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Q&A: What the EU’s new industry and ‘Made in Europe’ rules mean for climate action

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The European Commission has put forward a plan to boost production of EU-made, low-carbon steel, cement and renewables in an effort to rely less on other countries.

The proposed “Industrial Accelerator Act” (IAA) aims to boost “resilient and decarbonised” industrial production in EU manufacturing, says the commission.

Under the proposal, a percentage of products bought from “energy-intensive industries” and other sectors under public-procurement deals would be required to be “low-carbon” and made in the EU.

This includes targets for steel, aluminium and electric vehicle (EV) parts.

Non-EU countries with trade agreements, such as the UK and Japan, could also be included in the “Made in Europe” portion of the plan.

The proposal – which must be approved by the European Parliament and EU member states – could save millions of tonnes of carbon dioxide (CO2) by 2030, claims the commission.

Much of the media coverage on the proposed policy focuses on its aim to tackle reliance on China for low-carbon technologies, while Politico calls it a “climate law in disguise”.

In this Q&A, Carbon Brief outlines the key details of the proposal, what must happen for it to take effect and what it could mean for climate change.

Where does the ‘Industrial Accelerator Act’ proposal come from?

The publication of the proposed IAA follows weeks of delays as the EU attempts to boost its manufacturing industries – which have been struggling with international competition and high energy costs – while also supporting decarbonisation.

Industries such as steel, cement and chemicals produce roughly a fifth of the EU’s emissions, so decarbonising them will be essential for achieving the bloc’s net-zero goals.

The IAA is an effort to help energy-intensive industries cut their emissions while remaining globally competitive, in part by “creating lead markets for low-carbon products”.

It was first announced in the European Commission’s 2024 political guidelines, laying out its priorities for the five years out to 2029.

In the section concerning the EU’s plans for a “clean industrial deal” – referring to broader plans to support industries and accelerate their decarbonisation – the guidelines stated:

“We will put forward an industrial decarbonisation accelerator act to support industries and companies through the transition.”

When the clean industrial deal was subsequently released in February 2025, it said the promised act would introduce “clean, resilient, circular, cybersecure” criteria that would “strengthen demand for EU-made clean products”.

The act was also intended to “speed-up permitting for industrial access to energy and industrial decarbonisation” and “develop a voluntary label on the carbon intensity of industrial products”.

Underpinning these plans was the idea of increasing demand for low-carbon products in public and private procurements – in particular, those that were “Made in Europe”.

The proportion of products that will be included under the “Made in Europe” definition remains unclear. In the final proposal, the commission notes it will “tailor requirements to the specific structure, maturity and dependencies of each sector”.

The word “decarbonisation” was dropped from the act’s title by commission president Ursula von der Leyen in her state of the EU address in September 2025, in order “to allow for a broader sectoral and technological scope”.

This reflects wider disputes within the commission itself around the coverage of the IAA. There has also been strong opposition to the proposed “made in Europe” section of the act from different groups of member states.

The debate has also taken place against the background of calls to weaken key parts of EU climate policy – in particular, the EU emissions trading system (ETS).

Environmental groups have voiced concerns about the climate focus of the IAA being sidelined, at the expense of boosting the bloc’s competitiveness.

A major issue in the discussions has been whether the “made in Europe” label should include “trusted partners” from outside the EU, such as the UK and Switzerland.

The commission’s trade directorate has reportedly pushed for a more open system that includes more countries. Germany has been among the member states warning that restrictive rules could deter foreign investment and raise prices.

Meanwhile, Politico reported that the commission’s growth directorate, supported by France, wanted “made in Europe” to be restricted to countries in the European Economic Area – the 27 EU member states alongside Iceland, Liechtenstein and Norway.

The publication of the IAA proposal – which follows on from the automotive package adopted by the EU in December 2025 – was delayed numerous times amid the disagreements.

According to Politico, “haggling” continued over the Monday and Tuesday before the proposal was released, before it could be agreed internally within the commission by the “college of commissioners”.

What is in the IAA proposal?

Following these tense internal negotiations, the European Commission released its IAA proposal on 4 March 2026. It says the proposal will “increase demand for low-carbon, European-made technologies and products”.

The act sets a goal of increasing manufacturing’s share of EU GDP to 20% by 2035, up from 14.3% in 2024.

It introduces “targeted and proportionate” low-carbon and “made in EU” requirements for public procurement and public support schemes for specific sectors.

These will initially apply to steel, cement, aluminium, cars and net-zero technologies – defined within the proposal as batteries, battery energy storage systems (BESS), solar PV, heat pumps, wind turbines, electrolysers and nuclear technologies. It also establishes a framework that could be extended to other energy-intensive sectors in the future.

The commission notes that these sectors have been chosen due to their strategic importance, as well as being “essential enablers of the clean transition and vital to downstream industries”.

However, it says they are facing declining production in Europe, slower decarbonisation investments and global competition and market distortions, such as unfair subsidies.

For steel, the proposal would introduce a requirement for public procurement and public support schemes to use low-carbon steel within the automotive and construction industries.

This will help “create market demand” and “give investors confidence and predictability, boosting innovation and making clean steel a core part of the EU’s industrial future”, says the commission.

However, this falls short of the 70% low-carbon steel requirement that had been included in an earlier draft of the act, according to Reuters. Other earlier drafts of the IAA proposal had also included an emissions label for steel.

This voluntary carbon-intensity label had previously been set out within the clean industrial deal and had originally been expected to come into effect in 2025, before being pushed back and, ultimately, excluded from the IAA.

Beyond steel, the IAA sets minimum “Made in EU” requirements for public procurement of 70% for EVs, 25% for aluminium and 25% for cement.

The European Commission will now offer the UK, Japan and other like-minded countries the opportunity to be included under the “Made in Europe” manufacturing targets, if they offer reciprocal access to EU-based manufacturers, according to the Financial Times. The outlet adds that this is being welcomed by the UK government, which had lobbied for such access for months.

The measures within the IAA are in line with the recommendations of the Draghi report on EU competitiveness, says the commission. As such, it says they are designed to “increase value creation in the EU, strengthening our industrial base against the backdrop of growing unfair global competition and increasing dependencies on non-EU suppliers in strategic sectors”.

Alongside the introduction of requirements on public procurement within the bloc, the IAA proposal highlights that the EU is “committed to maintaining that openness as a key source of economic strength and resilience”.

The EU hosted almost a quarter of global foreign direct investment in 2024.

To further support such investment and ensure the benefits extend to technology transfer and job creation, the IAA introduces additional conditions for international investments.

These would apply for investments of more than €100m in emerging sectors such as batteries, EVs, solar PV and critical raw materials by companies that hold more than 40% of global production capacities.

Conditions would include EU companies holding a majority share, technology transfer, integration into EU value chains and job creation, according to the European Commission. There would also need to be a guarantee that a minimum of 50% of employees are European.

The introduction of common conditions across the bloc would mean the IAA “strike[s] a carefully calibrated balance by ensuring that strategic foreign investments contribute to Europe’s competitiveness, resilience and industrial transformation, while preventing fragmentation”, according to the commission.

Additionally, EU member states would be required to set up a single digital permitting process to “speed up and simplify manufacturing projects” under the IAA.

This would include dedicated single points of contact and maximum timelines of 18 months for certain projects, such as energy-intensive industry decarbonisation projects or those located in “industrial acceleration areas”.

Member states would designate these areas to encourage strategic manufacturing clusters, it says. The commission adds that projects within these areas would benefit from improved coordination and access to infrastructure, finance and skills ecosystems, as well as faster permitting.

What comes next?

The commission’s proposal will now be negotiated by members of the European Parliament and then by country ministers at the Council of the EU.

After these negotiations take place, the proposal can be adopted and the act can take effect.

But this may not be a simple process, as many countries remain divided on the key terms of the proposed law. (See: Where does the ‘Industrial Accelerator Act’ proposal come from?)

Nine EU countries pushed back on the proposal last December, reported Politico. The UK has been “lobbying” countries including Germany, Italy and the Netherlands to oppose it, according to Bloomberg. Reuters noted that the plan is backed by France.

EU commissioner for internal market and services, Stéphane Séjourné, told a press conference on 4 March that the “faster” the proposal moves through the EU lawmaking stages, the “more stability we will actually have”.

After the law takes effect, the commission says it will evaluate the key results three years later. A full review is then proposed after five years.

What could the act mean for carbon emissions?

The IAA could save around 30.6m tonnes of CO2 (MtCO2) in 2030, according to the European Commission.

According to the impact assessment published alongside the proposed act, the changes brought in for the steel, cement, aluminium, battery and vehicle sectors would drive significant CO2 reductions by 2030.

The document breaks down these emissions savings for 2030 as follows:

  • Producing more batteries in the EU, rather than relying on imports from China, could save 25.6MtCO2. 
  • The 25% low-carbon steel target in the automotive and construction sectors could save around 3.4MtCO2. 
  • Vehicle manufacturing emissions could drop by 0.7MtCO2 due to “shifts in production”. 
  • The 5% low-carbon cement target could save 0.69MtCO2. 
  • The 25% low-carbon aluminium target could save 0.22MtCO2. 

According to the impact assessment, the emissions required to produce a battery in the EU are around 25% lower than a “Chinese manufactured battery using the average Chinese grid”. This is due to “strict” EU environmental standards, it adds.

The report estimates that all of these savings in CO2 would be worth more than €3bn in avoided climate damages.

Streamlining the process for permitting to “accelerate” decarbonisation projects should also “lea[d] to an accelerated pace of GHG [greenhouse gas] savings”, the document says, but does not list a figure for this.

The impact assessment for the IAA proposal notes that there is currently a “structural imbalance” in the EU’s industrial transition.

It states that although emissions associated with industrial production are declining, this is “largely driven by shrinking production”, rather than improved carbon efficiency.

Carbon emissions and production volumes in the EU iron and steel sectors have dropped “almost in parallel” between 2005 and 2023, says the report.

It adds that projections show that these emissions will need to decline “much faster” to meet future EU climate targets.

The “competitiveness and decarbonisation” of EU manufacturing is “unlikely to improve” without further action, such as the IAA, says the report.

In other words, the IAA effectively aims to ensure that emissions cuts can accelerate while maintaining – or even increasing – industrial production within the EU.

What has the reaction to the IAA been?

While many welcomed the IAA proposal as a “first step”, others criticised the final proposal for walking back on the ambition in earlier drafts.

In a statement released alongside the proposal, Stéphane Séjourné, executive vice-president for prosperity and industrial strategy at the European Commission, said the IAA marked a “major step in the renewal of the European economic doctrine”. He added:

“Facing unprecedented global uncertainty and unfair competition, European industry can count on the provisions of this Act to boost demand and guarantee resilient supply chains in strategic sectors. It will create jobs by directing taxpayers’ money to European production, decreasing our dependencies and enhancing our economic security and sovereignty.”

Others shared his sentiment that in the face of a changing international trade environment, the IAA would boost European competitiveness. Neil Makaroff, director at the European thinktank Strategic Perspectives, said in a statement:

“With its first ‘made in Europe’ policy, the EU is embracing long-overdue economic realism and adapting itself to the new brutal global trade reality. Rather than letting the single market be an open outlet for Chinese overcapacities, each euro of taxpayer money can be directed to rebuild Europe’s manufacturing base. This is how Europeans can start learning the language of industrial powers.”

Tinne van der Straeten, the CEO of WindEurope, said the IAA sent an “important political signal”, but “a simple and harmonised implementation of the new rules is crucial”.

WWF highlighted that public procurement is only a small part of the EU economy and called for complementary measures that also target private consumption.

Camille Maury, senior policy officer on industrial decarbonisation at WWF EU, said:

“The commission has finally pressed the accelerator on clean industry by opening the door to create demand for clean products. However, to win the race to decarbonise, the commission and policy makers will need to put effort into strengthening low-carbon requirement criteria and designing truly green labels for steel and cement that exclude fossil fuel-based production.”

In particular, the lack of a low-carbon label for steel within the IAA drew criticism, with, for example, Daniel Pietikainen, policy manager for steel at climate NGO Bellona Europa, saying:

“The Act no longer provides the basis for a low-carbon steel label. While we can work with the Ecodesign Regulation as the vehicle for a steel label, the commission must commit to an ambitious timeline now. Any operational labelling scheme that is contingent on a delegated act with no clear timeline is not a signal; it is a delay.”

Similarly, the exceptions for international investment in emerging sectors, such as batteries and solar, were labelled as a “very disappointing…watering-down” by Christoph Podewils, secretary general of the European Solar Manufacturing Council. In a statement, he added:

“We need ‘Made in Europe’ to ensure the continent’s long-term energy security. The current explosion in energy prices, caused by the war in Iran, demonstrates the importance of being independent of other regions.

“If the European solar industry has to wait another three years after the legislation is adopted, many companies will have disappeared in the meantime due to ongoing unfair competition from China.”

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China Briefing 5 March 2026: New five-year climate goals revealed at ‘two sessions’ meeting

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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

Government ‘work report’ for 2026 announced

LOWER GROWTH: China is aiming for economic growth of 4.5-5% in 2026, reported state-run newspaper China Daily in its coverage of the “government work report” – an outline of China’s policies in 2026 delivered by Chinese premier Li Qiang at the annual “two sessions” meeting of key government and party officials in Beijing. This is the lowest target since 1991, said BBC News, as China “grapples with challenges both at home and abroad”. Li said “geopolitical risks are rising”, noted the Financial Times. The lower GDP target reflects a shift to what Beijing calls “high-quality growth”, said the Guardian.

‘GREEN DEVELOPMENT’: The work report cited the publication of China’s 2035 climate pledge under the Paris Agreement as one of the achievements made last year, noted state-run broadcaster CGTN. Another CGTN article said that “new quality productive forces” also “grew steadily” in 2025, referring to a term that includes “green development”. Financial services firm ING said that the report highlighted priorities for 2026 including “high-quality” and “green development”, as well as domestic consumption, but that it also scaled back China’s consumer “trade-in” policy relative to 2025.

‘LAX’ INTENSITY: The report set a target to cut China’s “carbon intensity” – its carbon dioxide (CO2) emissions per unit of GDP – by 3.8% in 2026, reported Reuters, which quoted Lauri Myllyvirta of the Centre for Research on Energy and Clean Air saying this was “alarmingly lax”. He told Carbon Brief that emissions could rise by up to 0.5-1.0% while still meeting this target.

DUAL-CARBON DOUBTS: The work report said that China’s goal of peaking CO2 emissions before 2030 would be “accomplished as planned” and that a system to control the total amount of emissions would also be implemented, said Bloomberg. The report offers little detail on the shift to this system for the “dual control of carbon”, said Greenpeace East Asia’s Yao Zhe in a statement.

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TRANSITION FUND: Another China Daily article reported that China will “establish a national fund for low-carbon transition” this year. Citing the work report, it said this fund would be used to “foster new growth drivers such as hydrogen power and green fuels”. The newspaper pointed to other climate-related elements of the report, including promoting the “clean and efficient use of fossil fuels” and “zero-carbon industrial parks”, expanding the coverage of China’s emissions trading system and improving systems for carbon accounting.

Pre-meeting positioning

CARBON ‘CO-BENEFIT’S: The Ministry of Ecology and Environment (MEE) published new air quality standards that could “cut CO2 [carbon dioxide] emissions by more than 7bn metric tonnes [over a decade] as a co-benefit”, said the state-run newspaper China Daily. Energy news outlet China Energy Net reported that these co-benefits could come from the new standards “effectively fostering…development of new quality productive forces such as clean energy and new-energy vehicles”, as well as driving low-carbon transitions in the “industrial, energy and transportation” sectors.

GATHERING VIEWS: In a press conference held ahead of the two sessions, MEE spokesperson Pei Xiaofei told Shanghai-based outlet the Paper that 85% of policy proposals submitted to the ministry for the meetings were focused on “building a Beautiful China”, meeting China’s carbon peak and neutrality goals and “tackling pollution”. According to a partial transcript published on the MEE website, MEE atmospheric environment director Li Tianwei said “heavy reliance” on fossil fuels, dominance of heavy industries and “road-centric” transport presented continuing “challenges” for emissions reduction.

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OFFICIAL OUTLOOK: Several director generals of National Energy Administration (NEA) departments published articles on their outlook for the fifteenth five-year plan. Development and planning department head Ren Yuzhi wrote in China Electric Power News that China must “expand the non-fossil energy supply system”, construct a power system “compatible with high proportions of renewable energy” and “promote the peaking of coal and oil consumption”. Head of the new energy and renewable energy department Li Chuangjun argued that the “main” direction for clean energy was “expanding scale, improving quality and ensuring reliable substitution”. The heads of the oil and gas, market regulation and power safety departments also authored articles.

OFFICIAL STATS: Meanwhile, new government statistics showed that China’s energy and industry emissions saw a 0.3% decline in 2025, reported the Financial Times. [The data confirmed earlier analysis for Carbon Brief that also calculated a drop of 0.3%.] The data release also revealed that “solar power generation overtook wind for the first time” in 2025, according to Bloomberg. China’s carbon intensity fell 5.1% in 2025, reported the state-run newspaper China Daily in its coverage of the data. [Carbon Brief put this figure at 4.7%, but the scope of the official data appears to have changed.]

Merz’s many meetings

EXTENDED COOPERATION: China and Germany signed an agreement on climate change during a visit by chancellor Friedrich Merz to Beijing, reported Agence France-Presse. The agreement to “extend” a Sino-German dialogue and cooperation mechanism on “climate change and the green transition” pledged to focus on “energy, industry, energy efficiency and the circular economy”, as well as “further implementing the objectives of the Paris Agreement”, said energy news outlet BJX News. Reuters noted that Germany signed far fewer agreements than the UK or Canada during their own recent visits, quoting Merz as saying that trade dynamics were “not healthy” due to overcapacity.

TECH TOUR: Xi told Merz that Germany’s focus on “technology, innovation and digitalisation…aligns closely with China’s smart, green and integrated development”, reported state news agency Xinhua. Merz later met with the heads of several Chinese technology firms in the eastern city of Hangzhou, including representatives from electric vehicle companies, reported the Hong Kong-based South China Morning Post (SCMP).

OVERCAPACITY OUTCRY: Ahead of Merz’s China visit, EU trade chief Maroš Šefčovič called for adapting global trading rules to account for “overcapacities”, “unfair trade policies” and “state subsidies”, said SCMP, quoting Šefčovič as saying Europe was “monitoring very closely the increase of plug-in hybrid Chinese vehicle” exports to the EU. The International Monetary Fund (IMF) also called on China to halve state support for industry, noting that industrial policies are “giving rise to international spillovers and pressures” and have had a “negative” impact on China’s economy, according to the Financial Times.

More China news

  • ENERGY SECURITY: Chinese refiners have been instructed to “suspend exports of diesel and gasoline” following the outbreak of the Iran war, reported Bloomberg.
  • GET THE GAS: China will waive some import charges for certain oil and gas exploration equipment and gas imports to “improve” energy production and “support” gas utilisation, said energy news outlet International Energy Net
  • LAW REVISIONS: The NEA aims to revise the Electricity Law and Renewable Energy Law in 2026, according to economic news outlet Jiemian.
  • DIPLOMATIC ENDEAVOURS: The party committee of China’s Ministry of Foreign Affairs wrote in the communist party-affiliated People’s Daily that addressing climate change through “concrete actions” is a major element of its diplomatic strategy.
  • SOLAR RUSH: Solar manufacturers are “ramping up production to boost exports” ahead of the cancellation of solar-export rebates in April, reported energy news outlet China Energy Net.
  • DOC DROP: The UK has published its climate agreement with China, signed last year, which includes agreements on “offshore windfarms, electricity grids, battery storage, carbon capture and hydrogen”, reported the Daily Telegraph.

Captured

Climate still among China's top priorities, but overshadowed by economic and social concerns

Spotlight

How climate features in China’s 15th five-year plan

China will set a carbon-intensity reduction target of 17% for 2030, according to a draft of the 15th five-year plan – although analysts note changes to the metric’s methodology.

More broadly, the draft represents continuity with China’s “build before breaking” approach to the energy transition.

Below are some of its key implications for China’s energy transition. A full analysis will be published on the Carbon Brief website tomorrow.

‘Active and steady’ advance

Achieving China’s climate targets will remain a key driver of the country’s policies in the next five years from 2026-30, according to the draft 15th five-year plan.

The draft, released this morning, said China will “actively and steadily advance and achieve carbon peaking”, with policymakers continuing to strike a balance between building a “green economy” and ensuring stability.

Five-year plans are one of the most important documents in China’s political system, outlining policy direction for the next five years.

The latest plan covers the years until 2030, before which China has pledged to peak its carbon emissions. (Analysis for Carbon Brief found that emissions have been “flat or falling” since March 2024.)

China will “continue to pursue” its established direction and objectives on climate, Professor Li Zheng, dean of the Tsinghua University Institute of Climate Change and Sustainable Development (ICCSD), told Carbon Brief.

Carbon-intensity confusion

In the lead-up to the release of the plan, analysts were keenly watching for signals around China’s adoption of a “dual-control of carbon” system that will see targets set for both carbon intensity and total carbon emissions.

Looking back at the previous five-year plan period, the latest document said China had already achieved a carbon-intensity reduction of 17.7%, just shy of its 18% goal.

Analysis by Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air (CREA), had suggested that China had only cut its carbon intensity by 12% over the past five years.

He told Carbon Brief that the newly reported 17.7% figure is likely due to an “opportunistic” methodological revision to include industrial processes.

The draft 15th five-year plan sets a binding target of another 17% reduction in carbon intensity by 2030. The new methodology means that this leaves space for overall emissions to rise by “3-6% over the next five years”, Myllyvirta said.

The plan also did not set an absolute emissions cap, although Myllyvirta noted that a cap may be announced later in the five-year period, or imposed on select industries via China’s carbon market.

Double in a decade

The five-year plan continued to call for China’s development of a “new energy system that is clean, low-carbon, safe and efficient” by 2030, with continued additions of “wind, solar, hydro and nuclear power”.

It also called for a doubling of “non-fossil energy” in “10 years” – although it did not clarify whether this meant their installed capacity or electricity generation, or what the exact starting point would be.

Research has shown that doubling wind and solar capacity by 2035 in China would be “consistent” with aims to limit global warming to 2C.

But the plan continued to support the “clean and efficient utilisation of fossil fuels” and did not mention either a cap or peaking timeline for coal consumption.

“How quickly carbon intensity is reduced largely depends on how much renewable energy can be supplied,” said Yao Zhe, global policy advisor at Greenpeace East Asia, in a statement.

Meanwhile, clean-energy technologies continue to play a role in upgrading China’s economy, with several “new energy” sectors listed as key to its industrial policy.

Named sectors include smart electric vehicles, “new solar cells”, new-energy storage, hydrogen and nuclear fusion energy.

This comes as the EU outlined measures to limit China’s hold on clean-energy industries.

However, China is unlikely to crack down on clean-tech production capacity, Dr Rebecca Nadin, director of the Centre for Geopolitics of Change at ODI Global, told Carbon Brief.

Instead, she said, Beijing is “prepared to pour investment into these sectors to cement global market share, jobs and technological leverage”.

Watch, read, listen

‘A LOT AT STAKE’: The Penn Project on the Future of US-China Relations held a webinar discussing China’s strength in clean-energy industries and how the US should respond.

KEEPING COAL AFLOAT: Electricity Market Tracker explored the impact of China’s coal “capacity payment” mechanism and what it could mean for the country’s energy transition.

TRACKING PRIORITIES: The Oxford Institute for Energy Studies podcast outlined key energy and climate issues to watch in China in 2026.

FINDING BALANCE: The Asia Society Policy Institute unpacked the drivers behind China’s overcapacity challenges and what a “plausible new equilibrium” might look like.


166.6bn yuan 

The direct economic losses ($24.2bn) caused by “floods and geological disasters” in China last year, according to a National Bureau of Statistics data release published by BJX News. China suffered a further 8.6bn yuan ($1.3bn) in losses due to drought, it added.


New science

  • Rising greenhouse gas emissions have caused “icing days” – during which the daily maximum temperature is lower than 0C – to become less common, but more intense in China over 1961-2020 | Journal of Geophysical Research, Atmospheres
  • “A-share listed companies” in China “significantly enhanced” their carbon emission reductions and green innovation over 2007-22 in response to rising “climate risk”, but did not show a significant change to their “environmental protection” | Mitigation and Adaptation Strategies for Global Change

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China Briefing is written by Anika Patel and edited by Simon Evans. Simon Evans contributed to the writing of this edition. Please send tips and feedback to china@carbonbrief.org 

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China eases climate target but clean energy could still cut emissions, experts say

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China has slightly weakened its headline climate target for the next five years, potentially allowing its emissions to rise until 2030, though persistent renewable energy growth could drive reductions faster than official goals suggest, analysts say.

In its five-year plan released on Thursday, the Chinese government pledges to cut carbon emissions per unit of gross domestic product – known as carbon intensity – by 17% between 2026 and 2030. That is slightly below its previous goal of an 18% reduction for the 2021–2025 period, which it had already missed.

Lauri Myllyvirta, lead analyst for the Centre for Research on Energy and Clean Air (CREA), told Climate Home News the target was “underwhelming” and would allow emissions to rise by between 3% and 6% over the next five years, depending on the rate of economic growth.

In reality, China – the world’s biggest emitter – “clearly has the ability to keep emissions falling over this period”, he added.

Solar boom driving down emissions

Emissions from China’s energy and industrial sectors inched down by 0.3% in 2025 – the first full-year decline outside periods of major economic disruption, according to official figures released at the end of February. The drop was primarily driven by a boom in solar power helping to meet a growing share of rising electricity demand, alongside efforts to decarbonise the transport, cement and metals sectors, analysis by CREA showed.

In 2021, China pledged under the Paris Agreement to reduce emissions intensity by 65% by the end of this decade from 2005 levels.

    Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, said economic disruptions during the COVID-19 pandemic, slower growth and reliance on heavy industries had complicated progress, leaving a “daunting gap”.

    The new interim target “indicates a quiet recalibration, effectively acknowledging how difficult the goal has become”, he added.

    Tech expansion over policy targets

    Moving beyond a narrow focus on carbon intensity, Beijing set for the first time last year an absolute emission reduction target, committing to cutting its greenhouse gas emissions by between 7% and 10% by 2035 from unspecified “peak levels”.

    The new five-year plan does not set a cap on total emissions, but some analysts remain optimistic that China’s rapid expansion of renewables and electric vehicles can keep driving down emissions.

    Explainer: Will AI data centres make or break the energy transition?

    Li said that “while officials remain cautious about declaring an early peak, domestic debate is shifting from when emissions will peak to how quickly they should decline”.

    “China’s clean technology development, rather than traditional administrative climate controls, is increasingly becoming the primary driver of emissions reductions,” he added.

    Experts said the new five-year plan shows expansion of clean energy remains central for China, with a target to double non-fossil fuel energy over the next 10 years signalling an increased focus on energy storage, green fuels and plans to clean up dirty industries.

    Myllyvirta said “this has a real chance of keeping China’s CO2 emissions on a downward path”, although “policymakers are not prepared to make such a commitment”.

    Ambiguous signal on coal

    Analysts said the economic blueprint’s ambiguous signal on coal – still China’s largest energy source – complicated the overall picture. The plan advocates a peak in coal consumption, but stops short of setting a target to gradually reduce it, as President Xi Jinping indicated in 2021.

    In 2025, China added the largest amount of coal-fired capacity since 2015, while progress on retiring older plants remains very slow, according to a report published by CREA late last year.

    Andreas Sieber, associate director of policy and campaigns at 350.org, a global, grassroots environmental organisation, said China’s five-year plan showed “insufficient progress” on coal.

    “Expanding wind and solar at record speed is a huge achievement, but it must now be matched with a decisive phase-down of coal and a clear pathway to absolute emissions reductions,” he added in a written statement.

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