At the start of 2024, China introduced a new system of “capacity payments” designed to help coal-fired power stations shift into a supporting role, alongside low-carbon sources.
In theory, the payments should make it financially viable for coal plants to operate less frequently, switching off unless there is insufficient output from renewables and nuclear.
However, new Global Energy Monitor (GEM) analysis finds that, despite channeling 107bn yuan ($14.9bn) to China’s coal-plant owners during its first year, there is no clear evidence that the scheme has reduced the amount of hours during which coal plants are operating.
Moreover, the analysis shows that some 70-100% of China’s coal plants received payments, depending on the province, boosting their revenues by around 5-8%.
As such, the way the mechanism has been implemented continues to raise questions about its effectiveness in supporting renewable growth and China’s wider energy-transition targets.
Rather than encouraging operators to reduce operating hours and emissions, the loose application of eligibility “guardrails” means it could be prolonging coal-plant lifetimes instead.
A ‘supporting’ role for coal
Like many other countries, China faces the complex challenge of how to decarbonise its power sector while keeping the electricity grid reliable.
Following widespread power outages in 2021 and ongoing debates over how to manage the transition, the National Development and Reform Commission (NDRC), China’s powerful central planner, announced a new coal capacity payment mechanism in late 2023.

The policy, which took effect in January 2024, aims to maintain grid reliability, while supporting coal-fired power plants as they shift from a primary electricity source to a “regulating and supporting” role in China’s power mix, according to Han Xue, associate researcher at China Development Research Centre of the State Council.
The mechanism provides what is essentially a monthly “standby” payment to eligible public coal plants (see below). The payments are designed to help cover fixed operating costs during periods when coal plants’ output is low, often as a result of high renewable generation. They are also intended to ensure that coal plants are available to switch on during peak demand periods.
The national framework sets payment levels at either 30% or 50% of a benchmark coal plant’s total fixed costs, which the NDRC determined to be 330 yuan ($45.8) per kilowatt (kW).
The higher 50% rate applies in provinces where the role of coal power supply is transitioning rapidly, such as Chongqing and Sichuan in southwest China as well as Hunan in the south. However, from 2026 the rate will increase to at least 50% of the fixed costs nationwide.
To illustrate the mechanism’s impact, consider a 600 megawatt (MW) coal plant running at China’s 2024 average rates. It would be operating for 4,628 hours a year and selling electricity at 0.452 yuan ($0.063) per kilowatt-hour (kWh). This plant’s annual revenue would stand at about 1.2bn ($174m) yuan.
If it receives a 30% capacity payment, roughly 59.4m yuan ($8.2m) would be added to its bank account, driving up the revenue by 4.7%. If the rate is at the 50% level, the bump rises to 7.9%.
Capacity market criticism
From the outset, the policy drew questions and criticisms. Capacity markets in other countries have also sparked debate, including in the UK, Chile and Spain.
Early in the first year of implementation of China’s capacity payments, energy media outlet China Energy News quoted experts saying that the mechanism would gradually change the coal producers’ mindset of “the more they generate, the more they earn”.
However, other “restrictions” of the mechanism, such as the 330 yuan pay rate being “too low”, would “limit” its “effect” on transition, according to the outlet.
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Energy research institute the Regulatory Assistance Project (RAP) had pointed out that the mechanism is restricted to coal, excluding the “participation of alternative resources” able to offer similar services, such as energy storage or demand response.
Issues with the policy meant that it could encourage older coal plants to remain online, as well as potentially “exacerbating” the continued construction of new capacity, according to RAP.
After one year of China’s programme, GEM’s analysis finds that, while the policy has contributed to coal power plant revenue, there is still little definitive evidence to show that it is shifting coal to a “supporting” role, as intended.
This raises continued questions about the mechanism’s design, its implementation and whether it aligns with China’s long-term climate and energy objectives such as the “dual-carbon” goals.
Adding to the complexity, Lauri Myllyvirta, lead analyst at thinktank the Centre for Research on Energy and Clean Air, highlights a regional divide in China’s power mix from 2020 to 2024 in an article for Dialogue Earth.
He says that northern provinces have made more progress towards integrating clean energy than the southern regions, which have been “complacent” due to rich hydro resources. In contrast, others have invested more in wind and solar capacity, as well as in coordinating grid operation with neighbouring areas so as to better manage variable renewable output.
These regional disparities complicate any assessment of the capacity mechanism’s impacts.
Capacity payments ‘top 100bn yuan’
Only 12 provincial governments have released lists of qualifying plants, providing rare insight into how the capacity payment policy is being implemented.
These provinces represent just 38% of the country’s total operating coal capacity, meaning most of the national implementation remains undocumented in the public domain.
This partial picture makes it difficult to assess the policy’s broader outcomes, particularly as provinces appear to apply eligibility and enforcement criteria differently.
Based on the national policy’s payment levels and the 12 provincial recipient lists, the capacity payments in these provinces alone was more than 40bn yuan ($5.5bn) in the first year of the scheme, as shown in the figure below.
Combining the total operating capacity and payment numbers from the 12 provinces that have published data with GEM’s most recent national capacity figures, our analysis estimates that the total national payout in 2024 was approximately 107bn yuan ($14.8bn).
(This figure is uncertain. Greater transparency would help clarify how the mechanism is functioning and its role in shaping the future of coal in China’s power system.)

As shown in the figure above, capacity payments vary significantly across provinces. Of those 12 provinces with detailed published data, Henan in central China received the largest share, totaling approximately 9.4bn yuan ($1.3bn), driven by both its large eligible capacity of 56.9 gigawatts (GW) and the high payment rate (50% level).
Among the 12 provinces, Guangxi (20.5GW) and Yunnan (11.2GW) in southwest China, as well as Qinghai (2.9GW) in northwest China also applied the 50% payment rate, but their smaller eligible coal capacity resulted in comparatively lower total payments.
Broadly, the rankings of total capacity payments align with those of total operating coal capacity by province, which is expected given the direct link between capacity and payment eligibility.
However, the alignment is not exact. Yunnan, for example, ranks 11th out of 12 provinces in terms of operating capacity but 8th in total capacity payments.
This reflects how provincial differences in payment rates and eligibility shares, not just installed capacity, are shaping the financial impact of the policy.
Despite restrictions, most coal capacity is eligible
By cross-referencing provincial recipient lists with GEM’s Global Coal Plant Tracker (GCPT), it is possible to estimate the share of each province’s coal capacity receiving payments.
In almost all of the 12 provinces that published recipient lists, a large majority of coal capacity is eligible for payments, as shown in the figure below.

The NDRC national guidelines published alongside the policy announcement stipulate that only “compliant, public operating coal units” are eligible for the capacity payments. The guidelines identify three categories of coal-fired power plant units that are excluded:
- “Captive” units, which exclusively serve specific industrial or commercial entities and operate independently from the public power grid;
- Units failing to meet energy efficiency, environmental performance, or operational flexibility standards;
- Units not compliant with the broader “national plan”, a criterion that is not further clarified in the guidelines.
Despite these restrictions, most provinces with available data include between 70% and 100% of their total coal capacity under the mechanism, as the chart above shows.
In some cases, this appears inconsistent with the eligibility criteria. For example, the Mancheng Mill power station in Hebei in northern China has two 35MW combined heat and power (CHP) units, which started operating in 2018 to provide heat and power exclusively to a pulp and paper industrial park. This appears inconsistent with the “captive unit” exclusion.
In line with concerns raised by RAP, some newly built coal power plants were included in the initial provincial recipient lists, or added at a later date. For example, Beihai Bebuwan power station Unit 4 in Guangxi began operating in March 2024 and was added to the recipient list in September 2024. The inclusion of such projects could be interpreted as an incentive for new coal capacity, under the banner of grid reliability.
Although plant age is not explicitly disqualifying, coal power plants in China generally have a 30-year design lifespan. Yet older units are included in recipient lists in multiple provinces.
Shenhua Panshan power station Units 1 and 2 in Tianjin in northern China, for instance, began operating in 1994 and were retrofitted in 2023. Their continued inclusion raises questions about whether the policy supports transition, or extends the operational life of ageing assets.
It also highlights uncertainty around how retrofits will be treated, if undertaken after the policy entered force at the start of 2024, and whether such units will be firmly excluded from eligibility.
Finally, several provincial lists include smaller units, which may have limited ability to contribute to peak demand management. For example, five 57MW units from Shaoxing Binhai power station in Zhejiang, southeast China, built to provide heat demand for local dyeing and printing industries, were accredited for capacity payments.
Their actual contribution to evening peak load, when generation from solar and wind is low, is unclear from the list or other available provincial assessments.
More questions than answers?
There was only two months between the announcement of coal capacity payments and their implementation, leaving no time for pilot programmes or detailed feedback. This may help explain the ambiguities that have emerged during the provincial execution process.
Our analysis of the first year of the scheme suggests that provincial discretion has played a major role, with national criteria loosely applied in practice.
Moreover, there is no clear evidence to date that the mechanism has led to reduced coal utilisation hours, or significantly increased solar and wind generation.
While electricity generation from coal decreased in northern provinces during 2024, our analysis found that this was not the case in southern regions.
Different factors contribute to these regional differences, such as power demand and clean-energy resources. With only one year of data from the capacity payment scheme, it is not possible to attribute these changes solely to the capacity payment scheme.
To better align the mechanism with its stated goals, future adjustments could consider specifying coal-plant eligibility criteria more clearly and transparently.
Expanding the scheme to non-coal resources, such as energy storage, demand response or energy efficiency, could help it contribute to wider system flexibility and transition objectives.
Finally, ongoing monitoring of provincial implementation and energy trends will allow for a clearer assessment of how the policy evolves in the coming years.
The post Guest post: China’s ‘capacity payments’ boosted coal-plant revenue by up to 8% appeared first on Carbon Brief.
Guest post: China’s ‘capacity payments’ boosted coal-plant revenue by up to 8%
Climate Change
“We’ve gone backwards” – new plastics treaty text dims hopes for production curbs
A new draft text to revive deadlocked UN plastics treaty talks does not include specific measures on managing runaway plastic production, a growing source of greenhouse gas emissions, drawing criticism from some countries and campaigners that ambition for the global pact is shrinking.
After diplomats met in Nairobi early in July for the first time since negotiations fell apart a year ago, Chilean ambassador Julio Cordano, who is chairing the talks, released a first document last weekend, setting out elements of a possible treaty to tackle plastic pollution.
Cordano stressed this is an “informal reference document” rather than a negotiated text. But its structure is similar to a draft treaty and closely resembles the previous version rejected by governments during the last round of formal negotiations in Geneva.
The new text recognises the world’s “unsustainable” levels of plastic production and consumption, both of which are projected to nearly triple by 2060. But it contains no measures to stem that growth, critics say, pointing to what they see as a broader weakening of ambition.
They argue the document is increasingly aligned with the demands of fossil fuel-producing countries, including Gulf states, the US and Russia, which have pushed for the treaty to focus on managing plastic waste rather than limiting production.
“When you leave the countries that have the most vested interests in delaying meaningful action to shape the agenda, you end up with a text that does nothing to end plastic pollution,” said David Azoulay, environmental health programme director at the Center for International Environmental Law (CIEL).
France disappointed with production omission
“We’ve gone backwards rather than forwards,” Christina Dixon, a campaigner at the Environmental Investigation Agency (EIA), told Climate Home News. “A text that was rejected by the majority of countries in Geneva as being too weak and not ambitious enough has been repackaged one year later with some key elements removed and put out as a kind of sign of progress.”
A French diplomatic source told Climate Home News it was “disappointing” that the text lacked any concrete provisions on tackling “unsustainable” levels of plastics production and consumption. That is despite a majority of countries repeatedly advocating for curbs and scientists saying the world cannot put an end to plastic pollution without tackling the issue at source, they added.
Governments across Europe, Latin America, Africa and the Pacific islands have previously called for efforts to limit the manufacturing of plastics to “sustainable levels”, but their efforts have been frustrated by strong and persistent opposition from a small group of fossil fuel producers, who see plastics as a growing market for oil and gas.
Weakening of production ambition
Cordano told Climate Home News that the “concept” of sustainable production is still reflected in different parts of the new document.
But measures aimed at achieving that objective have progressively weakened over time. Initial versions of the draft treaty, dating back to 2024, included a standalone article with the option of setting a global target to reduce the production and consumption of primary plastics.
That disappeared from successive drafts published in Geneva last year. The last version nevertheless said data on plastic production could be considered in future assessments of whether the treaty was meeting its objectives. Observers saw this as an important provision that could have strengthened the pact over time and potentially kept the door open for a global production target.
The new text only mentions “sustainable production” in the preamble and includes an article saying that countries could improve the design of plastic products in order to contribute to “sustainable production”.
“There’s a war of attrition element,” said Dennis Clare, a negotiator for the Pacific island nation of Micronesia. “The countries that want to do less are dragging out discussions and gradually pressuring the more ambitious to compromise towards a lower common denominator.”
Little space for thorny discussions
Countries have twice failed to agree on a global plastics treaty at what were meant to be final rounds of negotiations in December 2024 and August 2025. After being selected as the new chair earlier this year, Cordano has been working to steer the process back on track through a series of informal meetings, hoping diplomats can find common ground ahead of the next formal negotiations scheduled for early 2027.
But he has been criticised for sidelining discussions on some of the thorniest issues. Cordano kept plastic production off the official agenda for the Nairobi meeting a few weeks ago. He said beforehand that countries could bring any issue to the table, but production did not feature in the summary of discussions subsequently published by the chair.
Clare said discussions on fundamental elements of the treaty, including production, had been “constrained” and that there was little space for them in Nairobi.
Cordano told Climate Home News the Nairobi talks had provided space both for “reaffirming positions and expressing new ideas”, adding that countries “remain free to raise all issues they consider important”.
Informal talks between negotiators are held behind closed doors and neither the media nor external observers can take part.


Campaigners have accused the chair of making political calculations to reach an agreement at any cost. “He has clearly identified that the only way to achieve an agreement by consensus is to do away with the more complex elements of the treaty like those that deal with sustainable production and consumption of plastics,” the EIA’s Dixon said.
Cordano said he continues to be guided by countries as “they develop their own exchanges and continue working towards possible landing zones”.
Push for more ambition
Governments will debate the new text at another meeting of chief negotiators in Bangkok, Thailand, at the end of September, and a new version of the document is expected after that meeting.
The French diplomatic source said the current text should not be viewed as “an end-product”, but as a starting point that “can and should be improved”.
France, together with the EU and members of the High Ambition Coalition (HAC), will continue pushing for stronger provisions, including measures to address plastic production, the source said.
China’s coal power rebounds as record clean energy goes to waste
The HAC group includes over 70 countries, primarily from across Europe, Latin America, Africa and the Pacific.
Micronesian negotiator Clare said countries on the frontline of the plastics crisis may decide to reject a really weak treaty that puts the burden on them to clean up somebody else’s waste, while producers can keep churning out plastics unrestrained.
“If the treaty does not include essential elements of the solution, even an initial, apparent diplomatic success – an agreement – can come to be seen over time as an environmental failure,” Clare warned.
The post “We’ve gone backwards” – new plastics treaty text dims hopes for production curbs appeared first on Climate Home News.
“We’ve gone backwards” – new plastics treaty text dims hopes for production curbs
Climate Change
South Africa’s offshore oil push meets grassroots resistance in court
Layers of red dust coat South Africa’s Saldanha Bay, a legacy of the one billion-plus tonnes of iron ore exported from what was once a quiet coastal fishing town in the 1970s. Now the government wants to turn this area into the “oil and gas hub of South Africa”, but opposition from local communities and civil society could force a change of plan.
Since 2014 South Africa has developed a strategy for taking “full advantage” of its marine resources, known as Operation Phakisa. It has resulted in the mapping of more than 95% of the country’s nearly 3,000-kilometre coastline for offshore oil and gas exploration.
The plan seeks to “drill 30 exploration wells in 10 years”, which it estimates could lead to the production of an average of 370,000 barrels of oil and gas per day over 20 years, with Saldanha Bay earmarked as a key logistics hub. It also aims to develop other marine sectors like aquaculture, maritime transport and ocean tourism.
However, two major court cases against the government and oil giants Shell and TotalEnergies have challenged those plans, as coastal residents, allied with national civil society groups, have pushed back against oil concessions held by the multinationals, arguing they were not consulted, and that towns like Saldanha Bay could face social and environmental harms from the fossil fuel extraction.
Melissa Groenink-Groves, programme manager at legal nonprofit Natural Justice, said the cases in South Africa could set a precedent for the whole region. “When communities win in the courts, the successes serve as inspiration for other communities to advocate [for] their rights in their own contexts,” she explained.
She added that the legal challenges to Operation Phakisa also develop climate litigation in the African context, and could impact how environmental impact assessments are conducted going forward.
Globally, as the oil and gas industry sets its sights on the ocean, with over 85% of new discoveries in 2024 made offshore, scientists and activists warn it could threaten marine life and coastal communities, and weaken the ocean’s ability to trap excess heat from the atmosphere, fuelling planetary warming further.

Taking oil companies to court
About 300 kilometres north of Saldanha Bay, the Aukotowa Fisheries Cooperative, backed by nonprofits The Green Connection and Natural Justice, has taken TotalEnergies to court over its plans to drill for oil and gas in a 30,000-square-kilometre block off South Africa’s west coast.
The oil exploration block is in a biodiverse marine area bordering Namibia and South Africa known as the Orange Basin, which is a “highly relevant” sanctuary for endangered species, according to Nelson Mandela University’s Institute for Coastal and Marine Research.
Among other grievances, the cooperative maintains that the company’s environmental impact assessment was flawed, failing to consider the project’s contribution to climate change, and that the government “placed the profits of a multinational corporation above the livelihoods of vulnerable coastal communities”. The Western Cape High Court concluded hearings in late March and is expected to deliver a ruling later this year.
Walter Steenkamp, chairperson of the Aukotowa Cooperative, is concerned that the oil and gas drilling will lead to increased inequality, asking “for whom is the development? Definitely not for us.”
In a written statement, TotalEnergies told Climate Home News that it “is a responsible operator fully committed to complying with all applicable South African legislation”.
Southeast Asia’s fragile grids threaten billions in clean energy investment
Communities and climate impacts at stake
On the other side of the country, along South Africa’s eastern coastline, community-based nonprofit Sustaining the Wild Coast and partner organisations challenged Shell and Impact Africa’s exploration permit, arguing that the firms had failed to consult impacted communities – a legal requirement under South African law.
Co-plaintiff Sinegugu Zukulu also said in 2022 that “oil and gas will lead to more emissions, and in the face of climate change, this is wholly irresponsible”.
Following two rulings against the companies by lower courts, the case is now before South Africa’s highest Constitutional Court, which has reserved judgment since September 2025. A ruling against the companies would be final, effectively ending the exploration permit.
Legal expert Groenink-Groves said oil exploration applications under Operation Phakisa have been “granted largely without properly assessing the devastating impact an oil spill could have on small-scale fishers, the risks of drilling in ultra-deep waters, [and] without accounting for climate change impacts associated with oil and gas exploitation”.
She added that exploration applications have often failed to consider coastal management laws and in some cases, cross-border and regional environmental risks.
Shell and South Africa’s Department of Mineral and Petroleum Resources did not respond to written requests for comment.

South Africa’s offshore oil ambitions
Fishers around South Africa, many of whom have for generations relied on marine resources for survival, say the country’s offshore oil and gas push is sacrificing their livelihoods for profit.
“Why do they want to destroy our heritage? We can’t afford to say yes to oil and gas because the ocean is our source of life,” said Carmelita Mostert, a member of advocacy group Coastal Links and third-generation Saldanha Bay fisher.
Yet with unemployment above 30%, alongside high levels of poverty and wealth inequality, the government sees Operation Phakisa as a vehicle for socioeconomic development.
South Africa’s Minister of Mineral and Petroleum Resources Gwede Mantashe has described the court cases as “anti-development”, and claimed that the environmental organisations are funded by the CIA.
Sifiso Dladla, a campaigner with human rights organisation groundWork, argued that the close relationship between the government and the fossil fuel industry – including its 3% contribution to gross tax revenue – limits the potential success of movements pushing for an inclusive energy system. Politicians “need money to win elections. Mining companies need the government to protect them,” he said.
Patrick Bond, a political economist and sociology professor at the University of Johannesburg, said Operation Phakisa only makes economic sense if its social and environmental harms are ignored, adding that “if a genuine social cost of carbon analysis were done in any African fossil fuel project, there would be few – if any – able to justify the projects economically”.
At a global scale, Bond said oil multinationals have the financial backing of European governments – including France’s $2.8 billion stake in TotalEnergies – which can help make local resistance more effective where it has international allies to amplify the messages.
For Saldanha Bay fisher Mostert, the fight is about protecting the livelihoods of coastal communities. “It is my hope that we can stand strong and protest,” she said. “If oil and gas is not allowed, our lives will be much easier and better – but if oil and gas goes ahead we will be in absolute agony.”
The post South Africa’s offshore oil push meets grassroots resistance in court appeared first on Climate Home News.
South Africa’s offshore oil push meets grassroots resistance in court
Climate Change
Millions of kilograms of marine life taken from Australia’s marine protected areas every year, FOI finds
SYDNEY, Tuesday 11 August 2026 — New data obtained by Greenpeace Australia Pacific has found millions of kilograms of marine life are being taken from Australian marine parks by commercial fishers annually, as the government begins its review of the country’s Marine Parks Network.
The data, released to Greenpeace in response to a Freedom of Information request, relates to 18 of Australia’s 60 Commonwealth marine parks, and shows almost 2.2 million kg of marine life is being fished each year, raising concerns about the true catch numbers across all marine protected areas.
Greenpeace is calling for the Labor government to use the once-in-a-decade Marine Parks Network review, announced last fortnight, to ban industrial activities, including bottom trawling, longlining and oil and gas mining, from Australia’s Marine Parks Network, and increase fully-protected ocean sanctuaries within the network.
Elle Lawless, Senior Campaigner at Greenpeace Australia Pacific, said:
“It’s chilling to think of the true scale of destruction happening inside all of Australia’s marine parks, and how much of our precious ocean wildlife, like dolphins, turtles or seabirds, could be pulled out of protected areas as bycatch.
“We’re talking about 6,600 kilograms of wildlife in one day, and that does not include what’s caught in the other 42 marine parks, many of which allow destructive fishing like longlining.
“Australia has made significant progress in securing 52% of its oceans in marine parks; however, this intent is undermined by zones that allow damaging industrial fishing activities, such as bottom trawling and longlining. The review of Australia’s Marine Parks Network is a critical opportunity to fix what isn’t working and finally give our oceans the real protection they deserve.
You wouldn’t expect someone to bulldoze a national park on land, so why should they be allowed to trawl in a marine park?”
“Greenpeace Australia Pacific welcomes the Albanese Government’s review of the Commonwealth Marine Parks Network as a rare opportunity to strengthen our marine parks and ban industrial fishing in Australia’s marine protected areas.”
The documents reveal that the south-west network has the largest catch volume, at 887,160kg per year, followed by the Coral Sea network, which extends out from the Great Barrier Reef, losing significant wildlife at 808,840kg annually.
—ENDS—
Notes:
- More than half of Australia’s Marine Parks Network allow extractive industries, including industrial fishing and oil and gas mining.
- The data, supplied by the Department of Agriculture, Fisheries and Forestry, does not specify how much of the catch is fish or bycatch, like non-target fish, turtles or seabirds, and is available on request.
- Read Greenpeace’s new report: Trawling the Bottom Line
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