce the possibility of only French companies, for example, being able to work on these climate-finance projects.”
Another way climate finance might benefit donor nations is through projects that involve hiring consultants and other experts based domestically. One paper notes how such projects can result in money “flowing back to developed countries”.
Previous Carbon Brief analysis found that one-tenth of the climate funds disbursed by the UK between 2010 and 2023 had gone to private consultancies, largely based in the UK.
This article was developed with the support of Journalismfund Europe. Carbon Brief worked with journalists based in France, Germany, Sweden and Turkey, and they provided input on how different countries have been providing international climate finance.
The post COP29: Six key reasons why international climate finance is a ‘wild west’ appeared first on Carbon Brief.
COP29: Six key reasons why international climate finance is a ‘wild west’
Greenhouse Gases
DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss?
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Secrets and layoffs
UNLAWFUL PANEL: A federal judge ruled that the US energy department “violated the law when secretary Chris Wright handpicked five researchers who rejected the scientific consensus on climate change to work in secret on a sweeping government report on global warming”, reported the New York Times. The newspaper explained that a 1972 law “does not allow agencies to recruit or rely on secret groups for the purposes of policymaking”. A Carbon Brief factcheck found more than 100 false or misleading claims in the report.
DARKNESS DESCENDS: The Washington Post reportedly sent layoff notices to “at least 14” of its climate journalists, as part of a wider move from the newspaper’s billionaire owner, Jeff Bezos, to eliminate 300 jobs at the publication, claimed Climate Colored Goggles. After the layoffs, the newspaper will have five journalists left on its award-winning climate desk, according to the substack run by a former climate reporter at the Los Angeles Times. It comes after CBS News laid off most of its climate team in October, it added.
WIND UNBLOCKED: Elsewhere, a separate federal ruling said that a wind project off the coast of New York state can continue, which now means that “all five offshore wind projects halted by the Trump administration in December can resume construction”, said Reuters. Bloomberg added that “Ørsted said it has spent $7bn on the development, which is 45% complete”.
Around the world
- CHANGING TIDES: The EU is “mulling a new strategy” in climate diplomacy after struggling to gather support for “faster, more ambitious action to cut planet-heating emissions” at last year’s UN climate summit COP30, reported Reuters.
- FINANCE ‘CUT’: The UK government is planning to cut climate finance by more than a fifth, from £11.6bn over the past five years to £9bn in the next five, according to the Guardian.
- BIG PLANS: India’s 2026 budget included a new $2.2bn funding push for carbon capture technologies, reported Carbon Brief. The budget also outlined support for renewables and the mining and processing of critical minerals.
- MOROCCO FLOODS: More than 140,000 people have been evacuated in Morocco as “heavy rainfall and water releases from overfilled dams led to flooding”, reported the Associated Press.
- CASHFLOW: “Flawed” economic models used by governments and financial bodies “ignor[e] shocks from extreme weather and climate tipping points”, posing the risk of a “global financial crash”, according to a Carbon Tracker report covered by the Guardian.
- HEATING UP: The International Olympic Committee is discussing options to hold future winter games earlier in the year “because of the effects of warmer temperatures”, said the Associated Press.
54%
The increase in new solar capacity installed in Africa over 2024-25 – the continent’s fastest growth on record, according to a Global Solar Council report covered by Bloomberg.
Latest climate research
- Arctic warming significantly postpones the retreat of the Afro-Asian summer monsoon, worsening autumn rainfall | Environmental Research Letters
- “Positive” images of heatwaves reduce the impact of messages about extreme heat, according to a survey of 4,000 US adults | Environmental Communication
- Greenland’s “peripheral” glaciers are projected to lose nearly one-fifth of their total area and almost one-third of their total volume by 2100 under a low-emissions scenario | The Cryosphere
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Solar power, electric vehicles and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment, according to new analysis for Carbon Brief (shown in blue above). Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP) – comparable to the economies of Brazil or Canada, the analysis said.
Spotlight
Can humans reverse nature decline?
This week, Carbon Brief travelled to a UN event in Manchester, UK to speak to biodiversity scientists about the chances of reversing nature loss.
Officials from more than 150 countries arrived in Manchester this week to approve a new UN report on how nature underpins economic prosperity.
The meeting comes just four years before nations are due to meet a global target to halt and reverse biodiversity loss, agreed in 2022 under the landmark “Kunming-Montreal Global Biodiversity Framework” (GBF).
At the sidelines of the meeting, Carbon Brief spoke to a range of scientists about humanity’s chances of meeting the 2030 goal. Their answers have been edited for length and clarity.
Dr David Obura, ecologist and chair of Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)
We can’t halt and reverse the decline of every ecosystem. But we can try to “bend the curve” or halt and reverse the drivers of decline. That’s the economic drivers, the indirect drivers and the values shifts we need to have. What the GBF aspires to do, in terms of halting and reversing biodiversity loss, we can put in place the enabling drivers for that by 2030, but we won’t be able to do it fast enough at this point to halt [the loss] of all ecosystems.
Dr Luthando Dziba, executive secretary of IPBES
Countries are due to report on progress by the end of February this year on their national strategies to the Convention on Biological Diversity [CBD]. Once we get that, coupled with a process that is ongoing within the CBD, which is called the global stocktake, I think that’s going to give insights on progress as to whether this is possible to achieve by 2030…Are we on the right trajectory? I think we are and hopefully we will continue to move towards the final destination of having halted biodiversity loss, but also of living in harmony with nature.
Prof Laura Pereira, scientist at the Global Change Institute at Wits University, South Africa
At the global level, I think it’s very unlikely that we’re going to achieve the overall goal of halting biodiversity loss by 2030. That being said, I think we will make substantial inroads towards achieving our longer term targets. There is a lot of hope, but we’ve also got to be very aware that we have not necessarily seen the transformative changes that are going to be needed to really reverse the impacts on biodiversity.
Dr David Cooper, chair of the UK’s Joint Nature Conservation Committee and former executive secretary of the Convention on Biological Diversity
It’s important to look at the GBF as a whole…I think it is possible to achieve those targets, or at least most of them, and to make substantial progress towards them. It is possible, still, to take action to put nature on a path to recovery. We’ll have to increasingly look at the drivers.
Prof Andrew Gonzalez, McGill University professor and co-chair of an IPBES biodiversity monitoring assessment
I think for many of the 23 targets across the GBF, it’s going to be challenging to hit those by 2030. I think we’re looking at a process that’s starting now in earnest as countries [implement steps and measure progress]…You have to align efforts for conserving nature, the economics of protecting nature [and] the social dimensions of that, and who benefits, whose rights are preserved and protected.
Neville Ash, director of the UN Environment Programme World Conservation Monitoring Centre
The ambitions in the 2030 targets are very high, so it’s going to be a stretch for many governments to make the actions necessary to achieve those targets, but even if we make all the actions in the next four years, it doesn’t mean we halt and reverse biodiversity loss by 2030. It means we put the action in place to enable that to happen in the future…The important thing at this stage is the urgent action to address the loss of biodiversity, with the result of that finding its way through by the ambition of 2050 of living in harmony with nature.
Prof Pam McElwee, Rutgers University professor and co-chair of an IPBES “nexus assessment” report
If you look at all of the available evidence, it’s pretty clear that we’re going to keep experiencing biodiversity decline. I mean, it’s fairly similar to the 1.5C climate target. We are not going to meet that either. But that doesn’t mean that you slow down the ambition…even though you recognise that we probably won’t meet that specific timebound target, that’s all the more reason to continue to do what we’re doing and, in fact, accelerate action.
Watch, read, listen
OIL IMPACTS: Gas flaring has risen in the Niger Delta since oil and gas major Shell sold its assets in the Nigerian “oil hub”, a Climate Home News investigation found.
LOW SNOW: The Washington Post explored how “climate change is making the Winter Olympics harder to host”.
CULTURE WARS: A Media Confidential podcast examined when climate coverage in the UK became “part of the culture wars”.
Coming up
- 2-8 February: 12th session of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), Manchester, UK
- 8 February: Japanese general election
- 8 February: Portugal presidential election
- 11 February: Barbados general election
- 11-12 February: UN climate chief Simon Stiell due to speak in Istanbul, Turkey
Pick of the jobs
- UK Met Office, senior climate science communicator | Salary: £43,081-£46,728. Location: Exeter, UK
- Canadian Red Cross, programme officer, Indigenous operations – disaster risk reduction and climate change adaptation | Salary: $56,520-$60,053. Location: Manitoba, Canada
- Aldersgate Group, policy officer | Salary: £33,949-£39,253. Location: London (hybrid)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss? appeared first on Carbon Brief.
Greenhouse Gases
China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK
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
Solar and wind eclipsed coal
‘FIRST TIME IN HISTORY’: China’s total power capacity reached 3,890 gigawatts (GW) in 2025, according to a National Energy Administration (NEA) data release covered by industry news outlet International Energy Net. Of this, it said, solar capacity rose 35% to 1,200GW and wind capacity was up 23% to 640GW, while thermal capacity – which is mostly coal – grew 6% to just over 1,500GW. This marks the “first time in history” that wind and solar capacity has outranked coal capacity in China’s power mix, reported the state-run newspaper China Daily. China’s grid-related energy storage capacity exceeded 213GW in 2025, said state news agency Xinhua. Meanwhile, clean-energy industries “drove more than 90%” of investment growth and more than half of GDP growth last year, said the Guardian in its coverage of new analysis for Carbon Brief. (See more in the spotlight below.)
DAWN FOR SOLAR: Solar power capacity alone may outpace coal in 2026, according to projections by the China Electricity Council (CEC), reported business news outlet 21st Century Business Herald. It added that non-fossil sources could account for 63% of the power mix this year, with coal falling to 31%. Separately, the China Renewable Energy Society said that annual wind-power additions could grow by between 600-980GW over the next five years, with annual additions of 120GW expected until 2028, said industry news outlet China Energy Net. China Energy Net also published the full CEC report.
STATE MEDIA VOICE: Xinhua published several energy- and climate-related articles in a series on the 15th five-year plan. One said that becoming a low-carbon energy “powerhouse” will support decarbonisation efforts, strengthen industrial innovation and improve China’s “global competitive edge and standing”. Another stated that coal consumption is “expected” to peak around 2027, with continued “growth” in the power and chemicals sector, while oil has already peaked. A third noted that distributed energy systems better matched the “characteristics of renewable energy” than centralised ones, but warned against “blind” expansion and insufficient supporting infrastructure. Others in the series discussed biodiversity and environmental protection and recycling of clean-energy technology. Meanwhile, the communist party-affiliated People’s Daily said that oil will continue to play a “vital role” in China, even after demand peaks.
Starmer and Xi endorsed clean-energy cooperation
CLIMATE PARTNERSHIP: UK prime minister Keir Starmer and Chinese president Xi Jinping pledged in Beijing to deepen cooperation on “green energy”, reported finance news outlet Caixin. They also agreed to establish a “China-UK high-level climate and nature partnership”, said China Daily. Xi told Starmer that the two countries should “carry out joint research and industrial transformation” in new energy and low-carbon technologies, according to Xinhua. It also cited Xi as saying China “hopes” the UK will provide a “fair” business environment for Chinese companies.
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OCTOPUS OVERSEAS: During the visit, UK power-trading company Octopus Energy and Chinese energy services firm PCG Power announced they would be starting a new joint venture in China, named Bitong Energy, reported industry news outlet PV Magazine. The move “marks a notable direct entry” of a foreign company into China’s “tightly regulated electricity market”, said Caixin.
PUSH AND PULL: UK policymakers also visited Chinese clean-energy technology manufacturer Envision in Shanghai, reported finance news outlet Yicai. It quoted UK business secretary Peter Kyle emphasising that partnering with companies “like Envision” on sustainability is a “really important part of our future”, particularly in terms of job creation in the UK. Trade minister Chris Bryant told Radio Scotland Breakfast that the government will decide on Chinese wind turbine manufacturer Mingyang’s plans for a Scotland factory “soon”. Researchers at the thinktank Oxford Institute for Energy Studies wrote in a guest post for Carbon Brief that greater Chinese competition in Europe’s wind market could “help spur competition in Europe”, if localisation rules and “other guardrails” are applied.
More China news
- LIFE SUPPORT: China will update its coal capacity payment mechanism, which will raise thresholds for coal-fired power plants and expand to cover gas-fired power and pumped and new-energy storage, reported current affairs outlet China News.
- FRONTIER TECH: The world’s “largest compressed-air power storage plant” has begun operating in China, said Bloomberg.
- PARTNERSHIP A ‘MISTAKE’: The EU launched a “foreign subsidies” probe into Chinese wind turbine company Goldwind, said the Hong Kong-based South China Morning Post. EU climate chief Wopke Hoekstra said the bloc must resist China’s pull in clean technologies, according to Bloomberg.
- TRADE SPAT: The World Trade Organization “backed a complaint by China” that the US Inflation Reduction Act “discriminated against” Chinese cleantech exports, said Reuters.
- NEW RULES: China has set “new regulations” for the Waliguan Baseline Observatory, which provides “key scientific references for the United Nations Framework Convention on Climate Change”, said the People’s Daily.
Captured
New or reactivated proposals for coal-fired power plants in China totalled 161GW in 2025, according to a new report covered by Carbon Brief.
Spotlight
Clean energy drove China’s economic growth in 2025
New analysis for Carbon Brief finds that clean-energy sectors contributed the equivalent of $2.1tn to China’s economy last year, making it a key driver of growth. However, headwinds in 2026 could restrict growth going forward – especially for the solar sector.
Below is an excerpt from the article, which can be read in full on Carbon Brief’s website.
Solar power, electric vehicles (EVs) and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment.
Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP)
Analysis shows that China’s clean-energy sectors nearly doubled in real value between 2022-25 and – if they were a country – would now be the 8th-largest economy in the world.
These investments in clean-energy manufacturing represent a large bet on the energy transition in China and overseas, creating an incentive for the government and enterprises to keep the boom going.
However, there is uncertainty about what will happen this year and beyond, particularly due to a new pricing system, worsening industrial “overcapacity” and trade tensions.
Outperforming the wider economy
China’s clean-energy economy continues to grow far more quickly than the wider economy, making an outsized contribution to annual growth.
Without these sectors, China’s GDP would have expanded by 3.5% in 2025 instead of the reported 5.0%, missing the target of “around 5%” growth by a wide margin.
Clean energy made a crucial contribution during a challenging year, when promoting economic growth was the foremost aim for policymakers.
In 2024, EVs and solar had been the largest growth drivers. In 2025, it was EVs and batteries, which delivered 44% of the economic impact and more than half of the growth of the clean-energy industries.
The next largest subsector was clean-power generation, transmission and storage, which made up 40% of the contribution to GDP and 30% of the growth in 2025.
Within the electricity sector, the largest drivers were growth in investment in wind and solar power generation capacity, along with growth in power output from solar and wind, followed by the exports of solar-power equipment and materials.
But investment in solar-panel supply chains, a major growth driver in 2022-23, continued to fall for the second year, as the government made efforts to rein in overcapacity and “irrational” price competition.
Headwinds for solar
Ongoing investment of hundreds of billions of dollars represents a gigantic bet on a continuing global energy transition.
However, developments next year and beyond are unclear, particularly for solar. A new pricing system for renewable power is creating uncertainty, while central government targets have been set far below current rates of clean-electricity additions.
Investment in solar-power generation and solar manufacturing declined in the second half of the year.
The reduction in the prices of clean-energy technology has been so dramatic that when the prices for GDP statistics are updated, the sectors’ contribution to real GDP – adjusted for inflation or, in this case deflation – will be revised down.
Nevertheless, the key economic role of the industry creates a strong motivation to keep the clean-energy boom going. A slowdown in the domestic market could also undermine efforts to stem overcapacity and inflame trade tensions by increasing pressure on exports to absorb supply.
Local governments and state-owned enterprises will also influence the outlook for the sector.
Provincial governments have a lot of leeway in implementing the new electricity markets and contracting systems for renewable power generation. The new five-year plans, to be published this year, will, therefore, be of major importance.
This spotlight was written for Carbon Brief by Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA), and Belinda Schaepe, China policy analyst at CREA. CREA China analysts Qi Qin and Chengcheng Qiu contributed research.
Watch, read, listen
PROVINCE INFLUENCE: The Institute for Global Decarbonization Progress, a Beijing-based thinktank, published a report examining the climate-related statements in provincial recommendations for the 15th five-year plan.
‘PIVOT’?: The Outrage + Optimism podcast spoke with the University of Bath’s Dr Yixian Sun about whether China sees itself as a climate leader and what its role in climate negotiations could be going forward.
COOKING FOR CLEAN-TECH: Caixin covered rising demand for China’s “gutter oil” as companies “scramble” to decarbonise.
DON’T GO IT ALONE: China News broadcast the Chinese foreign ministry’s response to the withdrawal of the US from the Paris Agreement, with spokeswoman Mao Ning saying “no country can remain unaffected” by climate change.
$6.8tn
The current size of China’s green-finance economy, including loans, bonds and equity, according to Dr Ma Jun, the Institute of Finance and Sustainability’s president,in a report launch event attended by Carbon Brief. Dr Ma added that “green loans” make up 16% of all loans in China, with some areas seeing them take a 34% share.
New science
- China’s official emissions inventories have overestimated its hydrofluorocarbon emissions by an average of 117m tonnes of carbon dioxide equivalent (mtCO2e) every year since 2017 | Nature Geoscience
- “Intensified forest management efforts” in China from 2010 onwards have been linked to an acceleration in carbon absorption by plants and soils | Communications Earth and Environment
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China Briefing is written by Anika Patel and edited by Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK appeared first on Carbon Brief.
Solar power, electric vehicles (EVs) and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment.
Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP) – comparable to the economies of Brazil or Canada.
The new analysis for Carbon Brief, based on official figures, industry data and analyst reports, shows that China’s clean-energy sectors nearly doubled in real value between 2022-25 and – if they were a country – would now be the 8th-largest economy in the world.
Other key findings from the analysis include:
- Without clean-energy sectors, China would have missed its target for GDP growth of “around 5%”, expanding by 3.5% in 2025 instead of the reported 5.0%.
- Clean-energy industries are expanding much more quickly than China’s economy overall, with their annual growth rate accelerating from 12% in 2024 to 18% in 2025.
- The “new three” of EVs, batteries and solar continue to dominate the economic contribution of clean energy in China, generating two-thirds of the value added and attracting more than half of all investment in the sectors.
- China’s investments in clean energy reached 7.2tn yuan ($1.0tn) in 2025, roughly four times the still sizable $260bn put into fossil-fuel extraction and coal power.
- Exports of clean-energy technologies grew rapidly in 2025, but China’s domestic market still far exceeds the export market in value for Chinese firms.
These investments in clean-energy manufacturing represent a large bet on the energy transition in China and overseas, creating an incentive for the government and enterprises to keep the boom going.
However, there is uncertainty about what will happen this year and beyond, particularly for solar power, where growth has slowed in response to a new pricing system and where central government targets have been set far below the recent rate of expansion.
An ongoing slowdown could turn the sectors into a drag on GDP, while worsening industrial “overcapacity” and exacerbating trade tensions.
Yet, even if central government targets in the next five-year plan are modest, those from local governments and state-owned enterprises could still drive significant growth in clean energy.
This article updates analysis previously reported for 2023 and 2024.
Clean-energy sectors outperform wider economy
China’s clean-energy economy continues to grow far more quickly than the wider economy. This means that it is making an outsize contribution to annual economic growth.
The figure below shows that clean-energy technologies drove more than a third of the growth in China’s economy overall in 2025 and more than 90% of the net rise in investment.
In 2022, China’s clean-energy economy was worth an estimated 8.4tn yuan ($1.2tn). By 2025, the sectors had nearly doubled in value to 15.4tn yuan ($2.1tn).
This is comparable to the entire output of Brazil or Canada and positions the Chinese clean-energy industry as the 8th-largest economy in the world. Its value is roughly half the size of the economy of India – the world’s fourth largest – or of the US state of California.
The outperformance of the clean-energy sectors means that they are also claiming a rising share of China’s economy overall, as shown in the figure below.
This share has risen from 7.3% of China’s GDP in 2022 to 11.4% in 2025.
Without clean-energy sectors, China’s GDP would have expanded by 3.5% in 2025 instead of the reported 5.0%, missing the target of “around 5%” growth by a wide margin.
Clean energy thus made a crucial contribution during a challenging year, when promoting economic growth was the foremost aim for policymakers.
The table below includes a detailed breakdown by sector and activity.
| Sector | Activity | Value in 2025, CNY bln | Value in 2025, USD bln | Year-on-year growth | Growth contribution | Value contribution | Value in 2025, CNY trn | Value in 2024, CNY trn | Value in 2023, CNY trn | Value in 2022, CNY trn |
|---|---|---|---|---|---|---|---|---|---|---|
| EVs | Investment: manufacturing capacity | 1,643 | 228 | 18% | 10.4% | 10.7% | 1.6 | 1.4 | 1.2 | 0.9 |
| EVs | Investment: charging infrastructure | 192 | 27 | 58% | 2.9% | 1.2% | 0.192 | 0.122 | 0.1 | 0.08 |
| EVs | Production of vehicles | 3,940 | 548 | 29% | 36.4% | 25.6% | 3.94 | 3.065 | 2.26 | 1.65 |
| Batteries | Investment: battery manufacturing | 277 | 38 | 35% | 3.0% | 1.8% | 0.277 | 0.205 | 0.32 | 0.15 |
| Batteries | Exports: batteries | 724 | 101 | 51% | 10.1% | 4.7% | 0.724 | 0.48 | 0.46 | 0.34 |
| Solar power | Investment: power generation capacity | 1,182 | 164 | 15% | 6.3% | 7.7% | 1.182 | 1.031 | 0.808 | 0.34 |
| Solar power | Investment: manufacturing capacity | 506 | 70 | -23% | -6.5% | 3.3% | 0.506 | 0.662 | 0.95 | 0.51 |
| Solar power | Electricity generation | 491 | 68 | 33% | 5.1% | 3.2% | 0.491 | 0.369 | 0.26 | 0.19 |
| Solar power | Exports of components | 681 | 95 | 21% | 4.9% | 4.4% | 0.681 | 0.562 | 0.5 | 0.35 |
| Wind power | Investment: power generation capacity, onshore | 612 | 85 | 47% | 8.1% | 4.0% | 0.612 | 0.417 | 0.397 | 0.21 |
| Wind power | Investment: power generation capacity, offshore | 96 | 13 | 98% | 2.0% | 0.6% | 0.096 | 0.048 | 0.086 | 0.06 |
| Wind power | Electricity generation | 510 | 71 | 13% | 2.4% | 3.3% | 0.51 | 0.453 | 0.4 | 0.34 |
| Nuclear power | Investment: power generation capacity | 173 | 24 | 18% | 1.1% | 1.1% | 0.17 | 0.15 | 0.09 | 0.07 |
| Nuclear power | Electricity generation | 216 | 30 | 8% | 0.7% | 1.4% | 0.216 | 0.2 | 0.19 | 0.19 |
| Hydropower | Investment: power generation capacity | 54 | 7 | -7% | -0.2% | 0.3% | 0.05 | 0.06 | 0.06 | 0.06 |
| Hydropower | Electricity generation | 582 | 81 | 3% | 0.6% | 3.8% | 0.582 | 0.567 | 0.51 | 0.51 |
| Rail transportation | Investment | 902 | 125 | 6% | 2.1% | 5.8% | 0.902 | 0.851 | 0.764 | 0.714 |
| Rail transportation | Transport of passengers and goods | 1,020 | 142 | 3% | 1.3% | 6.6% | 1.02 | 0.99 | 0.964 | 0.694 |
| Electricity transmission | Investment: transmission capacity | 644 | 90 | 6% | 1.5% | 4.2% | 0.64 | 0.61 | 0.53 | 0.5 |
| Electricity transmission | Transmission of clean power | 52 | 7 | 14% | 0.3% | 0.3% | 0.052 | 0.046 | 0.04 | 0.04 |
| Energy storage | Investment: Pumped hydro | 53 | 7 | 5% | 0.1% | 0.3% | 0.05 | 0.05 | 0.04 | 0.03 |
| Energy storage | Investment: Grid-connected batteries | 232 | 32 | 52% | 3.3% | 1.5% | 0.232 | 0.152 | 0.08 | 0.02 |
| Energy storage | Investment: Electrolysers | 11 | 2 | 29% | 0.1% | 0.1% | 0.011 | 0.009 | 0 | 0 |
| Energy efficiency | Revenue: Energy service companies | 620 | 86 | 17% | 3.8% | 4.0% | 0.62 | 0.528003 | 0.52 | 0.45 |
| Total | Investments | 7,198 | 1001 | 15% | 38.2% | 46.7% | 7.20 | 6.28 | 6.00 | 4.11 |
| Total | Production of goods and services | 8,216 | 1,143 | 22% | 61.8% | 53.3% | 8.22 | 6.73 | 5.58 | 4.32 |
| Total | Total GDP contribution | 15,414 | 2144 | 18% | 100.0% | 100.0% | 15.41 | 13.01 | 11.58 | 8.42 |
EVs and batteries were the largest drivers of GDP growth
In 2024, EVs and solar had been the largest growth drivers. In 2025, it was EVs and batteries, which delivered 44% of the economic impact and more than half of the growth of the clean-energy industries. This was due to strong growth in both output and investment.
The contribution to nominal GDP growth – unadjusted for inflation – was even larger, as EV prices held up year-on-year while the economy as a whole suffered from deflation. Investment in battery manufacturing rebounded after a fall in 2024.
The major contribution of EVs and batteries is illustrated in the figure below, which shows both the overall size of the clean-energy economy and the sectors that added the most to the rise from year to year.
The next largest subsector was clean-power generation, transmission and storage, which made up 40% of the contribution to GDP and 30% of the growth in 2025.
Within the electricity sector, the largest drivers were growth in investment in wind and solar power generation capacity, along with growth in power output from solar and wind, followed by the exports of solar-power equipment and materials.
Investment in solar-panel supply chains, a major growth driver in 2022-23, continued to fall for the second year. This was in line with the government’s efforts to rein in overcapacity and “irrational” price competition in the sector.
Finally, rail transportation was responsible for 12% of the total economic output of the clean-energy sectors, but saw relatively muted growth year-on-year, with revenue up 3% and investment by 6%.
Note that the International Energy Agency (IEA) world energy investment report projected that China invested $627bn in clean energy in 2025, against $257bn in fossil fuels.
For the same sectors as the IEA report, this analysis puts the value of clean-energy investment in 2025 at a significantly more conservative $430bn. The higher figures in this analysis overall are therefore the result of wider sectoral coverage.
Electric vehicles and batteries
EVs and vehicle batteries were again the largest contributors to China’s clean-energy economy in 2025, making up an estimated 44% of value overall.
Of this total, the largest share of both total value and growth came from the production of battery EVs and plug-in hybrids, which expanded 29% year-on-year. This was followed by investment into EV manufacturing, which grew 18%, after slower growth rates in 2024.
Investment in battery manufacturing also rebounded after a drop in 2024, driven by new battery technology and strong demand from both domestic and international markets. Battery manufacturing investment grew by 35% year-on-year to 277bn yuan.
The share of electric vehicles (EVs) will have reached 12% of all vehicles on the road by the end of 2025, up from 9% a year earlier and less than 2% just five years ago.
The share of EVs in the sales of all new vehicles increased to 48%, from 41% in 2024, with passenger cars crossing the 50% threshold. In November, EV sales crossed the 60% mark in total sales and they continue to drive overall automotive sales growth, as shown below.
Electric trucks experienced a breakthrough as their market share rose from 8% in the first nine months of 2024 to 23% in the same period in 2025.
Policy support for EVs continues, for example, with a new policy aiming to nearly double charging infrastructure in the next three years.
Exports grew even faster than the domestic market, but the vast majority of EVs continue to be sold domestically. In 2025, China produced 16.6m EVs, rising 29% year-on-year. While exports accounted for only 21% or 3.4m EVs, they grew by 86% year-on-year. Top export destinations for Chinese EVs were western Europe, the Middle East and Latin America.
The value of batteries exported also grew rapidly by 41% year-on-year, becoming the third largest growth driver of the GDP. Battery exports largely went to western Europe, north America and south-east Asia.
In contrast with deflationary trends in the price of many clean-energy technologies, average EV prices have held up in 2025, with a slight increase in average price of new models, after discounts. This also means that the contribution of the EV industry to nominal GDP growth was even more significant, given that overall producer prices across the economy fell by 2.6%. Battery prices continued to drop.
Clean-power generation
The solar power sector generated 19% of the total value of the clean-energy industries in 2025, adding 2.9tn yuan ($41bn) to the national economy.
Within this, investment in new solar power plants, at 1.2tn yuan ($160bn), was the largest driver, followed by the value of solar technology exports and by the value of the power generated from solar. Investment in manufacturing continued to fall after the wave of capacity additions in 2023, reaching 0.5tn yuan ($72bn), down 23% year-on-year.
In 2025, China achieved another new record of wind and solar capacity additions. The country installed a total of 315GW solar and 119GW wind capacity, adding more solar and two times as much wind as the rest of the world combined.
Clean energy accounted for 90% of investment in power generation, with solar alone covering 50% of that. As a result, non-fossil power made up 42% of total power generation, up from 39% in 2024.
However, a new pricing policy for new solar and wind projects and modest targets for capacity growth have created uncertainty about whether the boom will continue.
Under the new policy, new clean-power generation has to compete on price against existing coal power in markets that place it at a disadvantage in some key ways.
At the same time, the electricity markets themselves are still being introduced and developed, creating investment uncertainty.
Investment in solar power generation increased year-on-year by 15%, but experienced a strong stop-and-go cycle. Developers rushed to finish projects ahead of the new pricing policy coming into force in June and then again towards the end of the year to finalise projects ahead of the end of the current 14th five-year plan.
Investment in the solar sector as a whole was stable year-on-year, with the decline in manufacturing capacity investment balanced by continued growth in power generation capacity additions. This helped shore up the utilisation of manufacturing plants, in line with the government’s aim to reduce “disorderly” price competition.
By late 2025, China’s solar manufacturing capacity reached an estimated 1,200GW per year, well ahead of the global capacity additions of around 650GW in 2025. Manufacturers can now produce far more solar panels than the global market can absorb, with fierce competition leading to historically low profitability.
China’s policymakers have sought to address the issue since mid-2024, warning against “involution”, passing regulations and convening a sector-wide meeting to put pressure on the industry. This is starting to yield results, with losses narrowing in the third quarter of 2025.
The volume of exports of solar panels and components reached a record high in 2025, growing 19% year-on-year. In particular, exports of cells and wafers increased rapidly by 94% and 52%, while panel exports grew only by 4%.
This reflects the growing diversification of solar-supply chains in the face of tariffs and with more countries around the world building out solar panel manufacturing capacity. The nominal value of exports fell 8%, however, due to a fall in average prices and a shift to exporting upstream intermediate products instead of finished panels.
Hydropower, wind and nuclear were responsible for 15% of the total value of the clean-energy sectors in 2025, adding some 2.2tn yuan ($310bn) to China’s GDP in 2025.
Nearly two-thirds of this (1.3tn yuan, $180bn) came from the value of power generation from hydropower, wind and nuclear, with investment in new power generation projects contributing the rest.
Power generation grew 33% from solar, 13% from wind, 3% from hydropower and 8% from nuclear.
Within power generation investment, solar remained the largest segment by value – as shown in the figure below – but wind-power generation projects were the largest contributor to growth, overtaking solar for the first time since 2020.
In particular, offshore wind power capacity investment rebounded as expected, doubling in 2025 after a sharp drop in 2024.
Investment in nuclear projects continued to grow but remains smaller in total terms, at 17bn yuan. Investment in conventional hydropower continued to decline by 7%.
Electricity storage and grids
Electricity transmission and storage were responsible for 6% of the total value of the clean-energy sectors in 2025, accounting for 1.0 tn yuan ($140bn).
The most valuable sub-segment was investment in power grids, growing 6% in 2025 and reaching $90bn. This was followed by investment in energy storage, including pumped hydropower, grid-connected battery storage and hydrogen production.
Investment in grid-connected batteries saw the largest year-on-year growth, increasing by 50%, while investments in electrolysers also grew by 30%. The transmission of clean power increased an estimated 13%, due to rapid growth in clean-power generation.
China’s total electricity storage capacity reached more than 213GW, with battery storage capacity crossing 145GW and pumped hydro storage at 69GW. Some 66GW of battery storage capacity was added in 2025, up 52% year-on-year and accounting for more than 40% of global capacity additions.
Notably, capacity additions accelerated in the second half of the year, with 43GW added, compared with the first half, which saw 23GW of new capacity.
The battery storage market initially slowed after the renewable power pricing policy, which banned storage mandates after May, but this was quickly replaced by a “market-driven boom”. Provincial electricity spot markets, time-of-day tariffs and increasing curtailment of solar power all improved the economics of adding storage.
By the end of 2025, China’s top five solar manufacturers had all entered the battery storage market, making a shift in industry strategy.
Investment in pumped hydropower continued to increase, with 15GW of new capacity permitted in the first half of 2025 alone and 3GW entering operation.
Railways
Rail transportation made up 12% of the GDP contribution of the clean-energy sectors, with revenue from passenger and goods rail transportation the largest source of value. Most growth came from investment in rail infrastructure, which increased 6% year-on-year
The electrification of transport is not limited to EVs, as rail passenger, freight and investment volumes saw continued growth. The total length of China’s high-speed railway network reached 50,000km in 2025, making up more than 70% of the global high-speed total.
Energy efficiency
Investment in energy efficiency rebounded strongly in 2025. Measured by the aggregate turnover of large energy service companies (ESCOs), the market expanded by 17% year-on-year, returning to growth rates last seen during 2016-2020.
Total industry turnover has also recovered to its previous peak in 2021, signalling a clear turnaround after three years of weakness.
Industry projections now anticipate annual turnover reaching 1tn yuan in annual turnover by 2030, a target that had previously been expected to be met by 2025.
China’s ESCO market has evolved into the world’s largest. Investment within China’s ESCO market remains heavily concentrated in the buildings sector, which accounts for around 50% of total activity. Industrial applications make up a further 21%, while energy supply, demand-side flexibility and energy storage together account for approximately 16%.
Implications of China’s clean-energy bet
Ongoing investment of hundreds of billions of dollars into clean-energy manufacturing represents a gigantic economic and financial bet on a continuing global energy transition.
In addition to the domestic investment covered in this article, Chinese firms are making major investments in overseas manufacturing.
The clean-energy industries have played a crucial role in meeting China’s economic targets during the five-year period ending this year, delivering an estimated 40%, 25% and 37% of all GDP growth in 2023, 2024 and 2025, respectively.
However, the developments next year and beyond are unclear, particularly for solar power generation, with the new pricing system for renewable power generation leading to a short-term slowdown and creating major uncertainty, while central government targets have been set far below current rates of clean-electricity additions.
Investment in solar-power generation and solar manufacturing declined in the second half of the year, while investment in generation clocked growth for the full year, showing the risk to the industries under the current power market set-ups that favour coal-fired power.
The reduction in the prices of clean-energy technology has been so dramatic that when the prices for GDP statistics are updated, the sectors’ contribution to real GDP – adjusted for inflation or, in this case deflation – will be revised down.
Nevertheless, the key economic role of the industry creates a strong motivation to keep the clean-energy boom going. A slowdown in the domestic market could also undermine efforts to stem overcapacity and inflame trade tensions by increasing pressure on exports to absorb supply.
A recent CREA survey of experts working on climate and energy issues in China found that the majority believe that economic and geopolitical challenges will make the “dual carbon” goals – and with that, clean-energy industries – only more important.
Local governments and state-owned enterprises will also influence the outlook for the sector. Their previous five-year plans played a key role in creating the gigantic wind and solar power “bases” that substantially exceeded the central government’s level of ambition.
Provincial governments also have a lot of leeway in implementing the new electricity markets and contracting systems for renewable power generation. The new five-year plans, to be published this year, will therefore be of major importance.
About the data
Reported investment expenditure and sales revenue has been used where available. When this is not available, estimates are based on physical volumes – gigawatts of capacity installed, number of vehicles sold – and unit costs or prices.
The contribution to real growth is tracked by adjusting for inflation using 2022-2023 prices.
All calculations and data sources are given in a worksheet.
Estimates include the contribution of clean-energy technologies to the demand for upstream inputs such as metals and chemicals.
This approach shows the contribution of the clean-energy sectors to driving economic activity, also outside the sectors themselves, and is appropriate for estimating how much lower economic growth would have been without growth in these sectors.
Double counting is avoided by only including non-overlapping points in value chains. For example, the value of EV production and investment in battery storage of electricity is included, but not the value of battery production for the domestic market, which is predominantly an input to these activities.
Similarly, the value of solar panels produced for the domestic market is not included, as it makes up a part of the value of solar power generating capacity installed in China. However, the value of solar panel and battery exports is included.
In 2025, there was a major divergence between two different measures of investment. The first, fixed asset investment, reportedly fell by 3.8%, the first drop in 35 years. In contrast, gross capital formation saw the slowest growth in that period but still inched up by 2%.
This analysis uses gross capital formation as the measure of investment, as it is the data point used for GDP accounting. However, the analysis is unable to account for changes in inventories, so the estimate of clean-energy investment is for fixed asset investment in the sectors.
The analysis does not explicitly account for the small and declining role of imports in producing clean-energy goods and services. This means that the results slightly overstate the contribution to GDP but understate the contribution to growth.
For example, one of the most important import dependencies that China has is for advanced computing chips for EVs. The value of the chips in a typical EV is $1,000 and China’s import dependency for these chips is 90%, which suggests that imported chips represent less than 3% of the value of EV production.
The estimates are likely to be conservative in some key respects. For example, Bloomberg New Energy Finance estimates “investment in the energy transition” in China in 2024 at $800bn. This estimate covers a nearly identical list of sectors to ours, but excludes manufacturing – the comparable number from our data is $600bn.
China’s National Bureau of Statistics says that the total value generated by automobile production and sales in 2023 was 11tn yuan. The estimate in this analysis for the value of EV sales in 2023 is 2.3tn yuan, or 20% of the total value of the industry, when EVs already made up 31% of vehicle production and the average selling prices for EVs was slightly higher than for internal combustion engine vehicles.
The post Analysis: Clean energy drove more than a third of China’s GDP growth in 2025 appeared first on Carbon Brief.
Analysis: Clean energy drove more than a third of China’s GDP growth in 2025
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Greenhouse Gases6 months ago
Guest post: Why China is still building new coal – and when it might stop
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Climate Change6 months ago
Guest post: Why China is still building new coal – and when it might stop
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Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
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Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
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Climate Change2 years ago
Spanish-language misinformation on renewable energy spreads online, report shows
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Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
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Climate Change Videos2 years ago
The toxic gas flares fuelling Nigeria’s climate change – BBC News
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Renewable Energy2 years ago
GAF Energy Completes Construction of Second Manufacturing Facility