China’s solar and windfarms would no longer be guaranteed sales at a fixed price linked to coal benchmarks, under a new policy released by the central government.
The policy asks local governments to shift new wind and solar projects to a more market-based pricing system by the end of 2025.
Said local governments will determine the details of the proposed “sustainable new-energy pricing mechanism” (新能源可持续发展价格结算机制).
In broad terms, however, the idea is that new wind and solar schemes would be paid a fixed price determined at auction in a system that resembles the UK’s “contract for difference” mechanism.
The move is part of wider efforts to shift the operation of China’s giant electricity system towards more market-based signals, rather than administratively set prices.
It also reflects a growing need to manage the integration of renewables into the system, with record wind and solar capacity added last year creating “conflict” with coal power.
While existing projects would continue to be paid under the old system, new wind and solar schemes will face a more uncertain business outlook, analysts tell Carbon Brief.
However, they say that, in the long run and with the right implementation strategies, the new mechanism could make renewables more innovative and even more cost-effective for power consumers, compared to coal.
More ‘market-oriented’
From 2026, China has announced that the price of electricity generated from solar and wind schemes will be determined according to competitive auctions.
This will replace the existing fixed rates solar and wind received for their power, which was pegged to benchmarks for coal-fired power, with the new mechanism likely making prices for renewables much cheaper than coal.
The new system resembles the two-way “contract for difference” (CfD) mechanism used in the UK and elsewhere. Under this type of mechanism, power generators are paid a fixed “strike price” for each unit of electricity they produce.
If market prices for power fall below this level, generators receive the difference as a top-up payment, but they must pay back the difference if prices rise above it instead.
This setup would allow developers to have “reasonable and stable expectations” for revenue, which will support a “healthy” industry and China’s energy transition, representatives of the National Development and Reform Commission (NDRC), China’s top economic planning body, and National Energy Agency (NEA) say in an official Q&A on the policy.
Despite some reporting to the contrary, the move does not constitute a rollback of subsidies for renewables, as grid operators have paid the same price for coal-fired power and wind and solar power since 2021.
Bringing prices up to date
The change to the rules has been attributed to the sharp reduction in the cost of building new solar and windfarms, prompting questions around whether renewable generators should be paid the same amount as infrastructure-heavy coal plants.
“The coal-fired grid benchmark rate was last updated in 2017 and actually has no relationship to the generation cost of renewables,” David Fishman, senior manager at the energy consultancy Lantau Group, tells Carbon Brief, adding the price was effectively “arbitrary”.
The NDRC and NEA Q&A argues that renewable energy schemes operating on a fixed tariff “cannot fully reflect market supply and demand” and do not “fairly [distribute] responsibility for power system flexibility”.
Fishman adds that the timing of the announcement may have been linked to the situation China experienced late last year, which saw unusually high curtailment of renewable energy at a time when analysts expected low-carbon power to cover new demand growth.
An analysis written in summer 2024 by Shi Jingli, a researcher from the NDRC-affiliated Energy Research Institute (ERI), argued that the UK’s CfD system “significantly reduced renewable energy tariffs and the government’s overall expenditure on renewable energy projects”, which also indicates that cost may be a driving factor behind the change.
Other changes
The new rules will only apply to projects developed from June 2025 onwards. They will apply to all sources of wind and solar power, from huge clean-energy “bases” to distributed generators such as solar rooftops.
In order to facilitate the increasingly market-based operation of the electricity system, the new notice encourages local governments to “improve spot market trading rules” and “accelerate” voluntary participation in day-ahead trading.
It also encourages the increased use of multi-year power purchase agreements (PPAs) and other forms of medium- and long-term contracts, among both renewable projects developed before the June 2025 cut-off date (called stock, 存量) and new schemes (called incremental, 增量).
Meanwhile, energy storage requirements for new wind and solar projects have been revoked, in a move that economic news outlet Jiemian says “will have a huge impact on the energy storage industry”.
The policy also notes that local authorities could consider implementing similar systems for biomass, geothermal and other power generators.
No pain, no gain
The exact impact that this will have on renewable developers will depend on the implementing rules adopted by local governments, according to Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA).
In the short-term, these companies will be hit by the loss of the guaranteed demand and the need to adapt to the low prices and fierce competition of the new system, Fishman says.
Many projects initially slated for completion later in 2025 may be rushed through in order to be eligible to stay on the current system, resulting in a spike in added capacity in the second quarter of the year followed by a dip in the third quarter, he tells Carbon Brief.
Companies will also need to pivot to have stronger marketing and sales capabilities, says Wang Jihong, senior counsel at law firm Zhong Lun, as the policy encourages greater uptake of renewable energy through PPAs. In an article published by Lexology she advises companies to focus on “high-efficiency” and “large-capacity” technologies.
This may have an impact on China’s growing distributed solar and wind sectors.
Distributed projects are much more likely to be run by smaller companies who may not have the resources to adapt to the new mechanism, according to Fishman, which could cause opportunities for distributed energy to “dry up”.
At the same time, the new policy may also force renewable energy power companies to innovate – both in terms of technology, and of business models and management practices, says Dr Muyi Yang, senior energy analyst for Asia at the thinktank Ember.
Yang tells Carbon Brief:
“[The new regulations] will help shift the clean energy sector from ‘subsidy-dependency’ to being ‘innovation-driven’ and contributing to innovation-based growth – what is often referred to in China as ‘new quality productive forces’.”
Stronger in the long-term?
The new pricing system may nevertheless give wind and solar the advantage in the long-term. Reform of the power market has long been seen as crucial to increasing uptake of renewables.
The new prices are expected to be much lower than the tariff for coal power. Myllyvirta writes that wind and solar, as the “most affordable” sources of power, should be able to “hold their own in competition if the rules are set right”.
The cost of developing solar and wind power has halved over the past ten years, an expert tells 21st Century Business Herald.
Yang tells Carbon Brief that the pressure of being subjected to the market could make low-carbon energy “more competitive” and “help reduce inefficient investment”, which will be a “critical factor for the long-term transition of China’s energy sector”.
But local governments would need to take steps to maintain investor confidence in the face of low prices, Fishman says. For example, significantly raising provincial renewable consumption targets could provide a strong demand signal, showing wind and solar developers that there is still a “way to make money” through increased volume.
If the government “gets the numbers just a little bit wrong”, he says, the amount of new wind and solar being added to the grid “will drop off a cliff”.
At the same time, coal-fired power plants are continuing to receive policy and financial support, in the form of guaranteed demand from long-term contracts and compensation to keep excess capacity online.
China has ramped up construction of new coal plants, with almost 100 gigawatts of new capacity expected to come online in the next few years, according to recent research by CREA and Global Energy Monitor.
If they are not exposed to competition in the same way that wind and solar farms will be, Myllyvirta argues, then renewables may be “crowded out from the power market by inflexible coal plants”.
Fishman is more sanguine about the future role of coal, however. He tells Carbon Brief that the new policy may give coal plants “a little bit of a boost” in the short-term, but that China’s carbon peaking goal sets a hard deadline for reducing their role in the power system and means they will face “diminishing returns”.
He adds that the real competition for coal plants are other coal plants, as only the “newest, the most efficient [and] the super-critical” plants will have a future as China moves towards carbon neutrality.
The post Explainer: How China’s renewable pricing reforms will affect its climate goals appeared first on Carbon Brief.
Explainer: How China’s renewable pricing reforms will affect its climate goals
Starting on Monday, about 10,000 government negotiators, scientists, journalists and campaigners will gather at a purpose-built venue in a national park in Mongolia’s capital Ulaanbaatar to discuss how to stop land turning into desert as the world warms.
Drought is currently sweeping much of the Northern hemisphere, leaving normally green urban parks looking like dry savannah, causing crops to fail, food prices to rise and billions to be shaved off economic output.
On Wednesday, Britain’s prime minister chaired an emergency meeting of the government’s Cobra committee. These are usually reserved for wars, terrorist attacks, riots and pandemics – but this one was on the extreme heat and drought the UK has been suffering since May.
With many countries facing far worse with fewer resources than the UK, the issues to be discussed at the UN’s COP17 summit in Mongolia – often overlooked – should be nearer the top of policy-makers minds.
But what is COP17? What will be decided and announced there over the next two weeks? How does it relate to climate change and how will it help restore the lands on which we all rely for our food, water and other essential resources? Climate Home News explains all below.
What is COP17?
It is the conference of parties (COP) to the United Nations Convention to Combat Desertification (UNCCD). The parties are 196 governments, which includes all of the countries recognised by the UN.
The convention was conceived at the Rio Earth Summit in 1992, at the same time as the other two larger “Rio trio” conventions on climate and biodiversity.
While the climate convention’s COP takes place every year, the UNCCD COP happens only once every two years. COP17 will be its seventeenth gathering.
What is desertification?
It is the process by which land degrades and becomes more like a desert, making it harder – and sometimes impossible – to grow crops or graze livestock there.
Climate change and other human activities – like excessive irrigation which depletes ground water – are making this process worse, causing poverty, hunger, health problems, forced migration and loss of species.
It’s a widespread problem. The UN estimates that half a billion people live within areas that have experienced desertification since the 1980s and that two-fifths of the world’s land is degraded.
What has it got to do with climate change?
The planet’s climate is heating up, mainly due to humans burning fossil fuels, and drying out its land. This kills plants and exposes the soil which can then be blown away by wind and washed away by water.
Without a top layer of soil, plants struggle to grow again and the land gets closer to being a desert. So combating desertification is a way of adapting to climate change.
It is also a way of lessening the pace of climate change, as land degradation releases carbon dioxide previously stored in healthy soils and plants.
What will be negotiated at COP17?
The main issue is what form a new initiative to tackle drought could take. The last COP saw Africa push hard for this to be a protocol – a kind of binding sub-treaty to the UNCCD.
But the US, Europe, Argentina and others argued that would take too long to set up, cost too much and take money away from what can be spent on the ground. They prefer a legally weaker alternative – a framework instead of a protocol.
Negotiations went late into the last night of talks in Riyadh, with the Saudis hosting informal consultations, but eventually governments had to agree to disagree and pick up talks again in Ulaanbaatar.
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Governments will also negotiate a new policy on protecting rangelands and pastoralists from degradation. Rangelands are areas where animals graze. They cover around half the Earth’s land and include almost everything other than forest, deserts, farms, glaciers and cities. Pastoralists are people who herd animals on these rangelands, often moving from place to place to find fresh pasture.
COP17 host country Mongolia has a lot of both – and pushed successfully for the UN to declare 2026 the International Year of Rangelands and Pastoralists. It is keen to agree a decision at COP17 bringing those issues more to the forefront of the UNCCD.
Negotiators will also debate the UNCCD’s post-2030 strategic framework, which they hope to adopt at COP18 in 2028. Campaign groups like the World Wildlife Fund want a stronger focus on biodiversity and nature-positive food systems.
What will happen when?
The COP will formally open with a ceremony on Monday August 17, followed by opening statements by governments and the adoption of the agenda.
Negotiations will begin, mostly behind closed doors for two weeks until the closing plenaries on Friday August 28.
While talks rumble on in the background, the second week will see senior government representatives including ministers get involved, with a “high-level segment” running from August 24-26.
They will discuss issues like drought resilience, finance and pastoralist communities. This is likely to be when any announcements – of new funding, for instance – are made.
On Monday August 24, there will also be an open dialogue between government officials and civil society members. Here, local practitioners are likely to share stories of how they are helping their communities reverse land degradation. UNCCD prides itself on being a bottom-up convention.
Unlike climate COPs, which often end a day or two over time, UNCCD COPs usually finish on the evening of their last day and – while they have gone late into the night – have never run into the next day.
What else should we watch out for?
At the last COP two years ago, host Saudi Arabia led the creation of an initiative called the Riyadh Global Drought Resilience Partnership to help 80 of the poorest nations deal with drought.
It received $12 billion in pledges, mainly from Gulf-based development finance institutions. Saudi Arabia is expected to report back on whether these pledges have been delivered and how the money will reach those in need now.
There are also hopes that governments will announce financial support for Mongolia’s Rangelands Flagship Initiative, which aims to mobilise investment in projects to fight land degradation.
Who will preside over COP17?
While the last five and the next two climate COPs have been or will be presided over by men, COP17 will be woman-led with Mongolia’s foreign minister, Battsetseg Batmunkh, as president.
This will also be the first COP for the UNCCD’s new executive director Yasmin Fouad. Before being appointed environment minister in her native Egypt, Fouad was a scientist and lead author of the Intergovernmental Panel on Climate Change’s special report on desertification. She played a key role at the COP27 climate summit in Egypt in 2022.
Although Saudi Arabia’s UNCCD COP presidency is ending, the Gulf power house will likely continue to be influential. It has supported the COP financially as part of the Riyadh-Ulaanbaatar action agenda and will be following up on initiatives announced two years ago.
While Saudi Arabia is often blamed for obstructing progress at climate talks, as a desert nation it is generally thought to have played a constructive role at UNCCD COPs.
What are the negotiating dynamics?
The UNCCD has six main negotiating groups: Africa, Asia, Latin America and the Caribbean, the Northern Mediterranean, Central and Eastern Europe, and developed donor countries. Governments can also speak in their own capacities.
While divisions between the Global North and Global South do exist at UNCCD COPs, they are not as stark as at climate COPs. The Global South’s umbrella group – the G77 and China – usually only speaks on finance issues, on which developing countries tend to be united.
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Civil society groups are present but not as vocal or as confrontational as at climate COPs. There are generally no protests and campaigners tend to try to hold governments accountable more quietly. There are likely to be far fewer journalists than at climate COPs too.
What role will the US play?
While the US has left the UN’s climate convention, it remains in the UNCCD and is expected to bring a delegation of officials from its departments of agriculture and state. It is likely to resist any renewed push from Africa for a drought protocol.
The post Will the world’s drying lands get relief from COP17 in Mongolia? appeared first on Climate Home News.
Will the world’s drying lands get relief from COP17 in Mongolia?
Helen Phillips’ book, ‘Hum’, is set in a dystopian near future, in a city suffering the effects of climate breakdown and with dire air quality. Robots (the Hums) press advertising messages during conversations, meetings and even as they carry out medical procedures.
The Hums are vehicles for these ad messages, which are often for products like cosmetics, sweets or anything that might be relevant during interactions with humans. This advertising is poorly disguised, and merges with sentiments that lean towards concerns of well-being, convincing people how much better off they’ll be if they make a purchase.
While the novel is futuristic, the insidious way advertising permeates daily life is resonant of how adverts show up in our world today. And these ads are directly contributing to the worsening future climate Phillips describes in her book.
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Already by the summer of 2026, Europe had seen a 57% increase in wildfires in just four years with western Europe recording the hottest ever June and July on record. We’re facing droughts and floods, as well as predicted hikes in food costs or even chronic food shortages – and that’s before the expected additional effects of a strong El Niño later this year.
Frequent flying and bigger burgers
A portion of this climate breakdown is fuelled by over-consumption in richer countries, particularly of products that are high carbon – for which advertising can take some of the blame. Research shows that adverts drive citizens to consume about a third more goods and services in general, over and above what they might have purchased.
Yet despite a clear link between promoting high-carbon behaviours and climate breakdown, little advertising regulation exists in the UK. Take frequent flying for instance, one of the most carbon-intensive activities we can partake in.
EasyJet’s latest ad campaign is called “Drop Everything”. It encourages consumers to book cheap flights departing within the next 48 hours for presumably short or weekend getaways. Rather than promoting a specific destination, “Drop Everything” promotes a mindset that encourages indiscriminate consumption of flying. The ads were shown on billboards with clever creative slogans, as well as on digital media and through influencer campaigns.
Overall, flight numbers are increasing. The UK Civil Aviation Authority reported the highest number of UK passengers in the first quarter of 2026 (more than 61 million, breaking previous records for travel between January and March). It seems we’re still not joining the dots between flying and a worsening climate.
And how about meat consumption? Scientists advocate for less meat-eating, especially beef which has the highest carbon footprint of nearly all foods. Yet adverts from McDonald’s proliferate, helping make it one of the highest-volume sellers of fast-food chain beef burgers. In 2024, the outdoor advertising budget for McDonald’s UK rose to £86 million, an increase of 71% on previous years.
Small share for sustainability
While over half of UK ad professionals feel increasingly queasy about their profession and its effects on the climate crisis, the people running the show – the UK trade bodies – prefer to focus on the growth advertising brings.
In the first three months of 2026, they stated that UK advertising spend increased by 9.3%, reaching a total of £11.7 billion for that quarter, fuelling consumption and market growth.
But how many of those adverts actually promote low carbon goods and services? Kantar’s Sustainable Ads Tracker shows the percentage of ads featuring sustainability messaging in 2026 is around 4.3%. That’s woefully low, and much of this is made up of messaging that promotes recycling.
Additionally, the ad industry continues to happily produce adverts for the large oil and gas corporations that are fuelling climate breakdown. These adverts only narrowly pass the Advertising Standards Authorities’ advertising codes, allowing the continued greenwashing of the world’s most polluting brands.
There is essentially no leadership from the UK trade bodies, likely because they are directly funded by the brands and advertisers themselves. They are essentially ‘ad shushing’ – pushing for indiscriminate growth and directing attention to their sustainability awards, while confusingly denying that adverts drive higher consumption overall.
Let’s ‘un-shush’
Where does this leave us as we are subjected to hundreds, if not thousands, of persuasive advertising messages every day that support high-carbon lifestyles? Most ad professionals are unable to push back against this agenda at work, often due to the threat of job loss. The advertising trade bodies won’t take the lead as they work in service to big brands and advertisers.
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So, who can push for the changes we need? Members of the public.
Through pressuring our city officials and governments, we can force through restrictions, such as the watershed bans on unhealthy foods on TV before 9pm in the UK. Through supporting the efforts of organisations such as Ad Free Cities and others, we can help achieve bans on outdoor advertising for fossil fuels, aviation, meat and even single-use plastics in cities and regions such as Amsterdam, The Hague, Edinburgh, Florence, Uppsala and many more.
If we’re serious about climate change and stopping big global brands pushing their high-carbon products onto us, then advertising restrictions are one of the best ways to achieve this. If we don’t want a world like the one Phillips describes in her book, we need to make our voices heard above the advertising noise.
The post Pushing the climate crisis: How advertising fuels high-carbon lifestyles appeared first on Climate Home News.
Pushing the climate crisis: How advertising fuels high-carbon lifestyles
An upcoming UK government consultation on weakening targets for electric vehicles (EVs) could cost consumers as much as £3bn a year by 2030, according to Carbon Brief analysis.
It could require the UK to import an extra 17m barrels of oil in 2030, raising expected net imports by 8%, as well as adding 2.5% to national emissions that year, the analysis shows.
After years of fierce lobbying by parts of the car industry – and despite the significant savings on offer for EV drivers – media reports suggest that EV targets could be “watered down”.
Under current rules, battery EVs – BEVs, those which run only on electricity – must make up a rising share of new car sales in the UK.
This policy, known as the “zero-emission vehicles” (ZEV) mandate, was introduced by the previous Conservative government and sets a goal for 33% BEV sales in 2026, rising to 80% in 2030.
(Carmakers are able to use “flexibilities” to help meet their targets, which reduces the effective target under the ZEV mandate to an estimated 25% of sales in 2026.)
Now, the government under new Labour prime minister Andy Burnham is reported to be considering a cut in the BEV target for 2030 to just 50% of new car sales, alongside options for 60% or 70%.
Carbon Brief understands that a consultation on weakening the ZEV mandate is being reviewed by the prime minister’s office in Number 10, ahead of being formally released.
If the mandate is weakened to 50% by 2030 – and if carmakers make more use of “flexibilities” – there could be up to 3m fewer BEVs on UK roads by 2030, according to the NGO T&E.
Previous Carbon Brief analysis found that BEVs are around £1,100 cheaper to run per year than a petrol car, thanks to far lower fuel costs.
Overall, BEVs are more than £1,000 per year cheaper to own than either petrol cars or plug-in hybrids (PHEVs, which can run on petrol or electricity).
This is according to analysis of the “total cost of ownership” by the Energy and Climate Intelligence Unit (ECIU), including purchase price, fuel costs, insurance and proposed pay-per-mile charges.
In total, Carbon Brief analysis shows that UK drivers could be hit with an extra £3bn in annual ownership costs by 2030, if the ZEV mandate is weakened, as shown below.
A weaker ZEV mandate could “put billions of pounds of committed investments at risk”, reports BusinessGreen, including in the EV charging network and battery supply chains.
Industry group Energy UK says that the mandate is “working in the way it was designed to work” and that it is the “single biggest driver of emissions reductions” in government climate plans.
However, Carbon Brief analysis shows that a weaker ZEV mandate could result in an extra 7.4m tonnes of carbon dioxide emissions (MtCO2) in 2030. This would add the equivalent of 2.5% to national emissions in 2030, under the UK’s international climate goal for that year.
In addition, a weaker ZEV mandate could result in the UK needing to import an extra 17m barrels of oil in 2030, equivalent to 8% of projected net imports that year.
Energy UK says that shifting to EVs will help to reduce household energy bills “for everyone”. This is not only through direct cost-of-ownership savings for EV drivers, but also by spreading the costs of upgrading the electricity system across a wider user base.
Car industry group the Society of Motor Manufacturers and Traders claims that its members are spending “blilions…on discounts, finance incentives and marketing support” and that “natural” EV demand is below the level required to meet the current ZEV mandate. Its claims are disputed.
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The post Analysis: Weaker EV targets could cost UK consumers £3bn a year by 2030 appeared first on Carbon Brief.
Analysis: Weaker EV targets could cost UK consumers £3bn a year by 2030
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