Published

8 months ago

June 26, 2025

Alice Rush

Episode 105: What’s at Stake for Clean Energy Tax Credits?

In this second episode of our new policy mini-series, CCL’s Dana Nuccitelli and Elissa Tennant return to break down the latest developments in the ongoing fight to defend the Inflation Reduction Act’s (IRA) clean energy tax credits.

With the Senate Finance Committee’s budget text now public, Dana and Elissa compare how the Senate version stacks up against the House Ways and Means Committee’s bill — and what it all means for our energy bills, manufacturing sector, and climate targets.

Spoiler alert: If key tax credits are repealed or weakened, households could face up to $3,000 in higher energy costs over the next decade, and the U.S. could lose hundreds of thousands of clean energy jobs.

Listen Now!

In this episode:

What the “Byrd bath” process is, and why it matters
Why transferability of tax credits is essential for small clean energy businesses
What’s really behind the “Foreign Entities of Concern” language
How repealing credits affects electric vehicles, clean energy buildout, and climate pollution
Action steps for advocates

Listener Questions: Energy Efficiency and Podcast Joy

In this episode, we feature two insightful voicemails from listeners. One caller asks about the real-world impact of removing the 45L energy-efficient homes tax credit and the potential loss of the long-standing Energy Star program. Dana breaks down how these changes would raise household energy bills and reduce incentives for smarter energy use. Another listener shares how Citizens’ Climate Radio boosts their mood and motivation, even when the topics are tough—reminding us why we do this work.

Leadership Update: Meet Ricky Bradley

We close the episode with a major announcement from CCL Board Chair Bill Blancato: Ricky Bradley will become Citizens’ Climate Lobby’s Interim Executive Director starting July 16, 2025. Ricky has been with CCL since 2012, starting as a volunteer and later launching key initiatives like Citizens’ Climate University and CCL Community. Ricky shares heartfelt reflections on his journey with CCL and his vision for leading the organization into its next chapter.

Mentioned in the episode:

We Want to Hear from You

Join the conversation over at The Nerd Corner

Email: radio @ citizensclimate.org

Listener Line: Call or text us at +1-619-512-9646 with your comments or questions.

Social Media: Follow us on X, Instagram, LinkedIn, Facebook, and TikTok.

Join us in person: Register now for the Citizens’ Climate Lobby Summer Conference and Lobby Day happening July 20–22, 2025, in Washington, D.C.

Transcript

Citizens’ Climate Radio – Episode 105

Title: What’s at Stake for Clean Energy Tax Credits

PETERSON TOSCANO:
Welcome to Citizens’ Climate Radio, the podcast that helps you understand the climate policy news behind the headlines. I’m Peterson Toscano.

Each month we bring you timely updates from Capitol Hill and beyond, breaking down complex topics and showing how you can make an impact.

In this episode, you’ll hear big news from Citizens’ Climate Lobby regarding our leadership. But first, we’re continuing our new series with CCL’s Elissa Tennant and Dana Nuccitelli. They team up to help you navigate the fast-changing world of climate legislation.

Today, they’re diving into the latest news and research on the Inflation Reduction Act—and how repealing it would hurt American families and businesses. So what’s in the new text, what’s at stake, and how can climate advocates respond?

Elissa and Dana, welcome back to the show.

ELISSA TENNANT:
Glad to be here. Thanks, Peterson.

PETERSON TOSCANO:
Before we dive in, what’s one climate policy term or phrase you wish more people understood—and why?

DANA NUCCITELLI:
I’m going to say the concept of net zero emissions, which means you’re pulling as much carbon out of the atmosphere as you’re adding in a given year. So you’re not increasing the amount of greenhouse gases in the atmosphere.

Some people argue that’s not good enough because our emissions aren’t literally zero. Others say it’s impossible to reach. But not only is it possible—it’s a good target. Once you reach net zero emissions, that’s when global warming stops. And that’s the whole goal.

ELISSA TENNANT:
And mine segues nicely into our discussion. My term is budget reconciliation. It’s not directly a climate-related term, but I had never heard of it before I came to Citizens’ Climate Lobby. It impacts so many policies, including climate and energy. I wish more people understood it—but I get it, it’s a really long process.

PETERSON TOSCANO:
Same. It was a new thing for me too. I love those answers.

Thanks so much—and thank you for taking over the mic today. Listener, you are in excellent hands. I’ll be back at the end of the show.

Chapter 1: Senate Budget Breakdown

ELISSA TENNANT:
Thank you, Peterson. And thank you for listening and for joining us. Later in the show, we’ll share some listener voicemails and our responses—and let you know how you can leave your own voicemail or question for us.

But first—Dana, we are knee-deep in budget reconciliation. Let’s talk about it.

Our last episode covered the release of the House Ways and Means Committee’s version of the budget, which gutted the Inflation Reduction Act’s clean energy tax credits. The House ultimately passed that version, and now negotiations have moved to the Senate.

So let’s set the scene. What’s happening in the Senate right now?

DANA NUCCITELLI:
All of the Senate committees have released their versions of the budget reconciliation bill. The last committee to go was the Senate Finance Committee—they have the most complicated and wide-ranging responsibilities, including decisions about the Inflation Reduction Act’s clean energy tax credits.

They’ve now released their text, and it’s going through what’s called the bird bath, which is when the Senate parliamentarian checks each proposal to make sure it qualifies for inclusion under budget reconciliation rules.

ELISSA TENNANT:
Talk to me more about the bird bath. I don’t know if we mentioned it in our last episode, but we can’t just throw that term out and move on.

DANA NUCCITELLI:
Yeah, we’ve talked about the parliamentarian before—Elizabeth McDonough. Shout out to her.

For a proposal to qualify for budget reconciliation, it must be primarily budgetary in nature. That means the proposal’s main purpose has to be to affect federal spending or revenue. It can’t just be a policy change with minor budget implications.

The parliamentarian reviews all provisions and decides what stays. That process is called the bird bath, named after Senator Robert Byrd from West Virginia, who helped establish these rules.

ELISSA TENNANT:
Okay, and we learn something new every day! So the Senate Finance Committee is essentially the Senate counterpart to the House Ways and Means Committee, right?

DANA NUCCITELLI:
Correct.

ELISSA TENNANT:
That’s what I thought! So let’s get into it: How is the Senate Finance Committee’s proposed budget different from the House bill?

DANA NUCCITELLI:
They definitely made improvements—especially when it comes to clean energy tax credits.

For example, the House version effectively repealed the clean electricity tax credits immediately. The Senate version, though, phases them out more gradually. Solar and wind tax credits would begin phasing out after 2025, tapering through 2027.

Other technologies—like geothermal, nuclear, hydro, and battery storage—get even more runway, with phaseouts beginning in the 2030s. That’s especially good for battery storage, which is key to addressing the intermittency of solar and wind power.

ELISSA TENNANT:
Sounds like a solid improvement. Let’s talk about those so-called “poison pills” in the House version. I want to get into the weeds.

DANA NUCCITELLI:
Let’s do it. One of the biggest issues was the Foreign Entities of Concern rule—FIAC for short.

Basically, the U.S. government maintains a list of countries considered foreign entities of concern—currently China, Russia, North Korea, and Iran. The goal is to reduce our reliance on countries like China for clean energy technology components.

The House version took this idea to the extreme. It said that if any part of your clean energy project came from China—even a single bolt or wire—then your entire project would be disqualified from receiving tax credits. That’s just not realistic.

ELISSA TENNANT:
Right, because we rely on a global supply chain. That rule would have been nearly impossible to comply with.

DANA NUCCITELLI:
Exactly. The Senate version still includes FIAC language, but it’s less extreme. It looks more workable, though folks are still analyzing the details to see if it’s feasible for specific technologies.

Another big difference is on transferability. In the Inflation Reduction Act, clean energy tax credits are transferable. That means small companies that don’t owe a lot in taxes can sell those credits to larger businesses that do—basically creating a marketplace.

The House bill would have rolled that back. Without transferability, small solar and wind companies would have to partner with big banks to monetize those credits. And of course, the banks would take a cut.

ELISSA TENNANT:
So instead of tax credits going to solar panels, they’d be going to financial institutions. Not ideal.

DANA NUCCITELLI:
Exactly. The Senate version preserves transferability, which means those taxpayer dollars are more likely to support actual clean energy projects rather than getting siphoned off in financing deals.

ELISSA TENNANT:
I love a good metaphor, and one we’ve been using on internal calls is: The House bill really dug a deep hole. The Senate version is throwing in a few shovelfuls of dirt to try and fill it back in.

DANA NUCCITELLI:
Right. It’s still not great—but definitely better. The Senate version eliminates some of the most harmful provisions from the House bill.

Chapter 2: What’s at Stake?

ELISSA TENNANT:
And now… we’re going to stop celebrating and talk about the impacts. As our resident nerd, I know you’ve been poring over 10 to 15 studies on what happens if the IRA’s clean energy tax credits get repealed.

So what’s the headline here? What happens if we lose these credits or they get phased out?

DANA NUCCITELLI:
I looked at about 8 to 10 reports. The headline is simple: Repealing these tax credits will make household energy bills go up.

That includes electricity, gasoline, and natural gas. And that’s bad news for pretty much everyone.

ELISSA TENNANT:
How much are we talking?

DANA NUCCITELLI:
Gasoline prices could go up anywhere from 3 to 25 cents per gallon. That’s because eliminating the EV tax credit would mean fewer people buy electric vehicles—and more people buy gas cars. More gas demand = higher prices.

ELISSA TENNANT:
Oof. A little economics lesson there.

DANA NUCCITELLI:
Exactly. Electricity bills would increase by about $100 per year per household. Same goes for vehicle fuel costs—another $100 a year. And if your home uses natural gas, those prices could go up too, because utilities would be relying more on fossil fuels.

All together, average U.S. households could see $1,000 to $3,000 in additional energy costs over the next 10 years.

ELISSA TENNANT:
Okay, I’m going to speak on behalf of the audience: We’re not loving this news.

DANA NUCCITELLI:
Yeah, no one wants to pay an extra two grand just because Congress gutted a clean energy policy.

ELISSA TENNANT:
And that’s just the household side. What about jobs and manufacturing?

DANA NUCCITELLI:
We’ve seen a clean energy manufacturing boom since the Inflation Reduction Act passed—especially in EVs, batteries, and solar panels. Companies invested based on the expectation that these tax credits would stick around.

If those credits disappear, demand drops. And when demand drops, companies stop building new factories—or even close existing ones.

The Princeton REPEAT Project estimates that repealing the EV tax credit could result in 20 to 40 million fewer EVs on the road by 2035. That kind of drop means we may already have too much manufacturing capacity. Companies could start laying off workers.

ELISSA TENNANT:
This whole conversation is painful. The only way out is through. Let’s talk about jobs.

DANA NUCCITELLI:
Right. So if demand for clean energy drops, the need for manufacturing drops, and we lose jobs.

It’s not just factory jobs. It’s also the people who build wind and solar farms—construction workers, electricians, and so on. If the House version passed as-is, clean power deployment would be cut in half over the next decade.

Even the Senate version, while better, would still result in fewer projects being built than if we kept the full IRA incentives. That means hundreds of thousands of lost jobs in clean energy manufacturing and construction.

And remember, those workers spend money in their communities. Fewer jobs means less local spending, which means more job losses across the economy.

ELISSA TENNANT:
So we’re talking about higher household costs, fewer clean energy projects, massive job losses… and shrinking GDP?

DANA NUCCITELLI:
Yes. Analysts estimate the IRA repeal would reduce GDP by about $1 trillion over the next 10 years.

And that’s the kicker: lawmakers are trying to save half a trillion by repealing the tax credits—but it’ll cost the economy twice that in lost output. It’s not fiscally smart.

ELISSA TENNANT:
Tell me that’s the last of the bad news?

DANA NUCCITELLI:
Not quite. More fossil fuel use means more air pollution. One report I reviewed projected thousands of additional premature deaths due to smog, particulates, and other pollutants from burning gas and coal.

There are also increases in asthma, heart disease, even dementia. And of course, there’s climate pollution—greenhouse gas emissions will rise if we roll back these clean energy programs.

ELISSA TENNANT:
So not only would we fall short of our climate targets, we’d be rolling back gains in public health and energy affordability?

DANA NUCCITELLI:
Exactly. If this repeal effort goes through, the U.S. will only achieve a 20–30% reduction in greenhouse gas emissions from 2005 levels by 2030.

Our Paris Agreement target is 50%. So we’d be well short—unless Congress changes course.

Chapter 3: Energy Security & Grid Strain

ELISSA TENNANT:
Let’s talk about energy security. What happens if we roll back clean energy investments at the same time electricity demand is rising?

DANA NUCCITELLI:
That’s a big problem. Right now, we’re seeing a sharp increase in electricity demand—faster than anything in the past 20 years.

Why? A few reasons:

Data centers, especially for artificial intelligence, use a ton of power.
More people are buying electric vehicles.
Homes are switching to electric heat pumps.
And hotter temperatures from global warming mean more air conditioning.

All that adds up to a projected 5 to 10 times faster growth in power demand compared to previous decades.

ELISSA TENNANT:
Wow.

DANA NUCCITELLI:
Yeah. And if we strip away the financial incentives for building new clean power sources, we won’t be able to keep up with that demand.

That means we’re at risk of blackouts and grid instability—especially in the summer, when power use spikes.

ELISSA TENNANT:
Why are solar and wind getting the short end of the stick here? What did they ever do?

DANA NUCCITELLI:
Some lawmakers argue that solar and wind are “mature technologies” and don’t need help anymore.

And it’s true—they’ve gotten cheaper. But clean energy projects still rely on long-term financial modeling, and if you suddenly yank away the incentives, it disrupts those plans.

A gradual phaseout makes more sense than ripping off the bandage.

Also… let’s be honest. The Trump administration has had a long-standing dislike of wind power. Wind energy got treated especially badly in both the House and Senate proposals.

ELISSA TENNANT:
Just for the record, I’m squinting my eyes in disapproval at that statement. Deep squint.

All right… are there any more bad impacts? Or can we finally move on?

DANA NUCCITELLI:
We can move on—but just one more: repealing these credits increases climate pollution, and we fall far short of our climate goals.

ELISSA TENNANT:
We love hearing from you, the listener. And today, we’ve got two voicemails to share.

Dana, the first one’s for you.

Listener voicemail:
Hi there. I really enjoyed your recent episode on saving clean energy tax credits. I’d love to hear a deeper dive into how removing the 45L tax credit and possibly ending the Energy Star program would impact homeowners—especially their monthly energy bills.

These programs seem so important in helping people lower utility costs, and I think that message needs to be clearer when lobbying Congress.

Thanks again—great show!

DANA NUCCITELLI:
Great question. The 45L tax credit is for building new homes that meet energy efficiency standards—think solid insulation, good windows, and Energy Star appliances. It gives developers an incentive to build efficient homes.

The Energy Star program itself is a consumer guide. If you see the sticker, you know you’re getting an energy-efficient appliance.

Repealing these would do two things:

Raise energy bills for families living in new homes.
Accelerate demand on the grid at a time when electricity use is already rising.

We’ve kept energy use relatively flat for the last 20 years largely because of programs like Energy Star. Removing them now, when demand is spiking, is a recipe for even higher bills.

ELISSA TENNANT:
So… we need a third-party Energy Star label. Someone out there, please start that and we’ll give you a shoutout on the show.

Our second voicemail comes from a longtime CCL volunteer.

CRAIG PRESTON (voicemail):
Hello, Peterson and the team. This is Craig Preston from the Orange County Coast Chapter.

I’ll be honest—I’m always tempted to skip a 40-minute podcast. But every time I listen, Citizens’ Climate Radio gives me a boost of inspiration and energy for activism.

Thanks for the gift of this show.

ELISSA TENNANT:
That is so kind. Thank you, Craig. You’re the best. We’ll see you in D.C. this July at the CCL Summer Conference and Lobby Day!

ELISSA TENNANT:
Before we wrap up, one more update—and it’s a big one.

PETERSON TOSCANO:
That’s right. We’ve got some leadership news to share.

BILL BLANCATO (clip from June monthly call):
Hey everybody. I’m Bill Blancato, and I’ve been a CCL volunteer since 2013. In 2014, I helped start the second chapter in North Carolina.

As of June 1st, I’m serving as Chair of the Citizens’ Climate Lobby Board.

The leadership update I want to share is this: Our Executive Director, Rachel Kerestes, has announced she’ll be stepping down effective July 15th.

Together with the board, we’ve offered the role of Interim Executive Director to Ricky Bradley—and I’m happy to say he’s accepted. He’ll officially assume the role on July 16th.

RICKY BRADLEY (clip):
Thank you, Bill. I’m deeply honored by this opportunity.

For those who don’t know me, I started volunteering with CCL in 2012. My first chapter meeting was at my kitchen table—with my spouse and one other person.

Since then, I’ve served in lots of roles—helping to relaunch the website, create CCL Community, and build Citizens’ Climate University. I’ve worked as Regional Coordinator in the South and most recently served as VP of Field Operations.

What makes CCL powerful isn’t just the strategy—it’s the people. The relationships we’ve built together. The passion and the purpose we bring to the work.

PETERSON TOSCANO:
Here at Citizens’ Climate Radio, Ricky holds a special place in our hearts. He was the one who first approached me about creating this podcast—almost ten years ago.

Ricky, congratulations. If you want to see him in action, join us at the Citizens’ Climate Lobby Summer Conference, July 20–22 in Washington, D.C. You can register at cclusa.org/conference.

ELISSA TENNANT:
And as a final reminder—if you’ve got a story to share or a question for the show, call or text our listener line at 619-512-9646. That’s +1 if you’re outside the U.S.

PETERSON TOSCANO:
And don’t forget: you can still take action to protect clean energy tax credits. Head to cclusa.org/IRAdefense to contact your senators.

This episode was written by Elissa Tennant, Dana Nuccitelli, and me—Peterson Toscano. I also recorded and edited the episode. (Though let’s be honest… this one barely needed editing.)

Music comes from Epidemic Sound. Citizens’ Climate Radio is a project of Citizens’ Climate Education.

Stay strong, determined, and creative in your climate work.

The post Episode 105: What’s at Stake for Clean Energy Tax Credits? appeared first on Citizens' Climate Lobby.

Episode 105: What’s at Stake for Clean Energy Tax Credits?

Greenhouse Gases

DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss?

Published

3 days ago

February 6, 2026

Alice Rush

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.

DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss?

Greenhouse Gases

China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK

Published

4 days ago

February 5, 2026

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

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.)

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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.

Sign up to Carbon Brief’s free “China Briefing” email newsletter. All you need to know about the latest developments relating to China and climate change. Sent to your inbox every Thursday.

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.

China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK

Greenhouse Gases

Analysis: Clean energy drove more than a third of China’s GDP growth in 2025

Published

4 days ago

February 4, 2026

Alice Rush

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.

Contributions to the growth in Chinese investment (left) and GDP overall (right) in 2025 by sector, trillion yuan. Source: Centre for Research on Energy and Clean Air (CREA) analysis for Carbon Brief.

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.

Share of China’s GDP contributed by clean-energy sectors, %. Source: CREA analysis for Carbon Brief.

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

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.

Contribution of clean-energy sectors to China’s GDP and GDP growth, trillion yuan, 2022-2025. Source: CREA analysis for Carbon Brief.

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.

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.

Production of combustion-engine vehicles and EVs in China, million units. EVs include battery electric vehicles and plug-in hybrids. Source: China Association of Automobile Manufacturers data via Wind Financial Terminal.

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.

Value of new clean-power generation capacity, billion yuan, by year added. Source: CREA analysis for Carbon Brief.

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.

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.