Welcome to Carbon Brief’s China Briefing.

China Briefing handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.

Key developments

Energy priorities in 2025 

XI SPEAKS: President Xi Jinping underscored China’s low-carbon technology success in his new year’s address for 2025, mentioning that China “produced more than 10m new energy vehicles” (NEVs, including electric and plug-in hybrids) in 2024, the state-run newspaper China Daily said. On 1 January, the party’s leading magazine on ideology, Qiushi, published the transcript of one of Xi’s speeches, in which he called on China to “advance an ecology-first, resource-conserving and green and low-carbon approach to development”, adding that China must “actively yet prudently work towards” its “dual carbon” goal.

PRIORITY TASKS: The national energy work conference – in which the top planning body the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) set objectives for the next year – was held in mid-December, according to International Energy Net. At the same meeting, the NEA set “10 key energy priorities” for the new year, including “implementing the energy law”, the Communist party-sponsored People’s Daily said in its coverage of the conference. (Read more about China’s new energy law below.) International Energy Net’s coverage reported that 2025 priorities included to “accelerate” construction of an energy system based on the need for “security and abundance” and the “economic feasibility” of low-carbon energy, as well as to vigorously promote “development and utilisation” of renewables. In a separate NDRC work conference, the body pledged to “accelerate” the shifting towards “dual-control” of carbon and “push forward carbon reduction, pollution reduction and green expansion”, Shanghai Securities News said. 

GREEN AGENDAS: Elsewhere, the Ministry of Finance (MOF)’s annual work conference emphasised financial support for “green and low-carbon transformation”, International Energy Net reported. MOF may release a 3tn yuan ($411bn) stimulus package this year that, according to Reuters, will have a large portion dedicated to electric vehicles (EVs) and “green energy”. The Ministry of Industry and Information Technology (MIIT) work conference highlighted the need for “innovation” to “cultivate and grow emerging industries”, a category that usually includes low-carbon technology, according to a state news agency Xinhua readout.

NATIONAL NETWORK: A recent policy document issued by the NDRC urged China to build a national unified market covering a number of economic and regulatory issues, BJX News reported, including calls to build a unified energy system. The policy added that China must ensure the construction of a unified power system, as well as establishing a “fair and open” national oil and gas market system. Bloomberg explained that the initiative has been in progess for years. 

Landmark law now in force 

NEW YEAR’S REGULATION: On 1 January, China’s first energy law came into force, China News reported, saying the move “helps ensure national energy security and serves as a cornerstone for promoting a green and low-carbon transition”. The law, it added, “includes hydrogen energy in national legislation for the first time, defining its role as an energy source”. China Energy Net quoted an NEA official saying the law would promote both the “development of non-fossil energy” and the ”clean and efficient use of coal”.

EXPERT VOICES: Prof Alex Wang, faculty co-director of the Emmett Institute on Climate Change and the Environment, told Carbon Brief that, in general, Chinese law normally “consolidates” existing “successful” policy, rather than setting new policy directions. North China Electric Power University’s Prof Wang Peng wrote in China Power News Net that the law is a symbol supporting development of “explicit goals for carbon emissions and renewable energy use”, and will lead to the provision of “specific guidelines for developing” renewable energy and strengthening of “mechanisms for green energy consumption”. Industry news outlet BJX News republished a commentary by China Coal chairman Wang Shudong arguing that the law “strengthens the role of coal as a basic guarantor [of energy security]”. 

Renewable energy buildout

SOLAR LEAP: China installed more than 200 gigawatts (GW) of solar capacity in 2024, according to industry newspaper China Energy Net. The country installed more than 300GW of renewable energy capacity in 2024, the party-affiliated People’s Daily reported, with China’s total solar and wind capacity now standing at 840GW and 510GW, respectively. A separate NDRC and NEA policy document called for China to add more than 200GW of “new energy” each year between 2025 and 2027, at a utilisation rate of 90%, said BJX News.

MISSED OPPORTUNITY: Despite the growth of renewables, China’s power generation from fossil fuels “inched up 1.9% year-on-year” between January and November, Reuters reported. Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, wrote on Bluesky that this was likely due to a “major increase in curtailment” of wind and solar, and particularly a rise in unreported curtailment. This, he added, indicates that the “grid is struggling to integrate” new renewable capacity additions and that “official curtailment tracking seems to be prone to manipulation”.

HYDROGEN ‘AT SCALE’: Elsewhere, China Energy News reported, MIIT released a new plan for accelerating the use of hydrogen in China’s industry, calling for the country to have “clean and low-carbon hydrogen to be applied at scale” by 2027 in areas including certain metals and coal-chemical industries. It added that China will also aim to use hydrogen for “industrial green microgrids, ships, aviation [and] rail transport”. 

MEGADAM: Separately, China has approved “construction of what will be the world’s largest hydropower dam” along a river in Tibet, according to Reuters. The newswire added that the project “could produce 300 terawatt hours of electricity annually” – equivalent to the UK’s total annual demand – but could also “affect millions downstream in India and Bangladesh”. A Bloomberg commentary by columnist David Fickling said that the dam, despite its size, would be “simply too small to move the needle” on China’s “insatiable appetite for coal”.

Driving the economy 

HOLIDAY SPLURGE: According to finance news outlet Yicai, Chinese EV giant BYD sold 4.3m vehicles in 2024. An end-of-year surge in EV purchases occurred in China due to the “nationwide buying spree” ahead of the end of a consumer goods trade-in policy that subsidised consumers’ replacement of petrol cars with EVs, the Hong Kong-based South China Morning Post (SCMP) reported. The January sales have already slowed down, said China Consumer Journal. Nevertheless, the Financial Times predicted that in 2025 EVs could, for the first time, “outsell” traditional fuel cars in China, with domestic EV sales expected to exceed 12m cars compared to less than 11m for petrol cars.

GROWTH SUPPORT: The government has subsequently “renewed a trade-in subsidy of up to 20,000 yuan ($2,730)” for EVs and hybrid cars, Bloomberg said. The People’s Daily reported that China will ensure that EVs make up “no less than 30%” of government car purchases “in principle”. Meanwhile, a draft proposal “restricting the export of technologies used in the production of lithium-ion batteries” has been issued, business newspaper Caixin said, which, if adopted, could “further cement China’s dominance” in the sector. A new discovery of large lithium reserves in Tibet has made China the “world’s second-largest holder” of the metal behind Chile, according to SCMP.

OVERCAPACITY: Separately, SCMP cited a prominent Chinese policymaker suggesting China should take action to abate “involution” – unnecessary internal competition – that is currently affecting several industries, including solar. The People’s Daily also carried a commentary on economic growth with the byline “benbao pinglunyuan” (本报评论员), meaning it was written by “top staff” and represents views at senior levels of the Communist party. It also asked local policymakers to stop “involution” by “not only focusing on the new three” of solar, batteries and EVs.

Captured

China emitted 11.6bn tonnes of carbon dioxide (CO2) in 2021, according to the country’s first biennial transparency report, which was submitted to the UN in early January. The report follows new reporting rules under the Paris Agreement, which require more regular and more timely information on emissions and progress towards tackling them. China had previously only reported its greenhouse gas inventory up to 2017.

Spotlight 

Experts: What will 2025 bring for China’s energy and climate policy?

Last year was significant for energy and climate developments in China. Carbon dioxide (CO2) emissions growth hovered close to 2023 levels throughout the year, raising the possibility of China’s CO2 emissions peaking before 2030.  On the global stage, China played a prominent role in getting to an agreement at COP29 in Baku, Azerbaijan.

Entering 2025, China has pledged to accelerate its energy transition. In this issue, Carbon Brief asks leading experts what they are watching for from China over the year ahead. Their responses have been edited for length and clarity. A full-length version of the article is available on the Carbon Brief website.

Dr Muyi Yang, senior electricity policy analyst for China, Ember

In 2025, China will need to strike a delicate balance between sustaining economic growth and advancing its decarbonisation agenda. This balancing act will require more than just scaling up renewables such as wind, solar and energy storage – coal power, which has long been central to China’s energy security and economic activity, also requires a major transformation.

This is not simply about shuttering a handful of coal-fired power plants, but managing the broader tensions and conflicts arising from the decline of the coal-electricity ecosystem. The impacts will extend to power generators, logistics companies, mining firms, equipment manufacturers and the coal-chemical industry, along with the socio-economic systems built around them. As China approaches a critical turning point – envisioning the start of absolute coal consumption reductions during the next five-year plan period – it must begin planning for this transition now.

Prof Boqiang Lin, dean, China Institute for Studies in Energy Policy 

In 2025, China’s energy and climate developments will focus on advancing its “dual-carbon” goals through several key initiatives. The deployment of “new energy” will accelerate, with offshore wind power, distributed solar and decentralised wind power seeing significant growth…Efforts to promote the “clean and efficient use” of coal will also progress, with coal power continuing to support the significant growth in wind and solar power.

Energy storage technologies and the development of smart grids will expand, while development of virtual power plants and large-scale vehicle-to-grid pilots will enhance grid efficiency and energy interaction. The supporting infrastructure for electric vehicles (EVs) will also receive more attention to support the rapid increase in EV penetration.

Dr Ilaria Mazzocco, deputy director and senior fellow with the trustee chair in Chinese business and economics, Center for Strategic & International Studies

What I’m looking out for is how China manages its increasingly tense external commercial relations and the growing demand internationally for Chinese foreign direct investment. Clean technologies, particularly the “new three” of solar, lithium-ion batteries and EVs, are at the heart of this tension. 

The brewing global conflict over the future of climate technology manufacturing and trade will depend in no small part on developments in the industries in China, including domestic demand and profitability of Chinese firms. Just as important are the types of trade-offs and deals that China’s trade partners, including the US, will lean towards [in their China policy going forward].

Dr Angel Hsu, associate professor of public policy and environment, ecology and energy, University of North Carolina

I am enthusiastic about the prospects for continued subnational cooperation between China and the US in climate and energy policies, especially following the strong interest shown at COP29. The numerous technical exchanges between states like Washington and the Chinese delegation…are promising developments. Plans are already in place to sustain this dialogue into 2025, building on the progress made this past year.

I am particularly eager to see how third-party countries and regions can serve as neutral grounds for collaboration. With the US likely stepping back from climate engagement, there’s a significant opportunity for increased alignment between China and ASEAN [the Association of Southeast Asian Nations], for example. China’s proactive approach at COP29, especially regarding voluntary climate financing, positions it well to lead in supporting south-east Asian nations in their decarbonisation efforts.

Dr Christoph Nedopil, director and professor of economics, Griffith Asia Institute

For 2025, China’s engagement in green energy will likely flourish in the Belt and Road Initiative (BRI), driven by the growing energy transition needs of partner countries. In Indonesia, for instance, president Prabowo’s accelerated green energy plan announced in December 2024 and newly signed agreements with China highlight the role of targeted collaboration with China in addressing local energy priorities. This includes investments not only in renewable energy, but also in critical technologies such as battery manufacturing.

I also hope we can make progress on three challenges: first, simultaneously accelerating investment in low-carbon energy and phase-down investment in fossil fuels; second, helping local employees benefit more from the green energy transition, particularly with more western trade restrictions; and, third, how can we accelerate greening of industrial and captive energy in the BRI. 

Watch, read, listen

WHO’S NEXT?: A commentary in Jiemian listed the challenges various industries face when entering the national carbon market in China. 

MUSHROOMING POWER: David Fishman, senior manager at the Lantau Group, spoke to the Odd Lots podcast about the levers behind China’s rapid buildout of nuclear power.

SHOW ME THE MONEY: A new report co-authored by Ma Jun, president of the Beijing-based Institute of Finance and Sustainability for the CFA Institute, examined how one Chinese city used innovative finance mechanisms to decarbonise its heavy industry.

DECEMBER DEBRIEF: Caixin published an English version of its interview with Chinese climate envoy Liu Zhenmin, covering China’s view of the COP29 climate finance commitment, its future climate targets and China’s role in future climate negotiations. 

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10.92

In Celsius, the average temperature in China in 2024, which was the “warmest year on record, according to the China Meteorological Administration (CMA)”, China Daily reported. It added that “global warming is the primary reason for China recording above-average temperatures”, with China’s previous four years being the country’s “top four warmest years” since records began in 1961.

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New science 

China’s current carbon inequality is predominantly determined by capital disparity
Ecological Economics

The top 20% of China’s urban residents by income, who account for nearly 10% of the country’s population, are responsible for 33% of the country’s investment-related carbon emissions, a new study has found. Meanwhile, the lowest 20% of rural residents, who comprise 8.6% of the total population, contribute only 2% of these emissions, it said. The authors stated that most existing literature on China’s carbon inequality has “primarily concentrated on the inequality of household consumption-related emissions” while overlooking emissions related to investment. The paper’s findings, they add, suggest that emissions reduction efforts “should focus on the capital/investment of high-income groups”. 

Carbon dioxide emissions from industrial processes and product use are a non-ignorable factor in China’s mitigation

Communications Earth & Environment 

China’s CO2 emissions from industrial processes and product use (IPPU) exceeded 1,600m tonnes in 2020, according to new research. This estimate is 3.0-6.5% higher than estimates from other studies, according to the authors. The figure was reached using statistics taken from “18 industrial productions and two product uses” between 2000 and 2020. The study also identified a number of areas that could be key to mitigating IPPU emissions in future. 

China Briefing is compiled by Wanyuan Song and Anika Patel. It is edited by Wanyuan Song and Dr Simon Evans. Please send tips and feedback to [email protected]