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China exceeded its 2030 solar and wind power targets six years early, and is now home to more than 40% of all global renewables capacity
From May 2024–May 2025, China’s emissions fell even as electricity generation rose – a potential turning point in global efforts to tackle climate change
China’s dominance in clean technology and energy metals gives it geopolitical leverage and an economic edge – the country’s clean technology exports are set to exceed USD 340 billion by 2035
Investors will discover opportunities in electricity grid infrastructure upgrades, clean technology innovations, and national efforts to secure energy metals supply chains.
In April 2005, a 3-metre tall, bright red, fibreglass dinosaur appeared on the steps of the Asian Art Museum in San Francisco – across its chest was stamped the phrase ‘MADE IN CHINA’. In 2017, a 2-metre version stood in the atrium of the Denver art museum in Colorado. A third is housed in the collection of the Johnson Museum of Art at Cornell University, New York State.
Produced by artist Sui Jianguo, the pieces reflect on China’s role as the world’s factory – with everything from toy dinosaurs to mega-container-ships manufactured in China for export, the ‘Made in China’ label has become a ubiquitous part of modern life. It has also become a central driver of climate change – since 2005, China has been the world’s leading greenhouse gas (GHG) emitter1.
Made in China, by Sui Jianguo, Denver art museum
Now, though, ‘Made in China’ is gaining a new meaning. In 2024, it is estimated that China’s exports of solar panels, batteries, electric vehicles (EVs) and wind turbines cut emissions in the rest of the world by 1%, with the CO2 emitted during their manufacture offset in less than a year of operation2. China’s clean energy footprint now spans 191 of the 192 UN member states, via sales of EVs and renewable energy infrastructure and equipment.3
For sustainability-focussed investors, 2025 has been a time of uncertainty. With President Donald Trump withdrawing the US from the Paris Climate Accords and taking an axe to his predecessors’ environmental commitments, many fear sustainability is being cancelled. At Lombard Odier, we believe a different story is emerging.
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China – still a climate villain?
For many years, China has been cast as a climate villain. Take a visit to the Yuanyanghu power station in China’s coal-rich Ningxia Hui region, and it’s easy to see why. There, with its 200-metre-high chimneys dominating the landscape, one of China’s biggest thermal power stations burns through thousands of tonnes of coal every day.
Across the last four decades, China’s emergence as the world’s leading manufacturer has been accompanied by a six-fold rise in coal consumption4 – according to the International Energy Agency (IEA), China now consumes almost 40% more coal than every other country on Earth combined.5 In 1985, China was responsible for 10% of global emissions – today the figure has risen to around 30%.6
Despite pledges by President Xi to limit coal power, last year the sector expanded at its fastest rate in a decade7. With more than 90% of all new global coal power capacity currently under construction or permitted in the country8, many observers still see China as ‘the problem’ when it comes to tackling climate change.
China is now home to more than 40% of global renewables capacity, yet the sector continues to set annual records for renewable capacity growth
The power paradox
There is a very different side to the story, however. Just a ten-minute drive south-east of Yuanyanghu is the huge Ningdong solar project. Sited on former mining land, within view of Yuanyanghu’s vast twin chimneys, the project generates enough emissions-free electricity to power one million households.9
This seemingly odd couple is a sign of transition. The Ningdong solar farm is one of thousands of utility-scale renewables installations across the country, with more being built every week, often in close proximity to, or even integrated with, coal-power.
Despite its continuing appetite for coal, China’s energy sector is hungrier still for renewables. The CCP’s target of installing 1,200 GW of solar and wind capacity by 2030 has already been passed, six years early.10 The country is now home to more than 40% of global renewables capacity11, yet the sector continues to set annual records for renewable capacity growth12. As of today, 74% of the world’s new solar and wind projects are being constructed in China.13
This exponential growth is having an impact. For the first time in history, China’s total carbon emissions fell over the 12 months to May 2025, even as overall electricity generation rose14. For a world desperate to turn the emissions corner, this could be a pivotal moment.
Much of the growth in renewables is down to one key trend: China is electrifying more quickly than any other major economy. This is seen most clearly in the transport sector, where China now has a high-speed, all-electric rail network more than five times the size of the EU’s equivalent15, is home to 90% of the world’s electric bus fleet16, and has seen a more than 55-fold increase in the number of new sales of electric vehicles (including both all-electric and hybrid cars) in just the last decade17.
The implications are profound. According to the IEA, electrification will be an essential component of achieving a net-zero economy by 2050.18 As the world’s biggest emitter, there is no route to net zero without China going electric.
With every newly installed windmill, solar panel and hydro-electric turbine, a country that was once heavily dependent on fossil fuel imports is taking a further step towards energy security
For the governing Chinese Communist Party, electrification is about more than climate goals, however. With every newly installed windmill, solar panel and hydro-electric turbine, a country that was once heavily dependent on fossil fuel imports is taking a further step towards energy security. As it does, it is fast-becoming the world’s first ‘electro-state’.
This is creating two clear competitive advantages. Today, economic growth is lagging global electricity demand19 – with growth highly dependent on energy availability, efficient and productive energy systems will become increasingly important. As China installs ever more renewables and electric end-user solutions – which can be as much as five times more efficient than today’s fossil fuel technologies20 – they are fast gaining a competitive edge.
China also dominates clean tech manufacturing – more than 80% of the world’s solar panels and batteries, more than 60% of wind power components, and around 40% of heat pumps are made in China.21 Chinese EVs have also helped China become the leading nation for car exports, overtaking Japan and Germany22. Furthermore, China is the leading producer of many of the ‘energy metals’ – such as lithium and cobalt – needed for the manufacture of clean energy technology such as batteries, solar panels and wind turbines.23
Clean technology is now a key contributor to the Chinese economy, providing 10% of the country’s GDP in 2024.24 According to the IEA, China’s clean tech exports are set to exceed USD 340 billion by 2035, the equivalent of the combined expected oil revenue of Saudi Arabia and the United Arab Emirates.25
Clean tech has also become a central pillar of China’s growing geopolitical strength. In response to the imposition of US trade tariffs, for instance, in April and May of this year China throttled exports of rare earth magnets – needed for electric vehicle drivetrains – to the US. In the US and her allies, some automotive plants were forced to suspend production entirely.26
In June, China lifted the restrictions as part of still-ongoing trade negotiations. Exports quickly rebounded,27 but a clear message had been sent – where China once depended on the rest of the world for fossil fuel imports, much of the world now depends on China for many of the essential components of clean technologies.
Far from being cancelled, sustainability is thriving – it’s just not where many observers might think. It’s being made in China
Sustainability’s new address
At Lombard Odier, we believe there are three key implications that must be factored into sustainable investment analysis.
Firstly, it is essential to build a nuanced understanding of the long-term changes taking place across today’s energy systems. A blanket ‘green bet’ will not win the day – for example, despite still-rising demand for new solar power installations around the world, many Western solar panel manufacturers have struggled as prices have plunged due to a glut of Chinese supply.
The key is to look instead for the myriad new opportunities being created as the world commits to sustainable solutions. For instance, renewables rollout requires vast grid infrastructure upgrades, underpinned by long-distance Ultra-High-Voltage direct current (UHVDC) cables. Demand for UHVDC cables currently outstrips supply two and a half times over28, pushing the total value of the orderbook from USD 3 billion annually to USD 20 billion29. Today, many of the world’s leading manufacturers of UHVDC cabling and technology are found in Europe.
Secondly, investors should watch for domestic investment as governments seek to build independence from China’s supply chain dominance. In energy metals, we are likely to see new mining and processing facilities, along with increased recycling. In Europe, battery recycling is forecast to grow to a self-sustaining market worth EUR 8 billion30. We will also see innovations in clean energy technologies that avoid the need for Chinese metals. In the US, for example, a new USD 1 billion plant will come online in 2027, manufacturing lithium-sulphur batteries that do not rely on graphite, nickel, manganese or cobalt, all of which are dominated by Chinese processing.31
Thirdly, we must recognise that the global drivers of the transition to a sustainable economy have changed. Where climate ideology once underpinned growth – market forces, innovation, and a desire to achieve technological and energy independence are now driving investment.
And where the West has traditionally been seen as the home of climate leadership, sustainability now has a new address. Far from being cancelled, sustainability is thriving – it’s just not where many observers might think. It’s being made in China.
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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