A Carbon Brief analysis shows that in the first quarter of 2025, greenhouse gas emissions in China fell by 1.6% year-on-year, and by 1% over the past 12 months. This is a rare case: previously, such a decline was recorded only during crises, for example in 2008-2009, when emissions declined along with an economic downturn. However, the situation is different now – CO₂ emissions are falling amid rising energy consumption:

• In 2024, electricity demand in China increased.
• In Q1 2025, consumption grew by 2.5%.

A green shift in energy

The main reason for the decline in emissions is the rapid growth of renewable energy. According to China’s National Energy Administration (NEA):

• Solar and wind power plants added 111 billion kWh of capacity in Q1 2025, almost double the total increase in electricity consumption over the same period.
• As a result, emissions from the power sector fell by 5.8% (year-on-year in Q1) and by 2% over the past 12 months.

This suggests that China may have peaked its emissions from the power sector. If the trend continues, the country will meet its climate goal of peaking carbon emissions by 2030 much earlier.

Industry is the weak link

However, the picture is different outside the power sector:

• Emissions from the industrial sector increased by 3.5%, especially in the metals and chemical industries.
• Coal remains the key fuel for heavy industry, and its consumption in these industries is growing.

Factors that could change the trend

Climate risks

• A hot summer could sharply increase demand for air conditioning.
• Droughts (like in 2022-2023) will reduce hydroelectric output, forcing China to increase coal generation.

New rules for renewable energy

• Market pricing for solar and wind projects will be introduced from June 1, 2025, which could slow their profitability and growth rates.

US trade policy

• If the Trump administration increases protectionism, China could switch to domestic demand, which could increase the carbon intensity of the economy.

The future of Chinese emissions

BloombergNEF suggests that the global peak in energy emissions could be passed as early as 2024. If China consolidates the current trend, this will accelerate global decarbonization. However, the growth of industrial emissions and external factors do not yet allow us to confidently talk about a full and final peak.

Conclusion: China demonstrates that economic growth and emissions reduction are possible simultaneously – but only if renewable energy sources are developed faster. Now the question is whether the country will be able to overcome its dependence on coal in industry and adapt to new market and climate challenges.

*Sources from Carbon Brief, China National Energy Administration (NEA) and BloombergNEF