BEIJING (Reuters) – China invested 6.8 trillion yuan ($940 billion) in clean energy in 2024, approaching the $1.12 trillion in global investment in fossil fuels, according to a new analysis for U.K.-based research organisation Carbon Brief.
That was despite growth in China’s clean energy investments slowing to 7% from 40% in 2023 amid overcapacity. More than half of that investment came from China’s burgeoning electric vehicle, battery and solar industries.
The sector’s contribution to China’s GDP grew to 10% in 2024, up from 9% in 2023, according to the Carbon Brief research, which was conducted by analysts at the Helsinki-based Centre for Research on Energy and Clean Air (CREA).
Clean energy grew three times as fast as the Chinese economy, but its contribution to China’s economic growth fell to 26% of China’s GDP last year against 40% in 2023, as growth in the clean-energy economy cooled.
Clean energy industries were defined as including electric vehicles and batteries, renewable manufacturing and power generation, railways, electric grids and storage and energy efficiency.
The weaker contribution to GDP growth was also because of deflation and plunging prices for renewable energy equipment such as solar and batteries – although lower prices helped boost the adoption of renewables, the report said.
China’s burgeoning electric vehicle (EV) industry contributed the largest share of GDP, with 3 trillion yuan of GDP from EV and hybrid production and 1.4 trillion yuan from factory investment. Charging infrastructure contributed another 122 billion yuan.
Solar was the next-largest contributor to GDP at 2.8 trillion yuan, with 1 trillion of that tied to investment in power generation projects. Solar manufacturing investment contributed 779 billion yuan to GDP, slipping below power generation as prices for China’s solar panels reached all-time lows. Component exports and electricity generation comprised another 607 billion and 386 billion yuan, respectively.
The researchers expect growth in clean power investments to continue rapidly through 2025, the last year of the current five-year plan.
But they said more ambitious targets for the next plan in 2026-2030 are needed to sustain current levels of clean energy deployment.
(Reporting by Colleen Howe. Editing by Gerry Doyle)
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