On 24 September 2025, speaking by video to the United Nations Climate Summit in New York, President Xi Jinping announced China's nationally determined contribution for 2035. It was the first time China had set an absolute emissions reduction target. By 2035 China will reduce economy-wide net greenhouse gas emissions by 7 to 10 per cent from peak levels, while striving to do better. The pledge also commits China to raise the share of non-fossil fuels in total energy consumption to over 30 per cent, to expand wind and solar capacity to more than six times the 2020 level with an aim of reaching 3,600 GW, to make new energy vehicles the mainstream of new vehicle sales, to extend the national emissions trading market to major high-emission sectors, to increase forest stock volume to over 24 billion cubic metres, and to basically establish a climate-adaptive society.
The reaction abroad divided along predictable lines. Those who expected a reduction of 30 per cent or more saw a disappointment. Those who remembered that China had never before committed to cutting emissions in absolute terms saw a breakthrough. Our view is that both reactions miss the most informative part of the announcement. The 7 to 10 per cent figure is a floor that China expects to beat. The 3,600 GW figure is the binding signal, and it tells markets more about the next decade than the emissions number does.
What the pledge says, and what it leaves open
The emissions target is expressed relative to a peak, not to a fixed base year. China has pledged to peak carbon dioxide emissions before 2030, and analysis for Carbon Brief in 2024 suggested that emissions may have peaked in 2023. If the peak has already occurred, the 2035 target is measured from a known level. If emissions rise again before peaking, the reference point moves upwards. That flexibility is deliberate, and it is the main reason critics regard the headline as weak.
The target also covers all greenhouse gases on a net basis. That brings methane and other non-CO2 gases into China's international commitments for the first time in absolute terms, and allows forest sinks to count. Both choices matter for how the target is met and verified.
The capacity number is the real commitment
The most recent full-year figures are for the end of 2024, when the NEA counted about 887 GW of solar and 521 GW of wind, roughly 1,410 GW combined. Solar alone passed 1,000 GW in May 2025. The commitment to reach 3,600 GW by 2035 therefore implies roughly two and a half times the end-2024 fleet, or average additions of around 200 GW a year over the eleven years to 2035.
That is below the pace of 2023 and 2024, when China added close to 300 GW and then more than 350 GW of wind and solar. It is also below the pace of the first half of 2025, inflated by the pre-June rush under the new market pricing rules. Read that way, the capacity target looks conservative. But it is also a floor, set at a level that keeps the domestic manufacturing base employed even if the annual build slows from its recent peaks. That is a signal to the solar and wind supply chains, as well as to the grid companies who must connect the capacity.
Why the headline is modest
Three factors explain the cautious emissions number.
First, China's institutions prefer targets they are confident of meeting. Past pledges, including the 1,200 GW wind and solar goal for 2030, were met years early. The political cost of missing an international commitment is high, and the system is designed to avoid it.
Second, energy security has become more prominent in Chinese policy since the power shortages of 2021 and 2022. Coal is still treated as a security reserve, and coal plants continue to be built. A target that required rapid coal retirement would conflict with that priority.
Third, the economic outlook is uncertain. Weak construction has helped reduce emissions from cement and steel. If policymakers succeed in stabilising the property sector, those emissions could rebound. A 7 to 10 per cent target leaves room for that.
What it means for markets
For global commodity markets, the pledge confirms that Chinese coal demand for power is capped and likely to decline in the 2030s, as clean capacity grows faster than demand. For oil, the commitment to make new energy vehicles the mainstream of sales reinforces a trend already visible in Chinese fuel demand. For gas, the picture is mixed. Gas plays a balancing role in power and a substitute role in industry, but it competes with coal reserves and batteries for both.
For clean technology markets, the 3,600 GW figure is a guarantee of minimum domestic demand. That reduces the risk that China's solar and wind manufacturers face a domestic collapse, but it does not resolve overcapacity. Exports will remain central to the industry's economics.
The carbon market expansion
The less publicised commitment to extend the national emissions trading system to cover major high-emission sectors is significant. The scheme currently covers the power sector. Extending it to steel, cement and aluminium would bring a large share of industrial emissions under a price. The design questions, particularly whether allocations remain intensity-based or move to absolute caps, will determine whether the market drives absolute reductions or simply efficiency gains.
Our position
China's 2035 pledge is cautious in its headline and ambitious in its detail. The 7 to 10 per cent reduction from peak is a floor that China expects to exceed, consistent with its practice of setting goals it can meet early. The 3,600 GW capacity commitment, the move to net greenhouse gas accounting and the expansion of carbon trading are more meaningful indicators of policy direction.
For governments and investors, the practical reading is that China will continue to build clean energy at a pace of at least 200 GW a year, will keep coal as a security reserve while its utilisation declines, and will prefer to surprise on the upside rather than commit to targets it might miss. The first test will come in the 15th Five-Year Plan, due in March 2026, which will show whether domestic targets are set to deliver more than the international floor.