The Trump administration in the US has announced its intention to withdraw from the UN’s landmark climate treaty, alongside 65 other international bodies that “no longer serve American interests”.
Every nation in the world has committed to tackling “dangerous anthropogenic interference with the climate system” under the 1992 UN Framework Convention on Climate Change (UNFCCC).
During Donald Trump’s second presidency, the US has already failed to meet a number of its UN climate treaty obligations, including reporting its emissions and funding the UNFCCC – and it has not attended recent climate summits.
However, pulling out of the UNFCCC would be an unprecedented step and would mark the latest move by the US to disavow global cooperation and climate action.
Among the other organisations the US plans to leave is the Intergovernmental Panel on Climate Change (IPCC), the UN body seen as the global authority on climate science.
In this article, Carbon Brief considers the implications of the US leaving these bodies, as well as the potential for it rejoining the UNFCCC in the future.
Carbon Brief has also spoken to experts about the contested legality of leaving the UNFCCC and what practical changes – if any – will result from the US departure.
- What is the process for pulling out of the UNFCCC?
- Is it legal for Trump to take the US out of the UNFCCC unilaterally?
- How could the US rejoin the UNFCCC and Paris Agreement?
- What changes when the US withdraws from the UNFCCC?
- What about the US withdrawal from the IPCC?
- What other organisations are affected?
What is the process for pulling out of the UNFCCC?
The Trump administration set out its intention to withdraw from the UNFCCC and the IPCC in a White House presidential memorandum issued on 7 January 2026.
It claims authority “vested in me as president by the constitution and laws of the US” to withdraw the country from the treaty, along with 65 other international and UN bodies.
However, the memo includes a caveat around its instructions, stating:
“For UN entities, withdrawal means ceasing participation in or funding to those entities to the extent permitted by law.”
(In an 8 January interview with the New York Times, Trump said he did not “need international law” and that his powers were constrained only by his “own morality”.)
The US is the first and only country in the world to announce it wants to withdraw from the UNFCCC.
The convention was adopted at the UN headquarters in New York in May 1992 and opened for signatures at the Rio Earth summit the following month. The US became the first industrialised nation to ratify the treaty that same year.
It was ultimately signed by every nation on Earth – making it one of the most ratified global treaties in history.
Article 25 of the treaty states that any party may withdraw by giving written notification to the “depositary”, which is elsewhere defined as being the UN secretary general – currently, António Guterres.
The article, shown below, adds that the withdrawal will come into force a year after a written notification is supplied.
The treaty adds that any party that withdraws from the convention shall be considered as also having left any related protocol.
The UNFCCC has two main protocols: the Kyoto Protocol of 1997 and the Paris Agreement of 2015.
Although former US president Bill Clinton signed the Kyoto Protocol in 1998, its formal ratification faced opposition from the Senate and the treaty was ultimately rejected by his successor, president George W Bush, in 2001.
Domestic opposition to the protocol centred around the exclusion of major developing countries, such as China and India, from emissions reduction measures.
The US did ratify the Paris Agreement, but Trump signed an executive order to take the nation out of the pact for a second time on his first resumed day in office in January 2025.
Is it legal for Trump to take the US out of the UNFCCC unilaterally?
Whether Trump can legally pull the US out of the UNFCCC without the consent of the Senate remains unclear.
The US previously left the Paris Agreement during Trump’s first term.
Both the UNFCCC and the Paris Agreement allow any party to withdraw with a year’s written notice. However, both treaties state that parties cannot withdraw within the first three years of ratification.
As such, the first Trump administration filed notice to exit the Paris Agreement in November 2019 and became the first nation in the world to formally leave a year later – the day after Democrat Joe Biden won the 2020 presidential election.
On his first day in office in 2021, Biden rejoined the Paris Agreement. This took 30 days from notifying the UNFCCC to come into force.
The legalities of leaving the UNFCCC are murkier, due to how it was adopted.
As Michael B Gerrard, director of the Sabin Center for Climate Change Law at Columbia Law School, explains to Carbon Brief, the Paris Agreement was ratified without Senate approval.
Article 2 of the US Constitution says presidents have the power to make or join treaties subject to the “advice and consent” of the Senate – including a two-thirds majority vote (see below).
However, Barack Obama took the position that, as the Paris Agreement “did not impose binding legal obligations on the US, it was not a treaty that required Senate ratification”, Gerrard tells Carbon Brief.
As noted in a post by Jake Schmidt, a senior strategic director at the environmental NGO Natural Resources Defense Council (NRDC), the US has other mechanisms for entering international agreements. It says the US has joined more than 90% of the international agreements it is party to through different mechanisms.
In contrast, George H Bush did submit the UNFCCC to the Senate in 1992, where it was unanimously ratified by a 92-0 vote, ahead of his signing it into law.
Reversing this is uncertain legal territory. Gerrard tells Carbon Brief:
“There is an open legal question whether a president can unilaterally withdraw the US from a Senate-ratified treaty. A case raising that question reached the US Supreme Court in 1979 (Goldwater vs Carter), but the Supreme Court ruled this was a political question not suitable for the courts.”
Unlike ratifying a treaty, the US Constitution does not explicitly specify whether the consent of the Senate is required to leave one.
This has created legal uncertainty around the process.
Given the lack of clarity on the legal precedent, some have suggested that, in practice, Trump can pull the US out of treaties unilaterally.
Sue Biniaz, former US principal deputy special envoy for climate and a key legal architect of the Paris Agreement, tells Carbon Brief:
“In terms of domestic law, while the Supreme Court has not spoken to this issue (it treated the issue as non-justifiable in the Goldwater v Carter case), it has been US practice, and the mainstream legal view, that the president may constitutionally withdraw unilaterally from a treaty, ie without going back to the Senate.”
Additionally, the potential for Congress to block the withdrawal from the UNFCCC and other treaties is unclear. When asked by Carbon Brief if it could play a role, Biniaz says:
“Theoretically, but politically unlikely, Congress could pass a law prohibiting the president from unilaterally withdrawing from the UNFCCC. (The 2024 NDAA contains such a provision with respect to NATO.) In such case, its constitutionality would likely be the subject of debate.”
How could the US rejoin the UNFCCC and Paris Agreement?
The US would be able to rejoin the UNFCCC in future, but experts disagree on how straightforward the process would be and whether it would require a political vote.
In addition to it being unclear whether a two-thirds “supermajority” vote in the Senate is required to leave a treaty, it is unclear whether rejoining would require a similar vote again – or if the original 1992 Senate consent would still hold.
Citing arguments set out by Prof Jean Galbraith of the University of Pennsylvania law school, Schmidt’s NRDC post says that a future president could rejoin the convention within 90 days of a formal decision, under the merit of the previous Senate approval.
Biniaz tells Carbon Brief that there are “multiple future pathways to rejoining”, adding:
“For example, Prof Jean Galbraith has persuasively laid out the view that the original Senate resolution of advice and consent with respect to the UNFCCC continues in effect and provides the legal authority for a future president to rejoin. Of course, the Senate could also give its advice and consent again. In any case, per Article 23 of the UNFCCC, it would enter into force for the US 90 days after the deposit of its instrument.”
Prof Oona Hathaway, an international law professor at Yale Law School, believes there is a “very strong case that a future president could rejoin the treaty without another Senate vote”.
She tells Carbon Brief that there is precedent for this based on US leaders quitting and rejoining global organisations in the past, explaining:
“The US joined the International Labour Organization in 1934. In 1975, the Ford administration unilaterally withdrew, and in 1980, the Carter administration rejoined without seeking congressional approval.
“Similarly, the US became a member of the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1946. In the 1980s, the Reagan administration unilaterally withdrew the US. The Bush administration rejoined UNESCO in 2002, but in 2019 the Trump administration once again withdrew. The Biden administration rejoined in 2023, and the Trump Administration announced its withdrawal again in 2025.”
But this “legal theory” of a future US president specifically re-entering the UNFCCC “based on the prior Senate ratification” has “never been tested in court”, Prof Gerrard from Columbia Law School tells Carbon Brief.
Dr Joanna Depledge, an expert on global climate negotiations and research fellow at the University of Cambridge, tells Carbon Brief:
“Due to the need for Senate ratification of the UNFCCC (in my interpretation), there is no way back now for the US into the climate treaties. But there is nothing to stop a future US president applying [the treaty] rules or – what is more important – adopting aggressive climate policy independently of them.”
If it were required, achieving Senate approval to rejoin the UNFCCC would take a “significant shift in US domestic politics”, public policy professor Thomas Hale from the University of Oxford notes on Bluesky.
Rejoining the Paris Agreement, on the other hand, is a simpler process that the US has already undertaken in recent years. (See: Is it legal for Trump to take the US out of the UNFCCC unilaterally?) Biniaz explains:
“In terms of the Paris Agreement, a party to that agreement must also be a party to the UNFCCC (Article 20). Assuming the US had rejoined the UNFCCC, it could rejoin the Paris Agreement as an executive agreement (as it did in early 2021). The agreement would enter into force for the US 30 days after the deposit of its instrument (Article 21).”
The Center for Climate and Energy Solutions, an environmental non-profit, explains that Senate approval was not required for Paris “because it elaborates an existing treaty” – the UNFCCC.
What changes when the US withdraws from the UNFCCC?
US withdrawal from the UNFCCC has been described in media coverage as a “massive hit” to global climate efforts that will “significantly limit” the treaty’s influence.
However, experts tell Carbon Brief that, as the Trump administration has already effectively withdrawn from most international climate activities, this latest move will make little difference.
Moreover, Depledge tells Carbon Brief that the international climate regime “will not collapse” as a result of US withdrawal. She says:
“International climate cooperation will not collapse because the UNFCCC has 195 members rather than 196. In a way, the climate treaties have already done their job. The world is already well advanced on the path to a lower-carbon future. Had the US left 10 years ago, it would have been a serious threat, but not today. China and other renewable energy giants will assert even more dominance.”
Depledge adds that while the “path to net-zero will be longer because of the drastic rollback of domestic climate policy in the US”, it “won’t be reversed”.
Technically, US departure from the UNFCCC would formally release it from certain obligations, including the need to report national emissions.
As the world’s second-largest annual emitter, this is potentially significant.
“The US withdrawal from the UNFCCC undoubtedly impacts on efforts to monitor and report global greenhouse gas emissions,” Dr William Lamb, a senior researcher at the Potsdam Institute for Climate Impact Research (PIK), tells Carbon Brief.
Lamb notes that while scientific bodies, such as the IPCC, often use third-party data, national inventories are still important. The US already failed to report its emissions data last year, in breach of its UNFCCC treaty obligations.
Robbie Andrew, senior researcher at Norwegian climate institute CICERO, says that it will currently be possible for third-party groups to “get pretty close” to the carbon dioxide (CO2) emissions estimates previously published by the US administration. However, he adds:
“The further question, though, is whether the EIA [US Energy Information Administration] will continue reporting all of the energy data they currently do. Will the White House decide that reporting flaring is woke? That even reporting coal consumption is an unnecessary burden on business? I suspect the energy sector would be extremely unhappy with changes to the EIA’s reporting, but there’s nothing at the moment that could guarantee anything at all in that regard.”
Andrew says that estimating CO2 emissions from energy is “relatively straightforward when you have detailed energy data”. In contrast, estimating CO2 emissions from agriculture, land use, land-use change and forestry, as well as other greenhouse gas emissions, is “far more difficult”.
The US Treasury has also announced that the US will withdraw from the UN’s Green Climate Fund (GCF) and give up its seat on the board, “in alignment” with its departure from the UNFCCC. The Trump administration had already cancelled $4bn of pledged funds for the GCF.
Another specific impact of US departure would be on the UNFCCC secretariat budget, which already faces a significant funding gap. US annual contributions typically make up around 22% of the body’s core budget, which comes from member states.
However, as with emissions data and GCF withdrawal, the Trump administration had previously indicated that the US would stop funding the UNFCCC.
In fact, billionaire and UN special climate envoy Michael Bloomberg has already committed, alongside other philanthropists, to making up the US shortfall.
Veteran French climate negotiator Paul Watkinson tells Carbon Brief:
“In some ways the US has already suspended its participation. It has already stopped paying its budget contributions, it sent no delegation to meetings in 2025. It is not going to do any reporting any longer – although most of that is now under the Paris Agreement. So whether it formally leaves the UNFCCC or not does not change what it is likely to do.”
Dr Joanna Depledge tells Carbon Brief that she agrees:
“This is symbolically and politically huge, but in practice it makes little difference, given that Trump had already announced total disengagement last year.”
The US has a history of either leaving or not joining major environmental treaties and organisations, such as the Paris Agreement and the Kyoto Protocol. (See: What is the process for pulling out of the UNFCCC?)
Dr Jennifer Allan, a global environmental politics researcher at Cardiff University, tells Carbon Brief:
“The US has always been an unreliable partner…Historically speaking, this is kind of more of the same.”
The NRDC’s Jake Schmidt tells Carbon Brief that he doubts US absence will lead to less progress at UN climate negotiations. He adds:
“[The] Trump team would have only messed things up, so not having them participate will probably actually lead to better outcomes.”
However, he acknowledges that “US non-participation over the long-term could be used by climate slow-walking countries as an excuse for inaction”.
Biniaz tells Carbon Brief that the absence of the US is unlikely to unlock reform of the UN climate process – and that it might make negotiations more difficult. She says:
“I don’t see the absence of the US as promoting reform of the COP process. While the US may have had strong views on certain topics, many other parties did as well, and there is unlikely to be agreement among them to move away from the consensus (or near consensus) decision-making process that currently prevails. In fact, the US has historically played quite a significant ‘broker’ role in the negotiations, which might actually make it more difficult for the remaining parties to reach agreement.”
After leaving the UNFCCC, the US would still be able to participate in UN climate talks as an observer, albeit with diminished influence. (It is worth noting that the US did not send a delegation to COP30 last year.)
There is still scope for the US to use its global power and influence to disrupt international climate processes from the outside.
For example, last year, the Trump administration threatened nations and negotiators with tariffs and withdrawn visa rights if they backed an International Maritime Organization (IMO) effort to cut shipping emissions. Ultimately, the measures were delayed due to a lack of consensus.
(Notably, the IMO is among the international bodies that the US has not pledged to leave.)
What about the US withdrawal from the IPCC?
As a scientific body, rather than a treaty, there is no formal mechanism for “withdrawing” from the IPCC. In its own words, the IPCC is an “organisation of governments that are members of the UN or World Meteorological Organization” (WMO).
Therefore, just being part of the UN or WMO means a country is eligible to participate in the IPCC. If a country no longer wishes to play a role in the IPCC, it can simply disengage from its activities – for example, by not attending plenary meetings, nominating authors or providing financial support.
This is exactly what the US government has been doing since last year.
Shortly before the IPCC’s plenary meeting for member governments – known as a “session” – in Hangzhou, China, in March 2025, reports emerged that US officials had been denied permission to attend.
In addition, the contract for the technical support unit for Working Group III (WG3) was terminated by its provider, NASA, which also eliminated the role of chief scientist – the position held by WG3 co-chair Dr Kate Cavlin.
(Each of the IPCC’s three “working groups” has a technical support unit, or TSU, which provides scientific and operational support. These are typically “co-located” between the home countries of a working group’s two co-chairs.)
The Hangzhou session was the first time that the US had missed a plenary since the IPCC was founded in 1988. It then missed another in Lima, Peru, in October 2025.
Although the US government did not nominate any authors for the IPCC’s seventh assessment cycle (AR7), US scientists were still put forward through other channels. Analysis by Carbon Brief shows that, across the three AR7 working group reports, 55 authors are affiliated with US institutions.
However, while IPCC authors are supported by their institutions – they are volunteers and so are not paid by the IPCC – their travel costs for meetings are typically covered by their country’s government. (For scientists from developing countries, there is financial support centrally from the IPCC.)
Prof Chris Field, co-chair of Working Group II during the IPCC’s fifth assessment (AR5), tells Carbon Brief that a “number of philanthropies have stepped up to facilitate participation by US authors not supported by the US government”.
The US Academic Alliance for the IPCC – a collaboration of US universities and research institutions formed last year to fill the gap left by the government – has been raising funds to support travel.
In a statement reacting to the US withdrawal, IPCC chair Prof Sir Jim Skea said that the panel’s focus remains on preparing the reports for AR7:
“The panel continues to make decisions by consensus among its member governments at its regular plenary sessions. Our attention remains firmly on the delivery of these reports.”
The various reports will be finalised, reviewed and approved in the coming years – a process that can continue without the US. As it stands, the US government will not have a say on the content and wording of these reports.
Field describes the US withdrawal as a “self-inflicted wound to US prestige and leadership” on climate change. He adds:
“I don’t have a crystal ball, but I hope that the US administration’s animosity toward climate change science will lead other countries to support the IPCC even more strongly. The IPCC is a global treasure.”
The University of Edinburgh’s Prof Gabi Hegerl, who has been involved in multiple IPCC reports, tells Carbon Brief:
“The contribution and influence of US scientists is presently reduced, but there are still a lot of enthusiastic scientists out there that contribute in any way they can even against difficult obstacles.”
On Twitter, Prof Jean-Pascal van Ypersele – IPCC vice-chair during AR5 – wrote that the US withdrawal was “deeply regrettable” and that to claim the IPCC’s work is contrary to US interests is “simply nonsensical”. He continued:
“Let us remember that the creation of the IPCC was facilitated in 1988 by an agreement between Ronald Reagan and Margaret Thatcher, who can hardly be described as ‘woke’. Climate and the environment are not a matter of ideology or political affiliation: they concern everyone.”
Van Ypersele added that while the IPCC will “continue its work in the service of all”, other countries “will have to compensate for the budgetary losses”.
The IPCC’s most recent budget figures show that the US did not make a contribution in 2025.
Carbon Brief analysis shows that the US has provided around 30% of all voluntary contributions in the IPCC’s history. Totalling approximately $67m (£50m), this is more than four times that of the next-largest direct contributor, the EU.
However, this is not the first time that the US has withdrawn funding from the IPCC. During Trump’s first term of office, his administration cut its contributions in 2017, with other countries stepping up their funding in response. The US subsequently resumed its contributions.
At its most recent meeting in Lima, Peru, in October 2025, the IPCC warned of an “accelerating decline” in the level of annual voluntary contributions from countries and other organisations, reported the Earth Negotiations Bulletin. As a result, the IPCC invited member countries to increase their donations “if possible”.
What other organisations are affected?
In addition to announcing his plan to withdraw the US from the UNFCCC and the IPCC, Trump also called for the nation’s departure from 16 other organisations related to climate change, biodiversity and clean energy.
These include:
- The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) – the biodiversity equivalent of the IPCC.
- Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development – a voluntary group of more than 80 countries aiming to make the mining sector more sustainable.
- UN Energy – the principal UN organisation for international collaboration on energy.
- UN Oceans – a UN mechanism responsible for overseeing the International Seabed Authority (ISA) and other UN agencies related to ocean and coastal issues.
- UN Water – the UN agency responsible for water and sanitation.
- UN Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (UN-REDD) – a UN collaborative initiative for creating financial incentives for protecting forests.
- International Renewable Energy Agency – an intergovernmental organisation supporting countries in their transition to renewable energy.
- 24/7 Carbon-Free Energy Compact – a UN initiative launched in 2021 pushing governments, companies and organisations to achieve 100% low-carbon electricity generation.
- Commission for Environmental Cooperation – an organisation aimed at conserving North America’s natural environment.
- Inter-American Institute for Global Change Research – an intergovernmental organisation supported by 19 countries in North and South America for the support of planetary change research.
- International Energy Forum – an intergovernmental platform for dialogue among countries, industry and experts.
- International Solar Alliance – an organisation supporting the development of solar power and the phaseout of fossil fuels.
- International Tropical Timber Organization – an organisation aimed at protecting tropical forest resources.
- International Union for Conservation of Nature – an international nature conservation organisation and authority on the state of biodiversity loss.
- Renewable Energy Policy Network for the 21st Century – a global policy forum for renewable energy leadership.
- Secretariat of the Pacific Regional Environment Programme – a regional organisation aimed at protecting the Pacific’s environment.
As well as participating in the work of these organisations, the US is also a key source of funding for many of them – leaving their futures uncertain.
In a letter to members seen by Carbon Brief, IPBES chair and Kenyan ecologist, Dr David Obura, described Trump’s move as “deeply disappointing”.
He said that IPBES “has not yet received any formal notification” from the US, but “anticipates that the intention expressed to withdraw will mean that the US will soon cease to be a member of IPBES”, adding:
“The US is a founding member of IPBES and scientists, policymakers and stakeholders – including Indigenous peoples and local communities – from the US have been among the most engaged contributors to the work of IPBES since its establishment in 2012, making valuable contributions to objective science-based assessments of the state of the planet, for people and nature.
“The contribution of US experts ranges from leading landmark assessment reports, to presiding over negotiations, serving as authors and reviewers, as well as helping to steer the organisation both scientifically and administratively.”
Despite being a party to IPBES until now, the US has never been a signatory to the UN Convention on Biological Diversity (CBD), the nature equivalent of the UNFCCC.
It is one of only two nations not to sign the convention, with the other being the Holy See, representing the Vatican City.
The lack of US representation at the CBD has not prevented countries from reaching agreements. In 2022, countries gathered under the CBD adopted the Kunming-Montreal Global Biodiversity Framework, often described as the “Paris Agreement for nature”.
However, some observers have pointed to the lack of US involvement as one of the reasons why biodiversity loss has received less international attention than climate change.
The post Q&A: What Trump’s US exit from UNFCCC and IPCC could mean for climate action appeared first on Carbon Brief.
Q&A: What Trump’s US exit from UNFCCC and IPCC could mean for climate action
Climate Change
‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance
The US is urging countries to form a critical mineral trading bloc to shore up access to resources that are pivotal to manufacturing energy, digital and advanced technologies and technologies, and to reduce the world’s dependence on China for mineral supplies.
Washington says this mineral club would provide countries with a tariff-free trade zone to buy and sell critical minerals with guaranteed minimum prices, helping them compete with Chinese producers and create more resilient supply chains.
China dominates global mineral refining capacity for 19 of 20 key minerals needed to manufacture clean energy technologies and advanced digital infrastructure.
“The Trump administration is proposing a concrete mechanism to return the global critical minerals market to a healthier, more competitive state,” US Vice President JD Vance told government representatives from 54 countries and the European Union attending the first US-hosted critical minerals ministerial meeting on Wednesday.
Large economies like India, Japan, France, Germany and the UK as well as resource-rich emerging and developing economies such as Argentina, the Democratic Republic of the Congo and Zambia were represented at the event in Washington DC.
“We want to eliminate th[e] problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers,” Vance said, without naming China.
“We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might, while also expanding production across the entire zone. The benefits will be immediate and durable,” he added.
“In the end, it’s all in the US interest of course,” Bryan Bille, a principal at Benchmark Mineral Intelligence, told Climate Home News. “At the same time, the Trump Administration realises that international cooperation is needed to address these challenges.”
“America needs you”
“It feels like ‘thank you for coming, America needs your help’,” Patrick Schröder, a senior research fellow at Chatham House, said of the meeting.
“The US now have realised they cannot solve their critical minerals problem just on their own. To really reduce dependence on China, they need this bigger group of countries,” he said.
There is potential for a mineral trading club to become useful to diversify supply chains and support mineral production in developing countries “but it can’t be all about supplying the US with minerals,” Schröder told Climate Home News.
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On Wednesday, the US signed 11 bilateral critical minerals agreements with Argentina, the Cook Islands, Ecuador, Guinea, Morocco, Paraguay, Peru, the Philippines, the UAE and Uzbekistan. This comes on top of 10 other deals signed in the past five months, including with Australia, Japan, South Korea, Saudi Arabia and Thailand. The EU and the US have committed to conclude a deal within the next 30 days. The US government says the deals will form the basis for global collaboration.
Secretary of the Interior Doug Burgum told a conference on Tuesday that “there is strong interest from another 20 countries” to sign similar deals.
The US also announced the creation of the Forum on Resource Geostrategic Engagement (FORGE), which will succeed the Minerals Security Partnership and enable member countries to collaborate on mineral policy and projects. It will be chaired by South Korea until June.
Prioritising cleantech
US officials emphasised the growing need for minerals to power artificial intelligence, data centres and the digital economy but made no reference to the booming demand from cleantech industries manufacturing batteries, heat pumps, solar panels and wind turbines.
For Schröder, Europe could play a role in shaping the initiative by prioritising cleantech industries.
Any price-floor mechanism “should also be linked to ensuring that mining and processing is done to the highest possible environmental standards” and support efforts to improve supply chain traceability, he said.
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The Trump administration argues that setting a minimum price for minerals will help create a stable environment to attract long-term capital into new mining projects.
But how this will work in practice remains unclear and complex. Prices vary for each mineral, each stage of the value chain and across different countries. “All of that needs to be discussed and agreed,” said Schröder, warning that a trading club could easily become “a cartel” and risk breaching World Trade Organisation rules.
Chinese dependence
The US’s attempt to broker new alliances to secure mineral supplies comes as Washington is seeking to fast-track mining permits at home and announced plans to stockpile minerals to help shield domestic manufacturers from cheaper Chinese competition.
This is particularly acute when it comes to rare earths with China accounting for around 60% of mining output and more than 90% of global rare earths refining capacity.
The Trump administration has doubled down on efforts to diversify its mineral supplies, especially for rare earths, after American manufacturers faced supply shortages last year when China expanded export restrictions amid trade tensions with Washington.
Rare earths are pivotal to producing magnets that are used in wind turbines, electric vehicle motors as well as many other advanced technologies. Both countries reached a deal to lift the restrictions on supplies but some limits are still in place despite the truce.
“We just can’t be in a position where our entire economy… is in a position to be held hostage by someone that could change the world economy through a form of export controls,” US Secretary of the Interior Burgum said on Tuesday.
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Yet, for many resource-rich countries, the US’s national security strategy poses the biggest risk to global supply chain stability, said Cory Combs, head of critical mineral research at advisory firm Trivium China.
Ultimately, global efforts to diversify mineral value chain mean China will lose market share. “But it’s not going to lose its advantages,” he told Climate Home News.
“Industry will still buy every Chinese material they can possibly get their hands on, because it’s cheaper, it’s better, it’s faster and more reliable when you don’t have the export controls,” he said.
Project Vault
To help shore up mineral reserves in the short-term, President Donald Trump announced the establishment of a US critical mineral reserve earlier this week.
Project Vault will “ensure that American businesses and workers are never harmed by any shortage – we never want to go through what we went through a year ago,” he said.
The US Export-Import Bank is providing up to $10 billion in loans – the largest deal in the bank’s history – to procure and store minerals in warehouses across the US for manufacturers to use in case of a supply shock.
Dozens of companies have committed an additional $1.67bn in private capital to build up the reserve. EV battery manufacturer Clarios, GE Vernova, which produces wind turbines and grid electrification technologies, as well as carmakers Stellantis and General Motors and planemaker Boeing have said they would participate.
Mineral analysts warn that stockpiling might be a short-term solution to securing minerals but in the case of rare earths it could in fact deepen reliance on Beijing if Chinese supplies remain the cheapest on the market and are therefore used to fill the vault.
The post ‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance appeared first on Climate Home News.
‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance
There are days when the sulphur-like, toxic smell coming from the nearby oil facilities is so potent that Azuh Chinenye struggles to go outside her house early in the morning. “When you inhale, you as a person, your body system, and every other thing will change… you can’t stand the odour,” she said.
Chinenye lives in Oyigbo, a town less than 20 miles (32 km) from Port Harcourt, in the Niger Delta, the heart of Nigeria’s main oil-producing region.
Signs of the industry are everywhere in Oyigbo. Active flare stacks stand just metres from homes and businesses, whose walls are caked in soot. Close to a primary school, Climate Home News saw oil spilling from a corroded underground pipe.
The local oil field here was for many years owned and operated by Shell, until it was sold to a Nigerian firm for $533 million in early 2021. Since the sale, gas flaring has increased dramatically at Oyigbo, despite the new operator’s promise to “protect our planet” and the health of communities.
A local doctor and residents told Climate Home News that the opposite is happening in reality, as people struggle with the effects of noxious pollutants released by flaring at production facilities close to their homes.
Flaring worsens climate crisis
Fifteen times more gas was burned at the Oyigbo field in 2024 compared to 2020, according to an analysis of satellite data prepared for Climate Home News by SkyTruth, an environmental watchdog. This pattern is repeated at other fields previously owned by Shell across the Niger Delta, the data shows.
Flaring occurs when gas produced during oil drilling is burned off, instead of being utilised. The process releases vast amounts of carbon dioxide and methane, a potent planet-heating greenhouse gas, alongside toxic chemicals.
Failure to tackle gas flaring pushes global climate goals further out of reach, as cutting methane emissions from the oil and gas industry is widely seen by climate and energy experts as a quick win to slow global warming in the short term.
Shell claims to have significantly reduced its emissions and says it achieved zero routine flaring last year, but our analysis reveals that this was driven primarily by selling off high-emission assets – from the US to Nigeria – which are then free to continue polluting, albeit under different management.
After Shell divestments, flaring on the rise
A spokesperson for Shell told Climate Home News by email that, when the energy giant selects buyers for divestments, it assesses “a number of factors such as their financial strength, operating culture and environmental performance” and shares emissions reduction plans for the assets, where relevant.
But Shell does not monitor the performance of those assets once it has handed over control to the buyer, the spokesperson said, adding that regulation of operations by the new owner is carried out by governments.
After years of staying flat at the global level, flaring has risen again since 2023, including in Nigeria, where smaller home-grown firms have been ramping up production seeking to maximise oil revenues while lacking the expertise to prevent flaring, according to a World Bank report.
To understand more about how this wasteful and dangerous process continues to harm people’s lives, Climate Home News went to the Niger Delta, a part of the world unique for how many residents are forced to live in close proximity to flare stacks.
New owner promised sustainable production
“Gas flaring has increased in the years since Shell left,” said Chief Maduabuchi Felix Achiele, a community leader in Oyigbo. “In a week, we can observe two, three, four instances of flaring but when Shell was here, it was just once in a while.”
The field has been owned by Trans-Niger Oil and Gas (TNOG) since January 2021, along with the rest of the assets within the OML 17 oil block. The company that runs operations in the block – Lagos-based Heirs Energies – has boasted about turning an “underperforming asset” into an economic success after taking it over from Shell.
Heirs Energies said it has doubled production at OML 17 without that coming at the expense of environmental and climate integrity. “We can create a symmetry, a symbiotic relationship between oil and gas, the environment and people […] sustainability is infused in what we are doing,” its CEO Osayande Igiehon said in an interview late last year.
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Heirs Energies announced an agreement with the Nigerian National Petroleum Corporation (NNPC) to capture and monetise gas from OML 17 in December, though the company did not give a timeframe for when this project would be completed. Heirs failed to respond to questions sent by Climate Home News for this story.
On its website, the company says it is “committed to eliminating routine flaring and greenhouse gas emissions by 2025”. But the emissions figures and experience of the local community tell a radically different story.
Jump in flaring volumes
In OML 17, the vast oil block that covers much of the urban area of Port Harcourt and its surrounding towns like Oyigbo, gas flaring volumes grew sevenfold between 2020 – the last year of Shell’s involvement – and 2024, according to data presented to Climate Home News by SkyTruth.
To conduct this analysis, we tracked sales of onshore Nigerian assets, determined the location of each site using open source data, and then worked with SkyTruth to monitor flaring from these locations using data from the Earth Observation Group at the Colorado School of Mines.
Within OML 17, at Agbada, about a 30-minute drive north of Port Harcourt city centre, flaring doubled immediately after the sale in 2021. The following year, it almost doubled again and has remained close to that mark since. In Nkali, another asset within OML 17, flaring was nearly four times higher in the year after the sale.
While SkyTruth’s analysis was only able to use figures up to 2024, flaring remained high at these oil blocks throughout 2025, according to publicly available data from the NNPC.
This pattern can be seen in other oil blocks. Shell lost its right to operate OML 11 in August 2021, a block that spans the Ogoniland region. This helped the company to record a drop in emissions from both greenhouse gases and volatile organic compounds, while flaring went up under the block’s new operator, a subsidiary of the government-owned NNPC.
“Catastrophic” for communities
Communities in Ogoniland are seeking reparations for the decades-long environmental devastation caused by oil drilling. When it took control of the assets in 2021, the NNPC said the firm’s operations would be driven by “a social contract that would put the people and environment of the Niger Delta above pecuniary considerations”. Nonetheless, gas flaring tripled between 2021 and 2024 across all OML 11 fields, according to the analysis prepared by SkyTruth.
It was a similar story at Nembe Creek, part of the OML 29 block sold by Shell to Nigerian firm Aiteo for $1.7bn in March 2015. That year, flaring rose by around a quarter and then doubled in 2016.
For blighted Niger Delta communities, oil spill clean-ups are another broken promise
Production at the facility fell dramatically following a huge oil spill in 2021 that dumped 20,000 barrels of oil per day into local creeks for a month. Gas flaring at Nembe Creek spiked again in 2024, to an annual volume 54% higher than in 2014, when Shell still ran the field. In June 2024, another spill forced Aiteo to halt production.
Andrew Baxter, senior director for business and energy transition at the Environmental Defense Fund (EDF), told Climate Home News: “Flaring and spills harm human health. Flaring is not just a climate menace, it’s catastrophic to the communities that live around these facilities.”
It also wastes energy, he said. “This is a depressing waste of resources when there are still significant challenges around energy access,” he added.
Q&A: “False” climate solutions help keep fossil fuel firms in business
Given the need to address climate change, it’s important that when majors sell fossil fuel assets, buyers have comparable green targets and operating standards, according to organisations like EDF.
Baxter argued that the way Shell managed its troubled oil operations in the Niger Delta over decades had limited its options when selling them on.
“When operators have a poor environmental record and substandard record of community engagement, it should come as little surprise when they cannot attract many interested buyers for those assets. This rule applies globally,” he said.
Big Oil’s “paper decarbonisation”
Between 2016 and 2023, more than 60% of Shell’s emissions reductions came from divestments. That matters because, despite these emissions no longer being Shell’s responsibility, they are still heating up the Earth’s climate.
Krista Halttunen, a visiting researcher at Imperial College London who focuses on the future of the oil industry, told Climate Home News that companies like Shell are practising “paper decarbonisation”, reducing emissions in their annual reports rather than the real world.
“This story shows the limits of company-driven emissions reduction,” she said. “Very few companies are reducing real-world emissions. Fossil fuel companies can’t meaningfully decarbonise without changing their business model, because their whole reason for being is digging up material that will add more carbon to the atmosphere.”
Shell did not reply to Climate Home News’ questions about how it had achieved its emission reductions.
It also appears that Shell’s achievement of reaching zero routine flaring in 2025 was achieved in large part through the sale of its Nigerian assets. In March of that year Shell sold its onshore Nigerian assets to a consortium of companies called Renaissance Africa. Earlier, in 2023, Shell had stated that its remaining Nigerian assets accounted for around half of total routine and non-routine flaring in its integrated gas and upstream facilities.
Removing Nigerian assets from its portfolio, whether in the Renaissance deal or earlier transactions, may have helped transform Shell’s flaring emissions, but for people living in the Niger Delta life has stayed the same.
“Flaring is not new in this community,” explained Theodore Ike Ogu, a 60-year-old smallholder farmer who lives in Oyigbo. “We are suffering and flaring is increasing.”
Here, temperatures regularly hover around 35 degrees Celsius during the day, with humidity often exceeding 50%. When the flares are going full blast, the heat for those living and working nearby can be unbearable, locals said. At night, when the town is quiet, the noise from the flares keeps people awake.
Chief Maduabuchi recalled that residents used to collect water during the rainy season to drink and wash. “You can’t even use it to wash because, as it comes down, it is dirty because of the smoke,” he complained.
Health risks from toxic chemicals
Gas flaring releases harmful chemicals, and numerous studies, including some conducted in the Niger Delta, have linked living close to flares with being more likely to contract forms of cancer and respiratory illnesses.
Complaints from local communities about health issues and unexplained deaths have been rising in oil-producing communities such as Oyigbo as gas flaring intensifies, according to Dr Bieye Renner Briggs, a Port Harcourt-based public health physician and environmental advocate.
While he cautions that a direct link has not yet been scientifically proven in the Niger Delta, Dr Briggs says the connection is “probable”, given similar findings in other oil regions worldwide. He recommended performing routine autopsies in the local communities to establish clear evidence of whether deaths are caused by gas flaring or oil pollution.
Dr Briggs warned that people living near flare sites face a wide range of serious health hazards, from hypertension and cardiomyopathy, which can increase the risk of heart failure, to asthma, chronic bronchitis and kidney disease.
Soot particles released by flaring represent a particularly acute health risk, he warned. These are small enough to bypass the body’s natural defences and enter the bloodstream, increasing the risk of cancers and other conditions, he told Climate Home News. “Everything a smoker will suffer and more is what somebody that is exposed to soot will suffer,” he said, noting that, unlike smokers, residents can do little to limit their constant exposure.
The oil companies contacted by Climate Home News for this article, including Shell, did not respond to requests for comment on the health effects of flaring.
“I have different health issues: incessant lung pains, at times a cough, all those things, catarrh,” said Theodore Ike Ogu, adding there are “so many things that we notice health-wise which we believe are due to flaring”.
Azuh Chinenye’s husband, Kelechi Prince Azuh, died in May last year after suffering from breathing difficulties and frequent asthma attacks. “He was 49 years old,” she said, fighting back tears. “You see his poster outside there and three of the children are in university. He didn’t even see them complete their first year.”
“Nowhere else to go”
Oil production, meanwhile, has increased at former Shell fields. Extracting oil from mature fields like those in Nigeria produces a significant amount of associated gas and, in the absence of funding and infrastructure to make use of this, it is often flared.
Last May, Heirs Energies CEO Igiehon told the Financial Times that Nigerian firms could build better relationships with locals, after years of tension with oil majors over frequent spills and the destruction of local livelihoods. “We’re able to move around unfettered because we have a robust relationship with the communities,” he argued.
The increase in flaring in blocks like OML 17 has tested that idea.
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“Shell was great,” said Chief Maduabuchi, who explained that the company provided healthcare and food to the local community. The new operator, he says, “only gives us a small amount of rice, unlike Shell which used to give us each 50kg”.
Asked why she has chosen to stay in Oyigbo after her husband’s death, Azuh Chinenye explains that it’s much cheaper to live here than in the centre of Port Harcourt. She uses her inhaler when she struggles to breathe and tries not to go outside when the soot gets bad.
“I can easily pack up, but this is my compound, this is my community, and there is nowhere else I will go,” she said.
Cover photo: A woman empties a plastic bowl filled with tapioca, which is derived from cassava paste, on sewn sacks laid on the ground close to a gas flaring furnace in Ughelli, Delta State, Nigeria September 17, 2020. (Photo: REUTERS/Afolabi Sotunde)
The post Gas flaring soars in Niger Delta post-Shell, afflicting communities appeared first on Climate Home News.
Gas flaring soars in Niger Delta post-Shell, afflicting communities
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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