Clean Energy Shifts China’s CO₂ Emissions From Growth To Decline

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For the first time in modern history, China’s annual CO₂ emissions have dropped—not due to economic turmoil or external shocks, but from a deliberate and sustained expansion of clean energy infrastructure. The significance of this milestone cannot be overstated. China’s emissions had risen relentlessly over decades, driven by rapid industrialization and urbanization. This recent reversal, reported by Carbon Brief from analysis by China-focused energy analyst Lauri Myllyvirta, marks a critical turning point, with emissions now trending downward year over year for a full 12 months. The question is whether this shift signals the start of a sustained and permanent decline, or if it’s merely a transient dip that could reverse itself under changed economic or policy conditions.

The data from Carbon Brief indicate a roughly 1% decline in China’s total CO₂ emissions for the year ending March 2025 compared to the previous year. This reduction primarily stems from an even sharper decline in emissions from the electricity sector, which fell by nearly 6% in just the first quarter of 2025 alone. Importantly, this decrease happened even as electricity demand continued to grow at approximately 2.5%. Renewables, nuclear, and other clean energy sources outpaced this rising demand, systematically squeezing out fossil-fuel-based generation—primarily coal. This dynamic is not a temporary artifact; it reflects the structural changes China has pursued with massive investment and policy support for renewables, which are now consistently cheaper and increasingly more reliable than coal.

This shift aligns closely with forecasts I’ve published over recent years, highlighting China’s aggressive investments in renewable energy. Since the early 2020s, China has built renewable capacity at an extraordinary pace, adding hundreds of gigawatts annually. Back in 2023 and 2024, I projected a scenario where renewables would start sharply reducing the utilization rates of coal plants by mid-decade, eventually cutting power-sector emissions significantly by 2030. Indeed, the recent data confirm this trajectory is beginning to play out. Coal power plant utilization is decreasing markedly, making coal less economically viable as renewables flood the grid. My earlier predictions about peak coal consumption, which I anticipated would occur by around 2024, are now strongly supported by this new data.

Looking at transportation, the story is equally promising. Carbon Brief points out that China’s oil consumption likely peaked around early 2024 and has subsequently declined, driven primarily by the rapid electrification of road transport. Electric vehicle adoption in China has outpaced even optimistic forecasts. By the end of 2024, electric vehicles accounted for over 30% of new car sales in China. The pace of electrification is not limited to passenger vehicles. Commercial vehicles—including buses, delivery vans, and even heavy trucks—are rapidly transitioning to electric. In 2024 alone, China sold over 82,000 electric heavy-duty trucks, a segment almost nonexistent elsewhere in the world. This electrification push is a deliberate strategic move by the Chinese government, supported by robust industrial policy, and it is now directly reducing oil demand and associated emissions.

However, the industrial sector presents a more complex picture. While cement production in China has declined steadily since peaking in 2021—down nearly 28% from its peak—other industrial emissions, notably from steel production, remain stubbornly close to their historical highs. The slowdown in real estate construction is clearly influencing cement output, but steel production has shown resilience, even edging slightly upwards in early 2025 due to temporary factors like pre-tariff export surges and infrastructure stimulus measures. Moreover, the coal-to-chemicals sector remains a critical exception to the broader industrial decline. Driven by China’s strategic goal to reduce dependence on imported petroleum, coal-to-chemicals production continues to grow robustly, underpinned by relatively low domestic coal prices and geopolitical pressures to enhance energy security.

This divergence within industry underscores a cautionary note. While my previous analyses predicted a structural decline in steel and cement as China’s infrastructure boom ends, the coal-to-chemicals sector was always identified as a challenging outlier. Its current expansion, though troubling from an emissions standpoint, was anticipated as a likely hurdle to broader emissions reductions. Still, innovation and electrification in chemical production are accelerating, with notable projects already underway, suggesting that even this hard-to-abate sector may see significant emissions reductions in the coming years.

Globally, the implications of China’s recent emissions decline are profound. China has been the single largest contributor to global emissions growth for decades, although still far below the United States in total CO2e emissions since the beginning of the Industrial Revolution. A sustained reversal of this trend would alter the global emissions trajectory dramatically, reshaping international climate negotiations, global carbon markets, and investment patterns in clean technologies. If China’s emissions continue to fall steadily, it may well prompt other nations to accelerate their own transitions, creating a powerful positive feedback loop for global climate action.

However, considerable risks and uncertainties remain. Economic policymakers in China frequently prioritize short-term growth, and any major economic stimulus, especially involving infrastructure or heavy industry, could reverse emissions declines at least temporarily. Moreover, maintaining the current rate of renewable deployment is essential. If investment or policy momentum falters, coal plants could quickly ramp back up to meet increasing electricity demand. China’s forthcoming 2026–2030 Five-Year Plan will be crucial in determining whether these positive trends become firmly entrenched or remain vulnerable.

Looking forward, my expectation remains optimistic. China appears to have genuinely reached an emissions inflection point, primarily driven by clean electricity, transportation electrification, electrification of residential and commercial heat, and industrial electrification. The country’s economic growth for 2024 was about 50% from clean economy markets, including batteries, EVs, solar panels, and wind turbines. If the country continues along this path, the declines now seen will likely steepen, enabling China to meet—and perhaps even exceed—its stated goal of peaking emissions before 2030. In fact, the current trajectory suggests emissions may already have peaked in late 2024. By 2030, China’s power-sector emissions could realistically fall by more than 20%, and substantial reductions in transport and industrial sectors could follow suit.

This moment represents a critical juncture in global climate strategy. If China succeeds in locking in these early emissions declines through sustained renewable expansion, electrification, and industrial restructuring, it will not only reshape its own economic and environmental future but also profoundly impact global climate ambitions. Policymakers and investors worldwide should closely monitor these trends, as China’s evolving emissions story will inevitably influence global climate policy and the pace of global decarbonization. The decline we see now may indeed be the beginning of one of the most consequential turning points in global climate history.