China’s Third Plenum, an important five-yearly meeting traditionally associated with major economic reforms, concluded on 18 July in Beijing.
Observers have been eagerlyanticipating signals from the meeting about the leadership’s plans for economic growth and wider development, including on climate action.
The official readout from the meeting of the Central Committee of the Chinese Communist Party calls on policymakers to pursue a range of relevant reforms.
These include a focus on “high-quality economic development” (高质量发展), as well as “supporting all-around innovation” (支持全面创新) and “deepening reform in ecological conservation systems” (深化生态文明体制改革), among other areas.
It also urges officials to “make concerted efforts to cut carbon emissions” and “actively respond to climate change”. This is the first time carbon emissions have been mentioned in a plenum document.
A key step to achieve this, it adds, is through “improving institutional mechanisms for developing new quality productive forces” (NQPF, 新质生产力).
Since its first appearance in official rhetoric in September last year, this term has featured in Chinese state media in numerous high-level policy documents and commentaries about industrial development and low-carbon growth.
According to Chinese president Xi Jinping, one important element of NQPF is “green development”, which he has described as the “base colour of high-quality development”. In comments made in January 2024, he added that “new quality productivity itself is green productivity” (新质生产力本身就是绿色生产力).
This encapsulates both the development of low-carbon technologies, such as electric vehicles (EVs), and the “green transformation” of the economy.
However, there is significant debate as to whether the concept, which can also be translated as “new productive forces” or “new quality productivity”, will result in concrete policy outcomes and support further development of industries critical to China’s energy transition.
In this article, Carbon Brief unpacks the concepts underpinning new quality productive forces, and what it means for China’s climate, energy and industrial policy.
The phrase was first mentioned by Xi during a visit to Heilongjiang province, located in the “rust belt” of northeast China, in 2023.
In January 2024, he further defined it as innovation-led development that creates “a break with traditional economic growth models and development pathways”, resulting in a “high level of technology, efficiency and quality” (高科技、高效能、高质量) as well as an “in-depth transformation and upgrading of industry” (产业深度转型升级).
This has led to a “ubiquitous” focus on innovation across official discussions about NQPF, according to the University of Cambridge-affiliated thinktank Cambridge Industrial Innovation Policy.
Unleashing this innovation, according to official interpretations, will lead to a cascade of changes across China’s industrial system – “both technological and institutional” – that will improve China’s advanced manufacturing capabilities.
Nevertheless, innovation and advanced technology are not the only focus. Analysis by the Council on Geostrategy says the framing of NQPF “suggests that, while scientific and technological innovation is essential, [China recognises there] needs also to be deeper reforms of the…economic model”.
Chinese president Xi Jinping inspects a forest farm in Mohe in the Dahinggan Mountains, northeast China’s Heilongjiang Province on 6 September 2023. Credit: Yin Bogu / Alamy Stock Photo
Priority areas for reform include the market-based economy; state owned enterprises (SOE); and China’s fiscal, household registration and healthcare systems.
These economic reforms, driven both by “the government’s ‘visible hand’ and the market’s ‘invisible hand’”, are necessary for China’s continuous prosperity, according to the Xinhua Institute, a thinktank affiliated with state news agency Xinhua.
The institute links NQPF with Marxism, arguing this is in line with improving “means of production” – an important force in Marxist theory for production, reform and human development.
Most official explanations of the concept are relatively broad and unspecific. However, low-carbon development is one of the few named priorities.
How significant is this for low-carbon development?
NQPF will provide an “important support for green development”, according to a commentary in the Communist party-affiliated People’s Daily, which was reposted on the website of China’s National Energy Administration.
“Protecting the ecological environment is to protect productivity and improving the ecological environment is to develop productivity,” it adds.
Some analysis takes this further. Prof Zhang Yunfei, from the Marxism studies department at Renmin University in Beijing and researcher at its National Institute of Development and Strategy, tells the government-affiliated newspaper China Environment News that NQPF represents a development model specific to China.
This contrasts with “traditional productive forces in Western societies”, or “black productivity” (黑色生产力), which saw “high consumption of resources and energy, and high pollution of the ecological environment”, he says.
Instead, NQPF signifies “green productivity”, which will help China “shift from conforming to leading globalisation, and promote the country’s healthy and green development”.
“Green productivity”, Zhang adds, is sustainable productivity that focuses both on increasingly productive “ecologicalisation” (生态化) and increasingly ecological productive forces driving wider development.
These forces are fundamentally provided by and rooted in nature, he explains. Driving forces include “sustainable resources such as information”, a “new generation of workers” that understand the concept of ecological civilisation and an enhanced “level of sustainable development” based on “green science and technology”.
This concept of NQPF is a holistic approach “designed to address complex, interrelated challenges faced by China and to create a more resilient and dynamic economy that will bring long-term prosperity”, Dr Muyi Yang, senior electricity policy analyst for China from the thinktank Ember, tells Carbon Brief.
Arthur Kroeber, founding partner and head of research at research firm Gavekal Dragonomics, tells Carbon Brief that NQPF is “the latest iteration of a long-running trend towards industrial policy, technology and intensive growth”.
This is “essentially a new bottle for old wine”, Kroeber adds. “I think what it does do is emphasise the point that there is a national mission” to build China into a technological superpower.
“It is a big deal”, Bill Bishop, author of the Sinocism newsletter, told Bloomberg, as Xi “putting a stamp” on the idea will “send a powerful signal” to stakeholders across the system.
The idea addresses specific anxieties facing China’s leadership. As well as supporting economic growth, some argue that strengthening the country’s ability to innovate provides China with a greater sense of security.
Workers inspect battery products at a lithium battery factory in Tangshan, China. Credit: Yang Shiyao / Alamy Stock Photo
According to the Chinese Communist party’s leading theoretical journal Qiushi, for example, Xi believes that China is “still reliant on others for some core technologies…our industry is still not strong enough in spite of its size and falls short of excellence…and we face significant pressure in making the transition to green and low-carbon production modes”.
Prof Yao Yang, liberal arts chair professor at the China Center for Economic Research and the National School of Development at Peking University in Beijing, echoes this, writing in a comment for China Daily that the “significance” of the concept is the overarching aim of “laying a solid foundation for the future of the Chinese economy”.
Kroeber tells Carbon Brief that this is also driven, in part, by historical parallels between China’s fear of being cut off from US technological advancements and the rupture with the Soviet Union in the Mao era. He says:
“After the Sino-Soviet split, Soviet advisors who went [to China] to help build steel plants and develop the petrochemical industry, for example, all left. China was left [to develop its economy] on its own…Xi Jinping has drawn a specific connection [to that].”
What does this mean for China’s low-carbon technology industries?
A primary aim of NQPF is to expand “strategic emerging industries” and “nurture future industries”, Deng Zhou, associate research fellow at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, writes in the state-run newspaper China Daily.
“Strategic industries” include “new energy”, “new energy vehicles” and “energy conservation and environmental protection”. Recent analysis for Carbon Brief found that “clean energy” sectors contributed 11.4tn yuan ($1.6tn) to China’s economy in 2023.
“Future industries”, according to a policy document issued in January, include nuclear energy, nuclear fusion, hydrogen, biomass, crystalline silicon solar cells, thin-film solar cells and new energy storage such as batteries, among other areas.
These are “implied to be the major sectoral targets” for the NQPF, according to Kroeber.
In his January speech, Xi said that successful deployment of NQPF requires “accelerating green science and technology innovation…promoting application of advanced green technology…strengthening the green manufacturing industry…growing the green energy industry…[and] developing green and low-carbon industrial and supply chains”.
Much of this will be driven by state-coordinated efforts. China Daily says that efforts to cultivate NQPF “will encourage its centrally administered state-owned enterprises [SOEs] to deploy more resources toward developing strategic emerging industries”.
Kroeber believes that this will lead to “national resources [being] mobilised through a ‘new national system’ (新型举国体制)”.
He tells Carbon Brief that the system is an attempt to “create better coordination mechanisms” between the central and local governments in order to better achieve policy goals, such as through research consortiums focused on technological innovations.
This is inspired by the success of China’s electric vehicle (EV) industry, which benefited both from significant state support and from the emergence of innovative and intensely competitive businesses.
Using innovation to foster leading expertise across different industries, China hopes, will allow the country to replicate its achievements in the EV sector in other industries.
For example, a blog post on Yuyuan Tantian, a WeChat account affiliated with state broadcaster CCTV, draws a link between China’s experience in manufacturing LCD televisions and its later success in developing solar technologies, which require similar manufacturing technologies and processes.
“New quality productive forces are not simply a process of transformation from old productivity to new productivity…It is a qualitative leap in productivity based on the achievements of the new round of scientific and technological revolution and industrial transformation, which is characterised by green, intelligent and ubiquitous (绿色、智能、泛在) trends.”
China’s use of state resources to support strategically important industries, such as EVs, has recently fuelled anxieties about “overcapacity” in some countries.
Both the US and the EU have imposed tariffs on China-made EV imports. The EU’s tariff rate for individual automakers is based on the amount of state subsidies, including R&D grants, that the bloc determined those companies to have received.
There are also concerns around overcapacity domestically. A March Reuters article quoted an anonymous Chinese policy adviser saying: “The direction of promoting tech innovation is right, but my worry is how to achieve it – what path and what institutional mechanisms should we rely on?”
To a point, these concerns are also shared by the leadership. In an article translated by the Pekingology newsletter, Han Wenxiu, a top economic policy planner, cautioned against “campaign-style” implementation of NQPF policies that lead to “neglecting or abandoning traditional industries”, as well as “blind conformity and bubbles”.
Some analysts have linked NQPF to a broader push for faster economic growth and challenges tackling “deep-seated difficulties” in economic reform, which has led to a “lack of more radical action on consumption”.
Michael Pettis, senior fellow at the Carnegie Endowment, is quoted by the Financial Times saying that “the exit strategy has to be, at the end of the day, consumption – there’s no point producing all this stuff if no one’s going to buy it”.
But given current tensions with the US, Kroeber tells Carbon Brief, China “can’t rely on imports of technology in the same way…It must have an all-of-nation effort to develop its own alternatives for the technologies it used to import.”
France’s President Emmanuel Macron, Chinese President Xi Jinping and European Commission President Ursula von der Leyen at the Elysee Palace in Paris, on 6 May 2024. Credit: Eliot Blondet / Alamy Stock Photo
In his view, efforts to foster NQPF “could” lead to the creation of more capacity – although he finds concerns around overcapacity to be overly “politicised”.
He says that any spikes in capacity may be “unintentional” as “the Europeans and Chinese are actually starting discussions on [resolving concerns around] EVs”.
Yangtells Carbon Brief that “innovative technologies are often not commercially viable and struggle to compete with mature technologies in the market”, highlighting the need for government support to make the EV industry viable. He adds:
“The world needs to achieve rapid and deep decarbonisation within a very short timeframe. The market often drives incremental change. But what is required now is more radical, fundamental change.”
At a press conference on 24 June, the Ministry of Ecology and Environment (MEE) announced that it will release a ‘1+N’ policy on NQPF, which will “promote the accelerated development of NQPF” and “thicken” the “green-ness” of high-quality development (厚植高质量发展的绿色底色).
This followed an article in Qiushi by MEE minister Huang Runqiu and party secretary Sun Jinlong, who wrote that “ecology is itself the economy – if you protect ecology, ecology will give you returns”.
The ‘1+N’ framework is well-established in Chinese environmental policymaking, forming the basis for China’s climate policy.
It refers to “1” policy setting overarching objectives, which guides numerous (“N”) action plans and policy measures that include more concrete targets.
The MEE said that NQPF “can help promote the significant decline of pollutants and carbon emissions, and radically improve the quality of the ecological environment”.
An article on ‘green productive forces’ by MEE minister Huang Runqiu and party secretary Sun Jinlong. Source: Qiushi
On 11 July, it released one of the first “N” policies in the system – regulations to update “management of ecological environment zoning control”.
Analysis by consulting firm Trivium China questions whether this “will directly contribute” to development of NQPF, but adds that it could signal the MEE “leveraging” the concept to “push through reforms that might otherwise be stymied” by other stakeholders.
Meanwhile, the Ministry of Science and Technology (MOST) announced on 17 July that it will establish a centre for promoting NQPF. This may improve MOST’s “autonomy” in policy planning for science and technology innovation, an analyst told finance newspaper 21st Century Business Herald.
Kroeber says that “every document the government comes out with now has to have some reference to NQPF. It’s just a way for bureaucrats to say ‘we have heard the signal [from Beijing] and we are pursuing [those goals]’”.
He adds that one area in which China may issue more concrete policies is power market reform.
China has been trying to “introduce more competition” into its power market to address a range of challenges inherent to the old grid system, including increasing the share of renewable power in overall power generation.
It is “an area where this idea of coordination and the state playing a more leading role in getting everyone to move together” is crucial, Kroeber says, given the importance of access to abundant, low-cost electricity to power development of more technology.
Seeing further progress “would be the litmus test of whether the government is pursuing its aims [around NQPF] in an effective way”, he adds.
However, Yang tells Carbon Brief that while NQPF “has theoretical underpinnings, it is far from being purely conceptual”.
He says: “I believe more actions in various sectors will come soon to translate it into concrete initiatives and programs.”
Coal power generation fell in both China and India in 2025, the first simultaneous drop in half a century, after each nation added record amounts of clean energy.
The new analysis for Carbon Brief shows that electricity generation from coal in India fell by 3.0% year-on-year (57 terawatt hours, TWh) and in China by 1.6% (58TWh).
The last time both countries registered a drop in coal power output was in 1973.
The fall in 2025 is a sign of things to come, as both countries added a record amount of new clean-power generation last year, which was more than sufficient to meet rising demand.
Both countries now have the preconditions in place for peaking coal-fired power, if China is able to sustain clean-energy growth and India meets its renewable energy targets.
These shifts have international implications, as the power sectors of these two countries drove 93% of the rise in global carbon dioxide (CO2) emissions from 2015-2024.
While many challenges remain, the decline in their coal-power output marks a historic moment, which could help lead to a peak in global emissions.
Double drop
The new analysis shows that power generation from coal fell by 1.6% in China and by 3.0% in India in 2025, as non-fossil energy sources grew quickly enough in both countries to cover electricity consumption growth. This is illustrated in the figure below.
Growth in coal-fired power generation in China and India by year, %, 1972-2025. Source: Analysis by Lauri Myllyvirta for Carbon Brief. Further details below.
China achieved this feat even as electricity demand growth remained rapid at 5% year-on-year. In India, the drop in coal was due to record clean-energy growth combined with slower demand growth, resulting from mild weather and a longer-term slowdown.
The simultaneous drop for coal power in both countries in 2025 is the first since 1973, when much of the world was rocked by the oil crisis. Both China and India saw weak power demand growth that year, combined with increases in power generation from other sources – hydro and nuclear in the case of India and oil in the case of China.
China’s recent clean-energy generation growth, if sustained, is already sufficient to secure a peak in coal power. Similarly, India’s clean-energy targets, if they are met, will enable a peak in coal before 2030, even if electricity demand growth accelerates again.
In 2025, China will likely have added more than 300 gigawatts (GW) of solar and 100GW of wind power, both clear new records for China and, therefore, for any country ever.
Power generation from solar and wind increased by 450TWh in the first 11 months of the year and nuclear power delivering another 35TWh. This put the growth of non-fossil power generation, excluding hydropower, squarely above the 460TWh increase in demand.
Growth in clean-power generation has kept ahead of demand growth and, as a result, power-sector coal use and CO2 emissions have been falling since early 2024.
Coal use outside the power sector is falling, too, mostly driven by falling output of steel, cement and other construction materials, the largest coal-consuming sectors after power.
In India’s case, the fall in coal-fired power in 2025 was a result of accelerated clean-energy growth, a longer-term slowdown in power demand growth and milder weather, which resulted in a reduction in power demand for air conditioning.
Faster clean-energy growth contributed 44% of the reduction in coal and gas, compared to the trend in 2019-24, while 36% was contributed by milder weather and 20% by slower underlying demand growth. This is the first time that clean-energy growth has played a significant role in driving down India’s coal-fired power generation, as shown below.
Change in power generation in China and India by source and year, terawatt hours 2000-2025. Source: Analysis by Lauri Myllyvirta for Carbon Brief. Further details below.
India added 35GW of solar, 6GW wind and 3.5GW hydropower in the first 11 months of 2025, with renewable energy capacity additions picking up 44% year-on-year.
Power generation from non-fossil sources grew 71TWh, led by solar at 33TWh, while total generation increased 21TWh, similarly pushing down power generation from coal and gas.
The increase in clean power is, however, below the average demand growth recorded from 2019 to 2024, at 85TWh per year, as well as below the projection for 2026-30.
This means that clean-energy growth would need to accelerate in order for coal power to see a structural peak and decline in output, rather than a short-term blip.
Meeting the government’s target for 500GW of non-fossil power capacity by 2030, set by India’s prime minister Narendra Modi in 2021, requires just such an acceleration.
Historic moment
While the accelerated clean-energy growth in China and India has upended the outlook for their coal use, locking in declines would depend on meeting a series of challenges.
First, the power grids would need to be operated much more flexibly to accommodate increasing renewable shares. This would mean updating old power market structures – built to serve coal-fired power plants – both in China and India.
Second, both countries have continued to add new coal-fired power capacity. In the short term, this is leading to a fall in capacity utilisation – the number of hours each coal unit is able to operate – as power generation from coal falls.
(Both China and India have been adding new coal-power capacity in response to increases in peak electricity demand. This includes rising demand for air conditioning, in part resulting from extreme heat driven by the historical emissions that have caused climate change.)
If under-construction and permitted coal-power projects are completed, they would increase coal-power capacity by 28% in China and 23% in India. Without marked growth in power generation from coal, the utilisation of this capacity would fall significantly, causing financial distress for generators and adding costs for power users.
In the longer term, new coal-power capacity additions would have to be slowed down substantially and retirements accelerated, to make space for further expansion of clean energy in the power system.
Despite these challenges ahead, the drop in coal power and record increase in clean energy in China and India marks a historic moment.
Power generation in these two countries drove more than 90% of the increase in global CO2 emissions from all sources between 2015-2024 – with 78% from China and 16% from India – making their power sectors the key to peaking global emissions.
About the data
China’s coal-fired power generation until November 2025 is calculated from monthly data on the capacity and utilisation of coal-fired power plants from China Electricity Council (CEC), accessed through Wind Financial Terminal.
For December, year-on-year growth is based on a weekly survey of power generation at China’s coal plants by CEC, with data up to 25 December. This data closely predicts CEC numbers for the full month.
Other power generation and capacity data is derived from CEC and National Bureau of Statistics data, following the methodology of CREA’s monthly snapshot of energy and emissions trends in China.
For India, the analysis uses daily power generation data and monthly capacity data from the Central Electricity Authority, accessed through a dashboard published by government thinktank Niti Aayog.
The role of coal-fired power in China and India in driving global CO2 emissions is calculated from the International Energy Agency (IEA) World Energy Balances until 2023, applying default CO2 emission factors from the Intergovernmental Panel on Climate Change.
To extend the calculation to 2024, the year-on-year growth of coal-fired power generation in China and India is taken from the sources above, and the growth of global fossil-fuel CO2 emissions was taken from the Energy Institute’s Statistical Review of World Energy.
The time series of coal-fired power generation since 1971, used to establish the fact that the previous time there was a drop in both countries was 1973, was taken from the IEA World Energy Balances. This dataset uses fiscal years ending in March for India. Calendar-year data was available starting from 2000 from Ember’s yearly electricity data.
After the United States announced last week it would withdraw from the International Renewable Energy Agency (IRENA), effectively slashing more than a fifth of its core budget, the organisation’s head said it could “manage” the US exit, as top officials argued the energy transition is “unstoppable”.
Speaking to reporters at IRENA’s 16th Assembly in Abu Dhabi, Director-General Francesco La Camera said the US had yet to formally notify the agency it would be leaving. IRENA’s statute says withdrawal of a member country takes effect at the end of the year in which it is notified.
Until that point, they remain a member with all its rights, including the right to vote, but also “the duty to pay”, La Camera added.
The decision will make the US the only country to leave the UNFCCC, with the UN climate chief calling it a “colossal own goal” that will harm the US economy
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On Sunday, IRENA’s member countries – around 170 in total – adopted a budget for the coming two years, which shows the US is expected to contribute 22% of IRENA’s core funding, with its share amounting to nearly $5.7 million for 2026.
La Camera said IRENA is already talking to governments and the private sector to fill the potential financial hole if the US does not deliver on its financial obligations, as has been the case in previous years with the UN climate secretariat and the Green Climate Fund.
“We know that some of these usual donors are considering to put something in our budget – we are also trying to get some money from the companies that are part of our initiatives… and we will see other ways that we can pursue,” he added. “I know that we can manage one way or another.”
During country statements made on Sunday afternoon, which were closed to the media, there had been expectations that China might step up to close the gap, but that did not happen.
The United Arab Emirates, Germany and other European nations are substantial government donors to IRENA, although the agency’s core budget has barely risen since 2018, documents show. That has limited its ability to expand its activities even as demand rises across developing countries and small island states for greater technical and policy support to boost renewables.
La Camera noted that, following the US decision to pull out under Donald Trump, IRENA’s council may need to propose amendments to its approved budget for 2026-2027 ahead of its next meeting in May.
Melford Nicholas, minister of information technologies, utilities and energy for Antigua and Barbuda, who is also a newly elected vice president of IRENA, told Climate Home News the US move would “not be an insignificant development” but Europeans had indicated they could help make up the shortfall.
Clean energy for “opportunity and necessity”
At the opening session of the two-day assembly, La Camera and other top officials affirmed the importance of renewable energy as the best choice for energy and economic security at a time of rising geopolitical tensions driven by fossil fuel interests.
Selwin Hart,special adviser to the UN Secretary-General on Climate Action and Just Transition, said the world is clearly changing its energy system to clean sources “not out of idealism, but out of opportunity and necessity”.
He noted that three out of four people live in countries that are net importers of fossil fuels, exposing them to geopolitical shocks, volatile prices and balance of payment pressures.
Examples of this include the rise in gas prices in Europe after Russia’s invasion of Ukraine in 2024 led to sanctions.
“The energy transition is taking place… not only based on climate considerations, but based on costs, based on competitiveness and energy security and energy independence,” Hart added. “These are the driving forces now – hardcore economic, hardcore national security [and] strategic reasons.”
In a video message, Annalena Baerbock, president of the UN General Assembly and former foreign minister of Germany, said “we are living in heavy, challenging times” – but despite setbacks and political headwinds, “the march to a renewable energy future has proven unstoppable”.
She added that global renewable capacity has now reached more than 4,400 gigawatts, almost 30 times that of 2015 when the Paris climate agreement was adopted, while a record $2.4 trillion was invested in the energy transition in 2024. “There is no way back,” she added.
However, she and Hart both noted that more needs to be done to support African countries to unlock finance for clean energy, as it lags far behind other regions and receives only around 2% of investment in the sector.
Challenges for small island states
The substantial needs of small island developing states (SIDS) are also front and centre at the IRENA Assembly, where ministers have discussed the challenges of shifting away from costly diesel and other polluting fuels while being exposed to rising climate shocks such as destructive cyclones.
Antigua and Barbuda’s minister Nicholas pointed to the difficulty of gaining insurance for renewable energy facilities as a key barrier in an era when storms can cause huge damage.
This happened in Barbuda in 2017 when Hurricane Irma wiped out a solar plant that was not insured. Governments including the United Arab Emirates and New Zealand helped to rebuild it.
Antigua and Barbuda’s Minister Melford Nicholas speaks at the IRENA 16th Assembly in Abu Dhabi, UAE, on January 11, 2026 (Photo: IRENA)
Antigua and Barbuda’s Minister Melford Nicholas speaks at the IRENA 16th Assembly in Abu Dhabi, UAE, on January 11, 2026 (Photo: IRENA)
Nicholas said SIDS are still in need of concessional finance, which could “become increasingly challenging for us” in the current international environment.
“It’s an issue, because that retards the speed at which we’re able to get to renewable energy transition,” he added, noting his country is likely to reach an energy mix of around 60% renewables by 2030 rather than the 100% it had aimed for.
Despite the obstacles, ministers from Caribbean countries like St Kitts and Nevis and Dominica showcased examples of planned geothermal plants that will enable them to phase down fossil fuels dramatically.
IRENA’s La Camera said he was optimistic the world would get very close to realising a global goal of tripling renewable energy capacity by the end of this decade, but was still lagging behind on a twin target of doubling energy efficiency by 2030.
To help catalyse a global transition away from fossil fuels, he added that IRENA would work with COP host nations on a roadmap to that end, which they are due to present at the COP31 UN climate summit in Turkey in November, as well as a potential target for electrification consistent with that plan.
Jobs in renewable energy expanded only slightly in 2024 to reach 16.6 million worldwide, new figures show, suggesting that the industry’s ability to create employment is slowing as it matures.
According to an annual report from the International Renewable Energy Agency (IRENA) and the International Labour Organization (ILO), the number of renewables jobs rose by just 2.3% between 2023 and 2024. This was partly due to Chinese solar manufacturers already producing more components than they could sell, and laying off workers to cut costs.
Other factors included a shift from rooftop solar installations to utility-scale systems in major markets like India and Germany, as well as increasing automation in the sector – a trend that is expected to accelerate with the use of robots, drones and artificial intelligence.
Employment in the sector has risen steadily from 7.3 million in 2012, when the data series began, along with the increase in solar, wind and geothermal energy, hydropower and biofuels around the world. But far fewer new jobs were created in 2024 – 400,000 – compared with 2023, which saw a jump of 2.5 million.
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In a foreword to the report released on Sunday, IRENA Director-General Francesco La Camera and ILO Director-General Gilbert F. Houngbo wrote that the slowdown in the rate of job creation points to “the emergence of a new phase in the energy transition”.
“Growing automation and economies of scale mean that comparatively less human labour is required for each new unit of capacity – although impacts vary across countries, technologies and segments of the renewable energy value chain,” they said.
IRENA currently projects that, with the right policies in place, the renewable energy workforce could expand to 30 million jobs by 2030. But the latest figures – which do not reflect the impact of Donald Trump’s squashing of US renewables incentives in 2025 – indicate reaching that level could be a stretch.
Michael Renner, IRENA’s head of socioeconomics and policy, told Climate Home News on the sidelines of the agency’s assembly in Abu Dhabi that, in the past 10-20 years, the renewable energy sector has been far more labour-intensive than the fossil fuel industry – which has largely been automated – but the difference is starting to narrow.
“I think renewables are still looking favourable [for job creation], and I don’t think that advantage will be lost – but I think it will be less massive, less dramatic,” he added.
Notes:
a) Includes liquid biofuels, solid biomass and biogas.
b) Direct jobs only.
c) “Others” includes geothermal energy, concentrated solar power, heat pumps (ground based), municipal and industrial waste,
and ocean energy.
Source: IRENA / Renewable Energy and Jobs
Annual Review 2025
Notes:
a) Includes liquid biofuels, solid biomass and biogas.
b) Direct jobs only.
c) “Others” includes geothermal energy, concentrated solar power, heat pumps (ground based), municipal and industrial waste,
and ocean energy.
Source: IRENA / Renewable Energy and Jobs
Annual Review 2025
Geographical imbalances
The world needs to add a huge amount of solar, wind, hydro and geothermalcapacity to meet a global goal of tripling renewable power capacity to reach 11.2 terawatts (TW) by the end of the decade. That will require installing an average of about 1.1 TW each year from 2025 to 2030, which is about double the power added in 2024, IRENA says.
In a statement on the jobs report, La Camera noted that renewable energy deployment is “booming, but the human side of the story is as important as the technological side”.
He pointed to geographical imbalances in the deployment of clean energy and related job creation. Africa has particularly struggled to attract foreign investment in building out renewables, with much of the growth currently concentrated in Asia.
“Countries that are lagging behind in the energy transition must be supported by the international community,” La Camera said. “This is essential not only to meet the goal of tripling renewable power capacity by 2030, but also to ensure that socioeconomic benefits become lived realities for all, helping to shore up popular support for the transition.”
Some countries like Nigeria are trying to boost their solar equipment manufacturing supply chains, with the government saying it plans to ban solar panel imports, and two large assembly plants announced to support public electrification programmes.
China leads on jobs but solar stumbles
In 2024, China was home to nearly half – 44% – of the world’s renewable energy jobs with an estimated 7.3 million. But in that year, employment in its solar photovoltaics (PV) sector actually contracted slightly, as five leading manufacturers cut their workforce.
This was in response to efforts by the Chinese government to curb what it has dubbed “disorderly” competition by reducing excess capacity across the solar PV supply chain, in a bid to boost prices and product quality.
Renewables jobs stayed flat in the European Union in 2024, meanwhile, at 1.8 million jobs, and India and the US saw small rises, accounting for 1.3 million and 1.1 million respectively. Brazil was also a big employer, with 1.4 million jobs, partly thanks to its biofuels industry based on soy and sugarcane.
On the impact of Trump’s efforts to roll back incentives and subsidies for green energy in the US, Renner said it will likely mean fewer new renewable power installations, with the report documenting examples of solar and wind projects that were cancelled or halted in 2025.
He also noted the dampening effects of US tariff hikes on the production of solar panels in Southeast Asia, which has led to job losses in some countries including Thailand, while others such as India have been able to increase their exports to the US thanks to relatively lower taxes on their exports.
Limited opportunities for women and people with disabilities
The report also highlights a lack of progress on increasing women workers in the renewables industry. While higher than in fossil fuels, it has plateaued at about one job in three.
Those jobs are concentrated in administrative roles, which account for 45% of female employment in renewable energy, as well as in technical positions unrelated to science, technology or engineering, such as legal work.
The report calls for greater efforts by companies, education and skills training bodies to open up more opportunities for women in clean energy, as well as for people with disabilities who face high barriers to participating in labour markets across the board, with only three in 10 being employed worldwide.
There are some positive cases where proactive policies have made a difference, such as in India’s electric vehicle industry, which has a relatively high level of women at the management level.
In Brazil, meanwhile, national legislation requires companies with more than 100 employees to reserve 2-5% of jobs for people with disabilities, including those in renewable energy.
And in Spain, energy utility Endesa and municipalities trained over 300 people with intellectual and psycho-social disabilities in tasks like vegetation management and composting at solar energy sites, with nearly 40% securing jobs after six months.
ILO’s Houngbo called for greater efforts on disability inclusion in the clean energy transition, not just as a matter of justice but also to advance resilient labour markets and sustainable development.
“This requires accessible training systems, inclusive hiring practices, and workplaces that accommodate, welcome and respond to diverse needs and respect every worker’s rights,” he added.
Climate Home News received support from IRENA to travel to Abu Dhabi to covers its 16th Assembly.
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