The UK government has set out a long-awaited plan explaining how it will cut emissions in the 2030s, on its legally bound path to net-zero by the middle of the century.
Under the Climate Change Act, the government must lay out “carbon budgets” that set limits on the UK’s emissions over five-year periods.
In 2021, the government announced it would cut emissions by 78% by 2035 under its sixth carbon budget, but the “delivery plan” detailing how this would be achieved proved contentious.
The new “carbon budget and growth delivery plan” (CBGD) is the third draft, after the previous two delivery plans were successfully challenged in court.
Unlike previous versions, in this plan the government concludes that it has sufficient climate policies to achieve its sixth carbon budget and “96-99%” of its international obligations under the Paris Agreement.
This is in spite of the government scaling back its expectations for various climate policies, including clean-hydrogen production, tree-planting and carbon capture and storage (CCS).
The CBGD plan comes amid a fractured political consensus in the UK on climate action, with the Conservative party vowing to repeal the Climate Change Act and the hard-right Reform UK party repeatedly attacking net-zero.
Below, Carbon Brief gives an overview of the 363 pages of documents included in the plan, what it says about meeting UK emissions targets and what it means for individual sectors.
- Why is there a new ‘carbon budget delivery plan’?
- What does the new delivery plan say?
- How does the new delivery plan meet the UK’s emissions targets?
- What does the delivery plan mean for the UK economy?
Why is there a new ‘carbon budget delivery plan’?
This is the third version of the sixth carbon budget delivery plan produced by the UK government, with the previous two having been ruled unlawful by the High Court.
The then-Conservative government passed the sixth carbon budget in 2021, legislating an emissions cut of 78% below 1990 levels by 2035. Carbon budgets are interim targets that act as “stepping stones” on the pathway to net-zero emissions by 2050.
However, in July 2022, the High Court ruled that the government had breached sections 13 and 14 of the Climate Change Act in adopting the delivery plan for the budget.
These sections refer to the government’s duty to prepare and adopt policies to meet its climate targets and publish on these policies so that parliament and the public can “scrutinise” them.
It ruled that the then-secretary of state Kwasi Kwarteng had “insufficient knowledge” to adopt the plan, as he did not know what emissions savings individual policies would be responsible for.
The plan also lacked “critical information” on a number of elements – for example, the reason for a shortfall in the emissions cuts, according to the claimants Friends of the Earth, ClientEarth and Good Law Project.
The High Court ordered the government to revise its strategy to correct these errors and a new plan was published in March 2023.
Once again, this was challenged in the High Court. The same claimants argued that the government did not consider “delivery risk” in a lawful way or publish sufficient information to allow meaningful scrutiny of its net-zero policies, among other breaches of sections 13 and 14.
In May 2024, the court sided with the claimants, finding that the secretary of state – by that time Claire Coutinho – had not been adequately informed about the delivery risks associated with the proposed policies. It also called for transparent, evidence-based policies to meet the carbon budget.
The government was given a new deadline of May 2025 to publish another version of the delivery plan. This was later extended to October 2025, as a result of last year’s general election.
What does the new delivery plan say?
The new plan includes an overview document highlighting the government’s key political messages and a 238-page report laying out the details of expected emissions cuts.
The government emphasises how its policies will help the UK to “take back control of our energy” by expanding domestic renewables – cutting bills and boosting jobs in the process.
It also highlights how Labour’s climate plans will improve “quality of life and health”, plus help to “protect our natural environment”.
Other components of the delivery plan include a “technical annex” with details of modelling and accounting, an “investor prospectus” that outlines net-zero investment opportunities in the UK and a methane action plan, with sectoral plans for cutting the greenhouse gas.
The plan confirms that the government has all the climate policies in place to meet the UK’s fourth and fifth carbon budgets, covering the period 2023-2032.
Crucially, it also establishes that the government has enough extra policies in the pipeline to ensure 100% of the emissions cuts required for the sixth carbon budget are also achieved.
This is a step up from the plan released by the previous Conservative government, which only covered 97% of the cuts required for the period 2033-2037.
The new report explains that 76% of emissions cuts for the sixth carbon budget are covered by policies that have already been “implemented, adopted or planned”.
The remaining emissions cuts come from 169 additional proposals and policies that have been modelled by the government for the coming years, ranging from electrified steel plants to accelerated rates of tree-planting. The plan also accounts for another 12 “early-stage” proposals.
In addition to its domestic carbon-budget goals, the UK also has international climate targets under the Paris Agreement, known as nationally determined contributions (NDCs).
Unlike carbon budgets, which provide flexibility by allowing a set amount of emissions over a five-year period, the UK’s NDC goals involve specific emissions-reduction targets for single years, compared to a 1990 baseline.
The government calculates that its plans will cut emissions by 66% below 1990 levels by 2030 and 81% by 2035. These reductions are just shy of the UK’s NDC targets for 2030 and 2035 – representing 96% and 99% of the required cuts, respectively.
(Notably, the 2030 NDC target is more ambitious than the UK’s domestic climate target for that period, as the latter was set prior to the UK committing to net-zero emissions by 2050.)
In the delivery plan, the government says it will “seek to improve delivery and, where appropriate, will explore further measures, to ensure that the UK will meet its international commitments”.
The CBGD plan also considers the risk that government climate programmes underdeliver – for example, due to slow consumer uptake of low-carbon technologies.
Part of the legal case against the previous iteration of the plan was centred on its lack of adequate information about delivery risk. The new strategy appears to include a more extensive consideration of risk, stressing that there are “mechanisms in place to monitor and mitigate risks for each individual policy”.
It also states that the emissions savings for each policy are “credible” because, in cases where risks could not be avoided, the government revised down the emissions savings.
As a result, it concludes
“We, therefore, have confidence that each and every proposal and policy will deliver its planned scenario emissions savings.”
How does the new delivery plan meet the UK’s emissions targets?
The government’s CBGD plan lays out what it describes as a “credible level of emission savings”, enabling the UK to hit all of its upcoming domestic carbon budgets under the Climate Change Act.
Yet, a striking aspect of the plan is that the government has, in fact, significantly scaled back its expectations for several important sectors.
Government forecasts of low-carbon hydrogen production and peatland restoration are among the elements that have been downgraded since the 2023 plan. Expectations for biofuel-crop planting have also dropped to zero hectares in the near term.
Some of these policy areas have underperformed so far, such as tree-planting, or are less-established technologies, such as industrial carbon capture and storage (CCS).
These deployment assumptions have been highlighted in red in the table below. The relatively few sectors that have seen ambition ramped up are highlighted by Carbon Brief in green, while those that have remained steady since 2023 are grey.
Comparison of sectoral deployment assumptions in the new carbon budget delivery plan (2025), compared to previous versions from 2023 and 2021. Source: DESNZ. Chart: Carbon Brief
The rolling back of expectations for key emissions-cutting policies raises the question of how the new plan can still put the UK on track to meet its sixth carbon budget, which covers the period 2033-2037.
First, the “baseline” emissions from which future reductions are calculated is considerably lower in 2025 than it was in the 2023 delivery plan.
This is largely because a set of policies that were previously “under development” have now been integrated into the baseline, as they are considered “implemented or developed”.
These include the zero-emissions vehicle (ZEV) mandate to encourage electric-car sales and the “sustainable aviation fuel” (SAF) mandate to drive the uptake of “clean” aviation fuels.
Together with some modelling adjustments, these changes reduced baseline emissions by 46.1m tonnes of carbon dioxide equivalent (MtCO2e) during the sixth carbon budget period. This shrinks the emissions gap that must be filled by upcoming climate policies and proposals.
Crucially, there are also three new categories of emissions savings that the Labour government has introduced, all of which further reduce this gap.
First, the government has captured the impact of various societal shifts that could affect decarbonisation, using the term “wider factors” to describe such changes. As an example, it mentions “developments in digital technologies including AI”.
Together, the plan states that these factors could “credibly” cut emissions by an extra 99MtCO2e in the sixth carbon budget period.
Second, the government also has a new category termed “other early-stage policies and proposals”. These are ideas deemed too preliminary to fully model, except for the sixth carbon budget period, during which the government estimates they could contribute an extra 43MtCO2e in emissions cuts.
Among these proposals are marine CO2 removals, saltmarsh restoration and policies to boost the market for “low-carbon industrial products”.
Finally, another 24MtCO2e over the sixth carbon budget period comes from what the government calls “cascade effects”. These “occur when changes in one system propagate through connected systems” – for example, when the uptake of net-zero technology becomes a “social norm”, the plan explains.
The combined impact of these three additional factors – none of which were considered in the 2023 plan – can be seen in the chart below.
Collectively, these components help to cut the remaining emissions during the sixth carbon budget period by 34MtCO2e, compared to the 2023 plan, in the government’s forecast. This is enough to meet the target, according to the government, rather than breaching it by 32MtCO2e as the previous plan did.
What does the delivery plan mean for the UK economy?
The CBGD plan includes an overview of how the government plans to make changes across different sectors of the economy, in order to bring down their emissions in the 2030s.
Transport
The transport sector continues to be the UK’s biggest source of emissions, accounting for 26% of the country’s total, the CBGD plan says. This figure rises to 35% when the UK’s contribution to international aviation and shipping is considered.
In 2023, road travel accounted for around 90% of domestic transport emissions, the plan continues, chiefly from journeys by petrol cars and vans.
After entering power in July 2024, the Labour government met a manifesto pledge to reinstate a 2030 ban on the sale of new petrol and diesel vehicles.
This target was originally set by the Conservative government under Boris Johnson’s leadership in 2020, but then delayed to 2035 by Rishi Sunak in 2023 as part of a wider rollback of net-zero policies.
Johnson’s government had also pledged to introduce a zero emissions vehicle (ZEV) mandate to set specific sales targets for car manufacturers in the lead up to the ban.
The ZEV mandate came into force in January 2024. Labour’s CBGD plan notes that it is “driving sales that made the UK Europe’s largest zero-emission car market in 2024 and the third largest globally”.
However, despite growing numbers of EVs on UK roads, the market is currently set to miss the ZEV mandate for 2025. In May, EVs accounted for 21.8% of new car registrations, below the 28% target set by the ZEV mandate.
In April this year, the government made some “tweaks” to the ZEV mandate, including introducing rules allowing manufacturers to count hybrid and plug-in hybrid vehicles towards their pure EV sales goals.
In a letter to the transport secretary, the Climate Change Committee warned that the changes “could encourage a greater role for hybrid vehicles and a reduction in emissions savings”.
In addition, Labour’s CBGD plan sets out less ambitious targets for the total proportion of ZEV cars on UK roads than previous strategies set out under the Conservatives in 2021 and 2023.
Namely, the CBGD plan sets targets of 21% of all cars being ZEV by 2030 and 48% by 2035. This compares to targets of 24% by 2030 and 53% by 2035 set under the 2021 net-zero strategy.
The government’s new CBGD plan notes that key risks to delivering its planned cuts to transport emissions include that “zero emission cars and vans do not displace their petrol and diesel counterparts at the rate we forecast”. This is as a result of lower than anticipated demand or “wider global supply chain challenges”.
Another key risk could be “unanticipated growth in travel demand”, with this being “most acute for our projections of emissions from cars, vans and air travel”, the plan says.
Commentators have noted a lack of new action in the plan to tackle emissions from rising demand for air travel in the UK.
Juliet Michaelson, director of climate charity Possible, said in a statement that the plan “still lacks realistic thinking on the most difficult to decarbonise areas, such as aviation”.
Colin Walker, head of transport at the Energy and Climate Intelligence Unit (ECIU), added that the government is continuing to “pin its hopes for cutting aviation emissions on sustainable aviation fuels and technological innovations that are still very much in their infancy”, while “failing to encourage ultra-frequent flyers from making more sustainable choices”.
Heat and buildings
Buildings remain one of the biggest sources of emissions in the UK, accounting for 74MtCO2e in 2023, or 17% of the country’s emissions.
This is predominantly due to the use of gas in heating systems, with 85% of UK homes using the fossil fuel to keep warm, according to the NGO Nesta.
However, efforts to decarbonise emissions from heating, in particular, have been viewed as contentious in some sections of the UK media, with outlets often referencing the “fury” of the public at policies dubbed “boiler bans” or “boiler taxes”.
One of the most significant policies to cut emissions in the sector is the “warm homes plan”, which the government is planning to publish “shortly”. The plan was set to be published in October, but is now expected after the autumn budget in November.
The scheme was first announced in spring 2025 by the newly appointed Labour government, with the goal of lifting more than a million households out of fuel poverty by 2030. During the spending review over the summer, the government said £13.2bn would be allocated to the scheme.
The policy is set to support the rollout of heat pumps and heat networks, alongside energy efficiency measures and other technologies, such as solar and batteries. More details are set to follow when the warm homes plan is published.
Beyond this, the CBGD plan includes other previously announced policies, such as the “boiler upgrade scheme”, which provides vouchers of up to £7,500 to support the rollout of heat pumps. The plan notes that the budget for this scheme has been almost doubled this financial year to £295 and funding will continue to increase each year up to 2029/30.
The delivery plan states that the government’s “vision is that, over the next decade, low-carbon solutions will become the natural choice for all households”.
It adds that, by the early 2030s, the government expects that more than one million existing homes will transition to low-carbon heating, as part of the “normal cycle of replacing an existing heating appliance (such as a gas boiler) at the end of its life”. By 2035, low-carbon heating will represent the majority of all heating-system replacements.
This new target seems to take over from the previous goal of 600,000 installations a year by 2028, which was included in the previous two versions of the CBGD plan. While the number of installations has been increasing, the UK has consistently fallen short of the level needed to meet this goal.
Additionally, the delivery plan removes the controversial “ban” on the sale of gas boilers in 2035, set under the previous Conservative government. The government notes that it will “continue to refine” its approach in coming years and consider additional interventions if needed.
The delivery plan’s technical annex notes that the modelling does not include any use of hydrogen for heating at present, but that the government will consult on it further in the future. It adds:
“As hydrogen is not yet a proven technology for home heating, any role would come much later and would likely be limited. If we conclude that hydrogen could play a role then some of the savings to be delivered by heat pump deployment in on gas grid homes could instead be delivered through hydrogen heating.”
Industry, CCS and hydrogen
In 2023, the UK’s industry emissions were 64MtCO2e, equivalent to 15% of total territorial emissions, the government says.
According to the CBGD plan, this represents a 12% decrease from 2019 levels and a 60% drop from 1990 levels.
The plan notes that the industrial sector “has a significant contribution to make to enable carbon budgets to be met”.
In June, the government set out a 10-year industry strategy, which it says aims to “drive long-term sustainable, inclusive and secure growth through securing investment into crucial sectors of the economy”.
The plan says that the government will also set out a “refreshed industrial decarbonisation plan”, which will “set the strategic direction for our approach to working with industry towards a competitive and low-carbon industrial base in the UK”.
It continues that the government is “looking at what could be delivered with further government action on resource and energy efficiency, fuel switching and CCUS [carbon, capture, utilisation and storage]”.
The plan says that the government is supporting fuel-switching and energy efficiency through its industrial energy transformation fund, which was launched in 2020 with plans to support the deployment of projects until 2028. (In July, the government confirmed that it is closing the fund to new applicants.)
In June, Miliband confirmed that £200m will be provided to progress the Acorn carbon capture and storage (CCS) scheme in Aberdeenshire, Scotland.
Despite this, the CBGD plan is less ambitious on both industrial resource efficiency and industrial CCS than previous net-zero strategies under the Conservatives in 2021 and 2023.
The government’s 2021 net-zero strategy set a target of industrial resource efficiency providing 11MtCO2e in savings by 2035. However, the CBGD plan has a target of just 5.4MtCO2e.
In addition, the 2021 net-zero strategy targeted 7MtCO2e of industrial CCS by 2035. The CBGD plan targets just 4.3MtCO2e.
The CBGD also cuts back a separate target for engineered greenhouse gas removal (GGR) techniques to provide 5MtCO2 in emissions savings by 2030, first made in the 2021 net-zero strategy.
(Engineered GGRs are technological methods for removing CO2 from the atmosphere, such as by using giant fans to suck the gas out of the air.)
The CBGD revises down this target to just 0.51MtCO2 a year from 2028-32.
Commenting on this decision, Prof Steve Smith, a GGR scientist at the University of Oxford, posted on LinkedIn, saying:
“This revision is reflective of the fact that little-to-no removal tech has actually been deployed in the UK since the 5Mt target was set. 2030 is really not far away in project development terms. We know from 20 years of experience with emission reductions that plans often fall behind (e.g. home insulation, CCS). Sensible strategy involves pursuing new technologies while being live to the risk of over-optimism in them.”
On hydrogen, the CBGD plan says the government is continuing to “support the rollout of hydrogen production to meet demand across sectors requiring hydrogen to decarbonise”.
It notes that, as part of the autumn 2024 budget, the government confirmed support for 11 green hydrogen projects and shortlisted another 27 projects for potential approval in April 2025.
However, the CBGD also significantly reduces ambition on clean hydrogen production, compared to previous net-zero strategies.
The CBGD targets 4 terawatt hours (TWh) of clean hydrogen production by 2030 and 24TWh by 2035. This compares to 40TWh by 2030 and 80-140TWh by 2035 under the 2021 net-zero strategy.
On LinkedIn, Harry Smith, an industrial emissions expert at the consultancy Aether, posted that the “deployment of low-carbon hydrogen no longer meets the 2030 targets set out in the 2021 UK hydrogen strategy”.
A new hydrogen strategy is due to be published this autumn.
Electricity
The power sector now makes up 10% of the UK’s emissions, accounting for around 44MtCO2e in 2023. Of this, gas combustion makes up around 75%.
Overall, the sector has decarbonised significantly, with CO2 emissions per unit of electricity falling by more than two-thirds in a decade, according to previous Carbon Brief analysis.
This is due to the rollout of renewable energy technologies and the closure of coal-fired power plants.
However, the UK has some of the most expensive electricity in the world. While this is due predominantly to gas prices – which set the wholesale cost of electricity 98% of the time – it remains a challenge for driving decarbonisation through electrification.
The cost of electricity in the UK is a key focus of the CBGD plan, which notes:
“The price disparity between electricity and gas needs to be addressed to make it more attractive for consumers to install clean technologies like heat pumps. Over this parliament, the government will be working relentlessly to translate the much cheaper wholesale costs of clean power into lower bills for consumers. This will be core to every decision we make. We will set out our plan in due course.”
The new CBGD plan does not include “rebalancing” the cost of gas bills relative to electricity, as the previous delivery plan did. It also does not consider shifting levies away from electricity bills.
Instead, the focus is broadly on the expansion of clean-power technologies, predominantly through pre-existing policies.
This includes investing in 80 power networks and enabling infrastructure projects, costing an estimated £40bn annually in the coming years. The plan recognises that the electricity network “must undergo unprecedented expansion”. (It is worth noting that, with or without net-zero targets in place, the UK’s grid would need constant investment and upgrades.)
The government also notes that it will work to “ensure appropriate planning arrangements, acceleration of grid connections and strong supply chains” to underpin this.
For example, the “strategic spatial energy plan” was commissioned to the National Energy System Operator in October 2024 and aims to “support a more actively planned approach” to electricity infrastructure.
The CBGD plan often points to the Clean Power 2030 Action Plan, published in December 2024, which set out the government’s approach to decarbonising the electricity sector by 2030.
It states that the government is investing “record amounts in clean energy, climate and nature”, including £63bn in capital funding.
The plan specifically highlights a final investment decision that was taken earlier this year to build Sizewell C nuclear power plant in Suffolk, with £14.2bn in funding allocated to the project. The government has also brought in reforms to the upcoming contracts for difference renewable energy subsidy auction to “maximise competition between bidders and reduce the costs to consumers”.
In addition, the first projects by the government’s new, publicly owned clean-energy company, Great British Energy, have also now been launched.
To support the rapid expansion of power-sector infrastructure, the plan notes that the “urgent need for change means we must undertake a wide-ranging reform programme”.
Finally, the plan notes that “hydrogen to power” has the “potential to play a key role” in the electricity system, along with other technologies that offer flexibility, such as power CCUS and energy storage.
Farming and land use
In 2023, agriculture and other land use accounted for 11% of the UK’s total greenhouse gas emissions, when international aviation and shipping is included, the CBGD plan says.
It adds that cow and sheep farming “currently make up the largest share of these emissions”.
The CBGD lists some of the government’s major policies for cutting emissions from agriculture and land use.
This includes the environment land management schemes (Elms), a post-Brexit project to pay farmers to cut CO2 emissions and protect nature on their land, first introduced by Boris Johnson’s government in 2020.
The CBGD plan says that “half of all farmed land” is now under Elms and that spending for the schemes will increase from £800m in 2023-24 to £2bn by 2028-29.
The National Farmers Union (NFU) has previously called the claim that spending had increased “misleading”, as farmers were originally promised a figure of £2.4bn a year from Elms after Brexit, the Guardian reported.
The largest of the Elms schemes is the sustainable farming initiative, the CBGD plan says.
In May, the government was forced to reverse a decision to close applications for the scheme after the NFU threatened legal action, according to Edie.
More widely, Labour’s plans to introduce an inheritance tax on farmers when businesses are worth more than £1m has caused mass protests across the country in recent months.
The CBGD plan revises down its deployment assumptions for the percentage of farmers taking up low-carbon practices, when compared to net-zero strategies from the Conservatives in 2021 and 2023.
Previous net-zero strategies set an assumption of 75% of farmers taking up low-carbon practices by 2030 and 85% by 2035. The CBGD sets assumptions of 67% by 2030 and 74% by 2035.
The Climate Change Committee has said the government must have a comprehensive plan for restoring peatlands if it is to meet the UK’s net-zero goal.
Healthy peatlands are carbon-rich habitats that support a range of species. However, some 80% of the UK’s peatlands are degraded, with the carbon they release accounting for 5% of the UK’s total greenhouse gas emissions.
The CBGD plan says that, under the Elms landscape recovery scheme, 35,000 hectares of peatlands will be restored, in addition to the 30,000 hectares targeted for restoration under a separate nature for climate peatland grant scheme.
However, the CBGD also revises down its deployment assumptions for peatland restoration, compared to previous net-zero strategies.
The 2021 net-zero strategy assumed that just over 10,000 hectares of peatlands would be restored in 2030. The CBGD plan has a lower figure of just under 8,000 hectares for the same date.
The CBGD plan also significantly revises down expectations for tree-planting, compared to previous strategies.
The 2021 net-zero strategy assumed that 40,000 hectares of new trees would be planted in 2030. The CBGD has a much lower number of 7,455 hectares for 2030.
Tom Cantillon, senior analyst at the Energy and Climate Intelligence Unit (ECIU), noted in a statement that the CBGD plan “seems to reduce ambition” on restoring peatlands and planting trees. He adds:
“With climate change worsening flooding in the UK, unless we work with nature by planting more trees and restoring habitats like peatlands to capture rainfall, people’s homes and farmers’ fields will be at ever greater risk.”
The post Q&A: The UK government’s ‘carbon budget delivery plan’ for 2035 appeared first on Carbon Brief.
Q&A: The UK government’s ‘carbon budget delivery plan’ for 2035
Greenhouse Gases
DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss?
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Secrets and layoffs
UNLAWFUL PANEL: A federal judge ruled that the US energy department “violated the law when secretary Chris Wright handpicked five researchers who rejected the scientific consensus on climate change to work in secret on a sweeping government report on global warming”, reported the New York Times. The newspaper explained that a 1972 law “does not allow agencies to recruit or rely on secret groups for the purposes of policymaking”. A Carbon Brief factcheck found more than 100 false or misleading claims in the report.
DARKNESS DESCENDS: The Washington Post reportedly sent layoff notices to “at least 14” of its climate journalists, as part of a wider move from the newspaper’s billionaire owner, Jeff Bezos, to eliminate 300 jobs at the publication, claimed Climate Colored Goggles. After the layoffs, the newspaper will have five journalists left on its award-winning climate desk, according to the substack run by a former climate reporter at the Los Angeles Times. It comes after CBS News laid off most of its climate team in October, it added.
WIND UNBLOCKED: Elsewhere, a separate federal ruling said that a wind project off the coast of New York state can continue, which now means that “all five offshore wind projects halted by the Trump administration in December can resume construction”, said Reuters. Bloomberg added that “Ørsted said it has spent $7bn on the development, which is 45% complete”.
Around the world
- CHANGING TIDES: The EU is “mulling a new strategy” in climate diplomacy after struggling to gather support for “faster, more ambitious action to cut planet-heating emissions” at last year’s UN climate summit COP30, reported Reuters.
- FINANCE ‘CUT’: The UK government is planning to cut climate finance by more than a fifth, from £11.6bn over the past five years to £9bn in the next five, according to the Guardian.
- BIG PLANS: India’s 2026 budget included a new $2.2bn funding push for carbon capture technologies, reported Carbon Brief. The budget also outlined support for renewables and the mining and processing of critical minerals.
- MOROCCO FLOODS: More than 140,000 people have been evacuated in Morocco as “heavy rainfall and water releases from overfilled dams led to flooding”, reported the Associated Press.
- CASHFLOW: “Flawed” economic models used by governments and financial bodies “ignor[e] shocks from extreme weather and climate tipping points”, posing the risk of a “global financial crash”, according to a Carbon Tracker report covered by the Guardian.
- HEATING UP: The International Olympic Committee is discussing options to hold future winter games earlier in the year “because of the effects of warmer temperatures”, said the Associated Press.
54%
The increase in new solar capacity installed in Africa over 2024-25 – the continent’s fastest growth on record, according to a Global Solar Council report covered by Bloomberg.
Latest climate research
- Arctic warming significantly postpones the retreat of the Afro-Asian summer monsoon, worsening autumn rainfall | Environmental Research Letters
- “Positive” images of heatwaves reduce the impact of messages about extreme heat, according to a survey of 4,000 US adults | Environmental Communication
- Greenland’s “peripheral” glaciers are projected to lose nearly one-fifth of their total area and almost one-third of their total volume by 2100 under a low-emissions scenario | The Cryosphere
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Solar power, electric vehicles and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment, according to new analysis for Carbon Brief (shown in blue above). Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP) – comparable to the economies of Brazil or Canada, the analysis said.
Spotlight
Can humans reverse nature decline?
This week, Carbon Brief travelled to a UN event in Manchester, UK to speak to biodiversity scientists about the chances of reversing nature loss.
Officials from more than 150 countries arrived in Manchester this week to approve a new UN report on how nature underpins economic prosperity.
The meeting comes just four years before nations are due to meet a global target to halt and reverse biodiversity loss, agreed in 2022 under the landmark “Kunming-Montreal Global Biodiversity Framework” (GBF).
At the sidelines of the meeting, Carbon Brief spoke to a range of scientists about humanity’s chances of meeting the 2030 goal. Their answers have been edited for length and clarity.
Dr David Obura, ecologist and chair of Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)
We can’t halt and reverse the decline of every ecosystem. But we can try to “bend the curve” or halt and reverse the drivers of decline. That’s the economic drivers, the indirect drivers and the values shifts we need to have. What the GBF aspires to do, in terms of halting and reversing biodiversity loss, we can put in place the enabling drivers for that by 2030, but we won’t be able to do it fast enough at this point to halt [the loss] of all ecosystems.
Dr Luthando Dziba, executive secretary of IPBES
Countries are due to report on progress by the end of February this year on their national strategies to the Convention on Biological Diversity [CBD]. Once we get that, coupled with a process that is ongoing within the CBD, which is called the global stocktake, I think that’s going to give insights on progress as to whether this is possible to achieve by 2030…Are we on the right trajectory? I think we are and hopefully we will continue to move towards the final destination of having halted biodiversity loss, but also of living in harmony with nature.
Prof Laura Pereira, scientist at the Global Change Institute at Wits University, South Africa
At the global level, I think it’s very unlikely that we’re going to achieve the overall goal of halting biodiversity loss by 2030. That being said, I think we will make substantial inroads towards achieving our longer term targets. There is a lot of hope, but we’ve also got to be very aware that we have not necessarily seen the transformative changes that are going to be needed to really reverse the impacts on biodiversity.
Dr David Cooper, chair of the UK’s Joint Nature Conservation Committee and former executive secretary of the Convention on Biological Diversity
It’s important to look at the GBF as a whole…I think it is possible to achieve those targets, or at least most of them, and to make substantial progress towards them. It is possible, still, to take action to put nature on a path to recovery. We’ll have to increasingly look at the drivers.
Prof Andrew Gonzalez, McGill University professor and co-chair of an IPBES biodiversity monitoring assessment
I think for many of the 23 targets across the GBF, it’s going to be challenging to hit those by 2030. I think we’re looking at a process that’s starting now in earnest as countries [implement steps and measure progress]…You have to align efforts for conserving nature, the economics of protecting nature [and] the social dimensions of that, and who benefits, whose rights are preserved and protected.
Neville Ash, director of the UN Environment Programme World Conservation Monitoring Centre
The ambitions in the 2030 targets are very high, so it’s going to be a stretch for many governments to make the actions necessary to achieve those targets, but even if we make all the actions in the next four years, it doesn’t mean we halt and reverse biodiversity loss by 2030. It means we put the action in place to enable that to happen in the future…The important thing at this stage is the urgent action to address the loss of biodiversity, with the result of that finding its way through by the ambition of 2050 of living in harmony with nature.
Prof Pam McElwee, Rutgers University professor and co-chair of an IPBES “nexus assessment” report
If you look at all of the available evidence, it’s pretty clear that we’re going to keep experiencing biodiversity decline. I mean, it’s fairly similar to the 1.5C climate target. We are not going to meet that either. But that doesn’t mean that you slow down the ambition…even though you recognise that we probably won’t meet that specific timebound target, that’s all the more reason to continue to do what we’re doing and, in fact, accelerate action.
Watch, read, listen
OIL IMPACTS: Gas flaring has risen in the Niger Delta since oil and gas major Shell sold its assets in the Nigerian “oil hub”, a Climate Home News investigation found.
LOW SNOW: The Washington Post explored how “climate change is making the Winter Olympics harder to host”.
CULTURE WARS: A Media Confidential podcast examined when climate coverage in the UK became “part of the culture wars”.
Coming up
- 2-8 February: 12th session of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), Manchester, UK
- 8 February: Japanese general election
- 8 February: Portugal presidential election
- 11 February: Barbados general election
- 11-12 February: UN climate chief Simon Stiell due to speak in Istanbul, Turkey
Pick of the jobs
- UK Met Office, senior climate science communicator | Salary: £43,081-£46,728. Location: Exeter, UK
- Canadian Red Cross, programme officer, Indigenous operations – disaster risk reduction and climate change adaptation | Salary: $56,520-$60,053. Location: Manitoba, Canada
- Aldersgate Group, policy officer | Salary: £33,949-£39,253. Location: London (hybrid)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
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The post DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss? appeared first on Carbon Brief.
Greenhouse Gases
China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK
Welcome to Carbon Brief’s China Briefing.
China Briefing handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.
Key developments
Solar and wind eclipsed coal
‘FIRST TIME IN HISTORY’: China’s total power capacity reached 3,890 gigawatts (GW) in 2025, according to a National Energy Administration (NEA) data release covered by industry news outlet International Energy Net. Of this, it said, solar capacity rose 35% to 1,200GW and wind capacity was up 23% to 640GW, while thermal capacity – which is mostly coal – grew 6% to just over 1,500GW. This marks the “first time in history” that wind and solar capacity has outranked coal capacity in China’s power mix, reported the state-run newspaper China Daily. China’s grid-related energy storage capacity exceeded 213GW in 2025, said state news agency Xinhua. Meanwhile, clean-energy industries “drove more than 90%” of investment growth and more than half of GDP growth last year, said the Guardian in its coverage of new analysis for Carbon Brief. (See more in the spotlight below.)
DAWN FOR SOLAR: Solar power capacity alone may outpace coal in 2026, according to projections by the China Electricity Council (CEC), reported business news outlet 21st Century Business Herald. It added that non-fossil sources could account for 63% of the power mix this year, with coal falling to 31%. Separately, the China Renewable Energy Society said that annual wind-power additions could grow by between 600-980GW over the next five years, with annual additions of 120GW expected until 2028, said industry news outlet China Energy Net. China Energy Net also published the full CEC report.
STATE MEDIA VOICE: Xinhua published several energy- and climate-related articles in a series on the 15th five-year plan. One said that becoming a low-carbon energy “powerhouse” will support decarbonisation efforts, strengthen industrial innovation and improve China’s “global competitive edge and standing”. Another stated that coal consumption is “expected” to peak around 2027, with continued “growth” in the power and chemicals sector, while oil has already peaked. A third noted that distributed energy systems better matched the “characteristics of renewable energy” than centralised ones, but warned against “blind” expansion and insufficient supporting infrastructure. Others in the series discussed biodiversity and environmental protection and recycling of clean-energy technology. Meanwhile, the communist party-affiliated People’s Daily said that oil will continue to play a “vital role” in China, even after demand peaks.
Starmer and Xi endorsed clean-energy cooperation
CLIMATE PARTNERSHIP: UK prime minister Keir Starmer and Chinese president Xi Jinping pledged in Beijing to deepen cooperation on “green energy”, reported finance news outlet Caixin. They also agreed to establish a “China-UK high-level climate and nature partnership”, said China Daily. Xi told Starmer that the two countries should “carry out joint research and industrial transformation” in new energy and low-carbon technologies, according to Xinhua. It also cited Xi as saying China “hopes” the UK will provide a “fair” business environment for Chinese companies.
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OCTOPUS OVERSEAS: During the visit, UK power-trading company Octopus Energy and Chinese energy services firm PCG Power announced they would be starting a new joint venture in China, named Bitong Energy, reported industry news outlet PV Magazine. The move “marks a notable direct entry” of a foreign company into China’s “tightly regulated electricity market”, said Caixin.
PUSH AND PULL: UK policymakers also visited Chinese clean-energy technology manufacturer Envision in Shanghai, reported finance news outlet Yicai. It quoted UK business secretary Peter Kyle emphasising that partnering with companies “like Envision” on sustainability is a “really important part of our future”, particularly in terms of job creation in the UK. Trade minister Chris Bryant told Radio Scotland Breakfast that the government will decide on Chinese wind turbine manufacturer Mingyang’s plans for a Scotland factory “soon”. Researchers at the thinktank Oxford Institute for Energy Studies wrote in a guest post for Carbon Brief that greater Chinese competition in Europe’s wind market could “help spur competition in Europe”, if localisation rules and “other guardrails” are applied.
More China news
- LIFE SUPPORT: China will update its coal capacity payment mechanism, which will raise thresholds for coal-fired power plants and expand to cover gas-fired power and pumped and new-energy storage, reported current affairs outlet China News.
- FRONTIER TECH: The world’s “largest compressed-air power storage plant” has begun operating in China, said Bloomberg.
- PARTNERSHIP A ‘MISTAKE’: The EU launched a “foreign subsidies” probe into Chinese wind turbine company Goldwind, said the Hong Kong-based South China Morning Post. EU climate chief Wopke Hoekstra said the bloc must resist China’s pull in clean technologies, according to Bloomberg.
- TRADE SPAT: The World Trade Organization “backed a complaint by China” that the US Inflation Reduction Act “discriminated against” Chinese cleantech exports, said Reuters.
- NEW RULES: China has set “new regulations” for the Waliguan Baseline Observatory, which provides “key scientific references for the United Nations Framework Convention on Climate Change”, said the People’s Daily.
Captured
New or reactivated proposals for coal-fired power plants in China totalled 161GW in 2025, according to a new report covered by Carbon Brief.
Spotlight
Clean energy drove China’s economic growth in 2025
New analysis for Carbon Brief finds that clean-energy sectors contributed the equivalent of $2.1tn to China’s economy last year, making it a key driver of growth. However, headwinds in 2026 could restrict growth going forward – especially for the solar sector.
Below is an excerpt from the article, which can be read in full on Carbon Brief’s website.
Solar power, electric vehicles (EVs) and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment.
Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP)
Analysis shows that China’s clean-energy sectors nearly doubled in real value between 2022-25 and – if they were a country – would now be the 8th-largest economy in the world.
These investments in clean-energy manufacturing represent a large bet on the energy transition in China and overseas, creating an incentive for the government and enterprises to keep the boom going.
However, there is uncertainty about what will happen this year and beyond, particularly due to a new pricing system, worsening industrial “overcapacity” and trade tensions.
Outperforming the wider economy
China’s clean-energy economy continues to grow far more quickly than the wider economy, making an outsized contribution to annual growth.
Without these sectors, China’s GDP would have expanded by 3.5% in 2025 instead of the reported 5.0%, missing the target of “around 5%” growth by a wide margin.
Clean energy made a crucial contribution during a challenging year, when promoting economic growth was the foremost aim for policymakers.
In 2024, EVs and solar had been the largest growth drivers. In 2025, it was EVs and batteries, which delivered 44% of the economic impact and more than half of the growth of the clean-energy industries.
The next largest subsector was clean-power generation, transmission and storage, which made up 40% of the contribution to GDP and 30% of the growth in 2025.
Within the electricity sector, the largest drivers were growth in investment in wind and solar power generation capacity, along with growth in power output from solar and wind, followed by the exports of solar-power equipment and materials.
But investment in solar-panel supply chains, a major growth driver in 2022-23, continued to fall for the second year, as the government made efforts to rein in overcapacity and “irrational” price competition.
Headwinds for solar
Ongoing investment of hundreds of billions of dollars represents a gigantic bet on a continuing global energy transition.
However, developments next year and beyond are unclear, particularly for solar. A new pricing system for renewable power is creating uncertainty, while central government targets have been set far below current rates of clean-electricity additions.
Investment in solar-power generation and solar manufacturing declined in the second half of the year.
The reduction in the prices of clean-energy technology has been so dramatic that when the prices for GDP statistics are updated, the sectors’ contribution to real GDP – adjusted for inflation or, in this case deflation – will be revised down.
Nevertheless, the key economic role of the industry creates a strong motivation to keep the clean-energy boom going. A slowdown in the domestic market could also undermine efforts to stem overcapacity and inflame trade tensions by increasing pressure on exports to absorb supply.
Local governments and state-owned enterprises will also influence the outlook for the sector.
Provincial governments have a lot of leeway in implementing the new electricity markets and contracting systems for renewable power generation. The new five-year plans, to be published this year, will, therefore, be of major importance.
This spotlight was written for Carbon Brief by Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA), and Belinda Schaepe, China policy analyst at CREA. CREA China analysts Qi Qin and Chengcheng Qiu contributed research.
Watch, read, listen
PROVINCE INFLUENCE: The Institute for Global Decarbonization Progress, a Beijing-based thinktank, published a report examining the climate-related statements in provincial recommendations for the 15th five-year plan.
‘PIVOT’?: The Outrage + Optimism podcast spoke with the University of Bath’s Dr Yixian Sun about whether China sees itself as a climate leader and what its role in climate negotiations could be going forward.
COOKING FOR CLEAN-TECH: Caixin covered rising demand for China’s “gutter oil” as companies “scramble” to decarbonise.
DON’T GO IT ALONE: China News broadcast the Chinese foreign ministry’s response to the withdrawal of the US from the Paris Agreement, with spokeswoman Mao Ning saying “no country can remain unaffected” by climate change.
$6.8tn
The current size of China’s green-finance economy, including loans, bonds and equity, according to Dr Ma Jun, the Institute of Finance and Sustainability’s president,in a report launch event attended by Carbon Brief. Dr Ma added that “green loans” make up 16% of all loans in China, with some areas seeing them take a 34% share.
New science
- China’s official emissions inventories have overestimated its hydrofluorocarbon emissions by an average of 117m tonnes of carbon dioxide equivalent (mtCO2e) every year since 2017 | Nature Geoscience
- “Intensified forest management efforts” in China from 2010 onwards have been linked to an acceleration in carbon absorption by plants and soils | Communications Earth and Environment
Recently published on WeChat
China Briefing is written by Anika Patel and edited by Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK appeared first on Carbon Brief.
Solar power, electric vehicles (EVs) and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment.
Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP) – comparable to the economies of Brazil or Canada.
The new analysis for Carbon Brief, based on official figures, industry data and analyst reports, shows that China’s clean-energy sectors nearly doubled in real value between 2022-25 and – if they were a country – would now be the 8th-largest economy in the world.
Other key findings from the analysis include:
- Without clean-energy sectors, China would have missed its target for GDP growth of “around 5%”, expanding by 3.5% in 2025 instead of the reported 5.0%.
- Clean-energy industries are expanding much more quickly than China’s economy overall, with their annual growth rate accelerating from 12% in 2024 to 18% in 2025.
- The “new three” of EVs, batteries and solar continue to dominate the economic contribution of clean energy in China, generating two-thirds of the value added and attracting more than half of all investment in the sectors.
- China’s investments in clean energy reached 7.2tn yuan ($1.0tn) in 2025, roughly four times the still sizable $260bn put into fossil-fuel extraction and coal power.
- Exports of clean-energy technologies grew rapidly in 2025, but China’s domestic market still far exceeds the export market in value for Chinese firms.
These investments in clean-energy manufacturing represent a large bet on the energy transition in China and overseas, creating an incentive for the government and enterprises to keep the boom going.
However, there is uncertainty about what will happen this year and beyond, particularly for solar power, where growth has slowed in response to a new pricing system and where central government targets have been set far below the recent rate of expansion.
An ongoing slowdown could turn the sectors into a drag on GDP, while worsening industrial “overcapacity” and exacerbating trade tensions.
Yet, even if central government targets in the next five-year plan are modest, those from local governments and state-owned enterprises could still drive significant growth in clean energy.
This article updates analysis previously reported for 2023 and 2024.
Clean-energy sectors outperform wider economy
China’s clean-energy economy continues to grow far more quickly than the wider economy. This means that it is making an outsize contribution to annual economic growth.
The figure below shows that clean-energy technologies drove more than a third of the growth in China’s economy overall in 2025 and more than 90% of the net rise in investment.
In 2022, China’s clean-energy economy was worth an estimated 8.4tn yuan ($1.2tn). By 2025, the sectors had nearly doubled in value to 15.4tn yuan ($2.1tn).
This is comparable to the entire output of Brazil or Canada and positions the Chinese clean-energy industry as the 8th-largest economy in the world. Its value is roughly half the size of the economy of India – the world’s fourth largest – or of the US state of California.
The outperformance of the clean-energy sectors means that they are also claiming a rising share of China’s economy overall, as shown in the figure below.
This share has risen from 7.3% of China’s GDP in 2022 to 11.4% in 2025.
Without clean-energy sectors, China’s GDP would have expanded by 3.5% in 2025 instead of the reported 5.0%, missing the target of “around 5%” growth by a wide margin.
Clean energy thus made a crucial contribution during a challenging year, when promoting economic growth was the foremost aim for policymakers.
The table below includes a detailed breakdown by sector and activity.
| Sector | Activity | Value in 2025, CNY bln | Value in 2025, USD bln | Year-on-year growth | Growth contribution | Value contribution | Value in 2025, CNY trn | Value in 2024, CNY trn | Value in 2023, CNY trn | Value in 2022, CNY trn |
|---|---|---|---|---|---|---|---|---|---|---|
| EVs | Investment: manufacturing capacity | 1,643 | 228 | 18% | 10.4% | 10.7% | 1.6 | 1.4 | 1.2 | 0.9 |
| EVs | Investment: charging infrastructure | 192 | 27 | 58% | 2.9% | 1.2% | 0.192 | 0.122 | 0.1 | 0.08 |
| EVs | Production of vehicles | 3,940 | 548 | 29% | 36.4% | 25.6% | 3.94 | 3.065 | 2.26 | 1.65 |
| Batteries | Investment: battery manufacturing | 277 | 38 | 35% | 3.0% | 1.8% | 0.277 | 0.205 | 0.32 | 0.15 |
| Batteries | Exports: batteries | 724 | 101 | 51% | 10.1% | 4.7% | 0.724 | 0.48 | 0.46 | 0.34 |
| Solar power | Investment: power generation capacity | 1,182 | 164 | 15% | 6.3% | 7.7% | 1.182 | 1.031 | 0.808 | 0.34 |
| Solar power | Investment: manufacturing capacity | 506 | 70 | -23% | -6.5% | 3.3% | 0.506 | 0.662 | 0.95 | 0.51 |
| Solar power | Electricity generation | 491 | 68 | 33% | 5.1% | 3.2% | 0.491 | 0.369 | 0.26 | 0.19 |
| Solar power | Exports of components | 681 | 95 | 21% | 4.9% | 4.4% | 0.681 | 0.562 | 0.5 | 0.35 |
| Wind power | Investment: power generation capacity, onshore | 612 | 85 | 47% | 8.1% | 4.0% | 0.612 | 0.417 | 0.397 | 0.21 |
| Wind power | Investment: power generation capacity, offshore | 96 | 13 | 98% | 2.0% | 0.6% | 0.096 | 0.048 | 0.086 | 0.06 |
| Wind power | Electricity generation | 510 | 71 | 13% | 2.4% | 3.3% | 0.51 | 0.453 | 0.4 | 0.34 |
| Nuclear power | Investment: power generation capacity | 173 | 24 | 18% | 1.1% | 1.1% | 0.17 | 0.15 | 0.09 | 0.07 |
| Nuclear power | Electricity generation | 216 | 30 | 8% | 0.7% | 1.4% | 0.216 | 0.2 | 0.19 | 0.19 |
| Hydropower | Investment: power generation capacity | 54 | 7 | -7% | -0.2% | 0.3% | 0.05 | 0.06 | 0.06 | 0.06 |
| Hydropower | Electricity generation | 582 | 81 | 3% | 0.6% | 3.8% | 0.582 | 0.567 | 0.51 | 0.51 |
| Rail transportation | Investment | 902 | 125 | 6% | 2.1% | 5.8% | 0.902 | 0.851 | 0.764 | 0.714 |
| Rail transportation | Transport of passengers and goods | 1,020 | 142 | 3% | 1.3% | 6.6% | 1.02 | 0.99 | 0.964 | 0.694 |
| Electricity transmission | Investment: transmission capacity | 644 | 90 | 6% | 1.5% | 4.2% | 0.64 | 0.61 | 0.53 | 0.5 |
| Electricity transmission | Transmission of clean power | 52 | 7 | 14% | 0.3% | 0.3% | 0.052 | 0.046 | 0.04 | 0.04 |
| Energy storage | Investment: Pumped hydro | 53 | 7 | 5% | 0.1% | 0.3% | 0.05 | 0.05 | 0.04 | 0.03 |
| Energy storage | Investment: Grid-connected batteries | 232 | 32 | 52% | 3.3% | 1.5% | 0.232 | 0.152 | 0.08 | 0.02 |
| Energy storage | Investment: Electrolysers | 11 | 2 | 29% | 0.1% | 0.1% | 0.011 | 0.009 | 0 | 0 |
| Energy efficiency | Revenue: Energy service companies | 620 | 86 | 17% | 3.8% | 4.0% | 0.62 | 0.528003 | 0.52 | 0.45 |
| Total | Investments | 7,198 | 1001 | 15% | 38.2% | 46.7% | 7.20 | 6.28 | 6.00 | 4.11 |
| Total | Production of goods and services | 8,216 | 1,143 | 22% | 61.8% | 53.3% | 8.22 | 6.73 | 5.58 | 4.32 |
| Total | Total GDP contribution | 15,414 | 2144 | 18% | 100.0% | 100.0% | 15.41 | 13.01 | 11.58 | 8.42 |
EVs and batteries were the largest drivers of GDP growth
In 2024, EVs and solar had been the largest growth drivers. In 2025, it was EVs and batteries, which delivered 44% of the economic impact and more than half of the growth of the clean-energy industries. This was due to strong growth in both output and investment.
The contribution to nominal GDP growth – unadjusted for inflation – was even larger, as EV prices held up year-on-year while the economy as a whole suffered from deflation. Investment in battery manufacturing rebounded after a fall in 2024.
The major contribution of EVs and batteries is illustrated in the figure below, which shows both the overall size of the clean-energy economy and the sectors that added the most to the rise from year to year.
The next largest subsector was clean-power generation, transmission and storage, which made up 40% of the contribution to GDP and 30% of the growth in 2025.
Within the electricity sector, the largest drivers were growth in investment in wind and solar power generation capacity, along with growth in power output from solar and wind, followed by the exports of solar-power equipment and materials.
Investment in solar-panel supply chains, a major growth driver in 2022-23, continued to fall for the second year. This was in line with the government’s efforts to rein in overcapacity and “irrational” price competition in the sector.
Finally, rail transportation was responsible for 12% of the total economic output of the clean-energy sectors, but saw relatively muted growth year-on-year, with revenue up 3% and investment by 6%.
Note that the International Energy Agency (IEA) world energy investment report projected that China invested $627bn in clean energy in 2025, against $257bn in fossil fuels.
For the same sectors as the IEA report, this analysis puts the value of clean-energy investment in 2025 at a significantly more conservative $430bn. The higher figures in this analysis overall are therefore the result of wider sectoral coverage.
Electric vehicles and batteries
EVs and vehicle batteries were again the largest contributors to China’s clean-energy economy in 2025, making up an estimated 44% of value overall.
Of this total, the largest share of both total value and growth came from the production of battery EVs and plug-in hybrids, which expanded 29% year-on-year. This was followed by investment into EV manufacturing, which grew 18%, after slower growth rates in 2024.
Investment in battery manufacturing also rebounded after a drop in 2024, driven by new battery technology and strong demand from both domestic and international markets. Battery manufacturing investment grew by 35% year-on-year to 277bn yuan.
The share of electric vehicles (EVs) will have reached 12% of all vehicles on the road by the end of 2025, up from 9% a year earlier and less than 2% just five years ago.
The share of EVs in the sales of all new vehicles increased to 48%, from 41% in 2024, with passenger cars crossing the 50% threshold. In November, EV sales crossed the 60% mark in total sales and they continue to drive overall automotive sales growth, as shown below.
Electric trucks experienced a breakthrough as their market share rose from 8% in the first nine months of 2024 to 23% in the same period in 2025.
Policy support for EVs continues, for example, with a new policy aiming to nearly double charging infrastructure in the next three years.
Exports grew even faster than the domestic market, but the vast majority of EVs continue to be sold domestically. In 2025, China produced 16.6m EVs, rising 29% year-on-year. While exports accounted for only 21% or 3.4m EVs, they grew by 86% year-on-year. Top export destinations for Chinese EVs were western Europe, the Middle East and Latin America.
The value of batteries exported also grew rapidly by 41% year-on-year, becoming the third largest growth driver of the GDP. Battery exports largely went to western Europe, north America and south-east Asia.
In contrast with deflationary trends in the price of many clean-energy technologies, average EV prices have held up in 2025, with a slight increase in average price of new models, after discounts. This also means that the contribution of the EV industry to nominal GDP growth was even more significant, given that overall producer prices across the economy fell by 2.6%. Battery prices continued to drop.
Clean-power generation
The solar power sector generated 19% of the total value of the clean-energy industries in 2025, adding 2.9tn yuan ($41bn) to the national economy.
Within this, investment in new solar power plants, at 1.2tn yuan ($160bn), was the largest driver, followed by the value of solar technology exports and by the value of the power generated from solar. Investment in manufacturing continued to fall after the wave of capacity additions in 2023, reaching 0.5tn yuan ($72bn), down 23% year-on-year.
In 2025, China achieved another new record of wind and solar capacity additions. The country installed a total of 315GW solar and 119GW wind capacity, adding more solar and two times as much wind as the rest of the world combined.
Clean energy accounted for 90% of investment in power generation, with solar alone covering 50% of that. As a result, non-fossil power made up 42% of total power generation, up from 39% in 2024.
However, a new pricing policy for new solar and wind projects and modest targets for capacity growth have created uncertainty about whether the boom will continue.
Under the new policy, new clean-power generation has to compete on price against existing coal power in markets that place it at a disadvantage in some key ways.
At the same time, the electricity markets themselves are still being introduced and developed, creating investment uncertainty.
Investment in solar power generation increased year-on-year by 15%, but experienced a strong stop-and-go cycle. Developers rushed to finish projects ahead of the new pricing policy coming into force in June and then again towards the end of the year to finalise projects ahead of the end of the current 14th five-year plan.
Investment in the solar sector as a whole was stable year-on-year, with the decline in manufacturing capacity investment balanced by continued growth in power generation capacity additions. This helped shore up the utilisation of manufacturing plants, in line with the government’s aim to reduce “disorderly” price competition.
By late 2025, China’s solar manufacturing capacity reached an estimated 1,200GW per year, well ahead of the global capacity additions of around 650GW in 2025. Manufacturers can now produce far more solar panels than the global market can absorb, with fierce competition leading to historically low profitability.
China’s policymakers have sought to address the issue since mid-2024, warning against “involution”, passing regulations and convening a sector-wide meeting to put pressure on the industry. This is starting to yield results, with losses narrowing in the third quarter of 2025.
The volume of exports of solar panels and components reached a record high in 2025, growing 19% year-on-year. In particular, exports of cells and wafers increased rapidly by 94% and 52%, while panel exports grew only by 4%.
This reflects the growing diversification of solar-supply chains in the face of tariffs and with more countries around the world building out solar panel manufacturing capacity. The nominal value of exports fell 8%, however, due to a fall in average prices and a shift to exporting upstream intermediate products instead of finished panels.
Hydropower, wind and nuclear were responsible for 15% of the total value of the clean-energy sectors in 2025, adding some 2.2tn yuan ($310bn) to China’s GDP in 2025.
Nearly two-thirds of this (1.3tn yuan, $180bn) came from the value of power generation from hydropower, wind and nuclear, with investment in new power generation projects contributing the rest.
Power generation grew 33% from solar, 13% from wind, 3% from hydropower and 8% from nuclear.
Within power generation investment, solar remained the largest segment by value – as shown in the figure below – but wind-power generation projects were the largest contributor to growth, overtaking solar for the first time since 2020.
In particular, offshore wind power capacity investment rebounded as expected, doubling in 2025 after a sharp drop in 2024.
Investment in nuclear projects continued to grow but remains smaller in total terms, at 17bn yuan. Investment in conventional hydropower continued to decline by 7%.
Electricity storage and grids
Electricity transmission and storage were responsible for 6% of the total value of the clean-energy sectors in 2025, accounting for 1.0 tn yuan ($140bn).
The most valuable sub-segment was investment in power grids, growing 6% in 2025 and reaching $90bn. This was followed by investment in energy storage, including pumped hydropower, grid-connected battery storage and hydrogen production.
Investment in grid-connected batteries saw the largest year-on-year growth, increasing by 50%, while investments in electrolysers also grew by 30%. The transmission of clean power increased an estimated 13%, due to rapid growth in clean-power generation.
China’s total electricity storage capacity reached more than 213GW, with battery storage capacity crossing 145GW and pumped hydro storage at 69GW. Some 66GW of battery storage capacity was added in 2025, up 52% year-on-year and accounting for more than 40% of global capacity additions.
Notably, capacity additions accelerated in the second half of the year, with 43GW added, compared with the first half, which saw 23GW of new capacity.
The battery storage market initially slowed after the renewable power pricing policy, which banned storage mandates after May, but this was quickly replaced by a “market-driven boom”. Provincial electricity spot markets, time-of-day tariffs and increasing curtailment of solar power all improved the economics of adding storage.
By the end of 2025, China’s top five solar manufacturers had all entered the battery storage market, making a shift in industry strategy.
Investment in pumped hydropower continued to increase, with 15GW of new capacity permitted in the first half of 2025 alone and 3GW entering operation.
Railways
Rail transportation made up 12% of the GDP contribution of the clean-energy sectors, with revenue from passenger and goods rail transportation the largest source of value. Most growth came from investment in rail infrastructure, which increased 6% year-on-year
The electrification of transport is not limited to EVs, as rail passenger, freight and investment volumes saw continued growth. The total length of China’s high-speed railway network reached 50,000km in 2025, making up more than 70% of the global high-speed total.
Energy efficiency
Investment in energy efficiency rebounded strongly in 2025. Measured by the aggregate turnover of large energy service companies (ESCOs), the market expanded by 17% year-on-year, returning to growth rates last seen during 2016-2020.
Total industry turnover has also recovered to its previous peak in 2021, signalling a clear turnaround after three years of weakness.
Industry projections now anticipate annual turnover reaching 1tn yuan in annual turnover by 2030, a target that had previously been expected to be met by 2025.
China’s ESCO market has evolved into the world’s largest. Investment within China’s ESCO market remains heavily concentrated in the buildings sector, which accounts for around 50% of total activity. Industrial applications make up a further 21%, while energy supply, demand-side flexibility and energy storage together account for approximately 16%.
Implications of China’s clean-energy bet
Ongoing investment of hundreds of billions of dollars into clean-energy manufacturing represents a gigantic economic and financial bet on a continuing global energy transition.
In addition to the domestic investment covered in this article, Chinese firms are making major investments in overseas manufacturing.
The clean-energy industries have played a crucial role in meeting China’s economic targets during the five-year period ending this year, delivering an estimated 40%, 25% and 37% of all GDP growth in 2023, 2024 and 2025, respectively.
However, the developments next year and beyond are unclear, particularly for solar power generation, with the new pricing system for renewable power generation leading to a short-term slowdown and creating major uncertainty, while central government targets have been set far below current rates of clean-electricity additions.
Investment in solar-power generation and solar manufacturing declined in the second half of the year, while investment in generation clocked growth for the full year, showing the risk to the industries under the current power market set-ups that favour coal-fired power.
The reduction in the prices of clean-energy technology has been so dramatic that when the prices for GDP statistics are updated, the sectors’ contribution to real GDP – adjusted for inflation or, in this case deflation – will be revised down.
Nevertheless, the key economic role of the industry creates a strong motivation to keep the clean-energy boom going. A slowdown in the domestic market could also undermine efforts to stem overcapacity and inflame trade tensions by increasing pressure on exports to absorb supply.
A recent CREA survey of experts working on climate and energy issues in China found that the majority believe that economic and geopolitical challenges will make the “dual carbon” goals – and with that, clean-energy industries – only more important.
Local governments and state-owned enterprises will also influence the outlook for the sector. Their previous five-year plans played a key role in creating the gigantic wind and solar power “bases” that substantially exceeded the central government’s level of ambition.
Provincial governments also have a lot of leeway in implementing the new electricity markets and contracting systems for renewable power generation. The new five-year plans, to be published this year, will therefore be of major importance.
About the data
Reported investment expenditure and sales revenue has been used where available. When this is not available, estimates are based on physical volumes – gigawatts of capacity installed, number of vehicles sold – and unit costs or prices.
The contribution to real growth is tracked by adjusting for inflation using 2022-2023 prices.
All calculations and data sources are given in a worksheet.
Estimates include the contribution of clean-energy technologies to the demand for upstream inputs such as metals and chemicals.
This approach shows the contribution of the clean-energy sectors to driving economic activity, also outside the sectors themselves, and is appropriate for estimating how much lower economic growth would have been without growth in these sectors.
Double counting is avoided by only including non-overlapping points in value chains. For example, the value of EV production and investment in battery storage of electricity is included, but not the value of battery production for the domestic market, which is predominantly an input to these activities.
Similarly, the value of solar panels produced for the domestic market is not included, as it makes up a part of the value of solar power generating capacity installed in China. However, the value of solar panel and battery exports is included.
In 2025, there was a major divergence between two different measures of investment. The first, fixed asset investment, reportedly fell by 3.8%, the first drop in 35 years. In contrast, gross capital formation saw the slowest growth in that period but still inched up by 2%.
This analysis uses gross capital formation as the measure of investment, as it is the data point used for GDP accounting. However, the analysis is unable to account for changes in inventories, so the estimate of clean-energy investment is for fixed asset investment in the sectors.
The analysis does not explicitly account for the small and declining role of imports in producing clean-energy goods and services. This means that the results slightly overstate the contribution to GDP but understate the contribution to growth.
For example, one of the most important import dependencies that China has is for advanced computing chips for EVs. The value of the chips in a typical EV is $1,000 and China’s import dependency for these chips is 90%, which suggests that imported chips represent less than 3% of the value of EV production.
The estimates are likely to be conservative in some key respects. For example, Bloomberg New Energy Finance estimates “investment in the energy transition” in China in 2024 at $800bn. This estimate covers a nearly identical list of sectors to ours, but excludes manufacturing – the comparable number from our data is $600bn.
China’s National Bureau of Statistics says that the total value generated by automobile production and sales in 2023 was 11tn yuan. The estimate in this analysis for the value of EV sales in 2023 is 2.3tn yuan, or 20% of the total value of the industry, when EVs already made up 31% of vehicle production and the average selling prices for EVs was slightly higher than for internal combustion engine vehicles.
The post Analysis: Clean energy drove more than a third of China’s GDP growth in 2025 appeared first on Carbon Brief.
Analysis: Clean energy drove more than a third of China’s GDP growth in 2025
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