Key facts
- CATL is investing in a hydropower project in Sichuan province via a joint venture with SDIC Power.
- The joint venture, Yalong River Yagen Hydropower Development, will build a new hydropower station.
- CATL will hold a 10% stake in the JV, with a total planned investment of 33.39 billion yuan ($4.66 billion).
- The project is expected to be fully commissioned by 2036 and will replace 2.664GW of fossil fuel power generation.
- This investment aims to secure renewable electricity and reduce the carbon footprint of CATL's battery products.
- Stricter sustainability requirements from overseas customers and regulators are driving these efforts.
China's largest battery producer, CATL, is set to invest in a significant hydropower project in Sichuan province through a joint venture with state-owned power producer SDIC Power. This strategic move aims to secure a stable supply of renewable electricity and reduce the carbon footprint associated with its battery manufacturing operations.
The joint venture, named Yalong River Yagen Hydropower Development, will focus on developing a second hydropower station on the Yalong River. The project carries a total planned investment of 33.39 billion yuan ($4.66 billion), with CATL holding a 10% stake. Construction is anticipated to span approximately 101 months, with the first generating unit expected to become operational in 2035 and full commissioning targeted for 2036.
Once operational, the hydropower station is projected to replace 2.664GW of coal-fired and natural gas-fired power generation capacity. SDIC Power estimates that the project will lead to annual savings of about 2.535 million tons of standard coal and 2.086 billion cubic meters of natural gas, while cutting CO2 emissions by approximately 4.51 million tons per year.
This investment underscores a broader trend among battery manufacturers to secure renewable energy sources as they face increasing pressure from international customers and regulators to lower emissions across their supply chains. CATL has been actively emphasizing the commercial benefits of emissions reductions and low-carbon manufacturing. Earlier this year, the company invested 10 billion yuan in a zero-carbon technology firm, and its energy storage products recently received one of China's first national-level carbon-footprint certifications for lithium batteries.
The European Union, a key export market for Chinese battery suppliers, is implementing stricter regulations, including the Carbon Border Adjustment Mechanism (CBAM) and new battery regulations, which mandate enhanced carbon footprint reporting and emissions performance. Starting February 18, 2027, batteries placed on the EU market will require electronic registration via a battery passport.
The hydropower investment also aligns with battery manufacturers' growing efforts to gain greater control over upstream resources and energy supply chains as the global demand for electric vehicles and energy storage systems continues to surge.