Climate crisis, China will reach peak emissions in 2025

The results of the UN climate conferences continue to be disappointing, but the decarbonisation of the planet proceeds anyway. This year China will for the first time show a stable decline in greenhouse gas emissions, despite growing energy demand and booming manufacturing. After the short-lived setback during the pandemic, this could be the first real sign that the world's largest polluter has finally reached its emissions peak, while other industrialised countries, starting with the European Union and the United States, have already surpassed it in the 1990s and early 2000s.

Growth in clean energy helped drive China's carbon dioxide emissions down by 1% year-on-year in the first half of 2025, extending a downward trend that began as early as March 2024, according to a report by the Centre for Research on Energy and Clean Air. In particular, CO2 production from the power sector - the main source of emissions - decreased by 3% in the first half of the year, thanks to the growth of solar energy, which offset the increase in electricity demand. In fact, with an increase of about 270 terawatt hours, production from renewables (excluding hydro) far exceeded the demand growth of 170 terawatt hours in the first half of the year. Coal use in the power sector (a source that still generates more than half of China's electricity) also decreased by 3.4 per cent compared to the same period last year. The new analysis shows that the record increase in solar capacity, with 212 new gigawatts installed in the first half of the year alone, is the main factor that is setting China's CO2 emissions on a downward path through 2025.

Another important factor is the electric transition in transport: last year the boom in electric vehicles exceeded all expectations, reaching almost half of all vehicles sold, even after the 'explosive' growth of 2023. In fact, the production of petrol and diesel has continued to decline, as electric vehicles have eaten into the demand for automotive fuel. At the same time, the heavily polluting construction sector is in decline. In the first half of this year, emissions from the building materials sector fell by 3% and those from the metal industry by 1%, with cement down 4% and steel production down 3%, compared to the same period last year. The reason for these reductions is the continued contraction in construction, with real estate investment down 11% and the area covered by new construction sites down 20%.

On the other hand, the use of coal to produce synthetic fuels and chemicals is making it more difficult for China to meet the deadlines of several important climate targets. These include targets to reduce carbon intensity (emissions per unit of GDP), which would require strict control of coal consumption growth, as well as increasing the share of cleaner electric arc steelmaking in total steel production. Instead, the opposite is happening: the share of electric arc production has fallen from 10.2 per cent in 2024 to 9.8 per cent in the first half of 2025, despite the government's target of 15 per cent for this year.

In 2020, Chinese President Xi Jinping had set a twofold goal for China: to reach peak carbon emissions by 2030 and carbon neutrality, i.e. zero net emissions, by 2060. To meet these targets, Beijing had committed to reducing its carbon intensity by more than 65% by 2030, compared to 2005 levels. An unachievable goal if the pace is not changed, according to Lauri Myllyvirta, chief analyst at Crea. Despite the drop in CO₂ emissions planned for 2025, the Crea report in fact shows that the country will not reach the target of reducing carbon intensity by 18% from 2020 to 2025. Myllyvirta argues that China would need an 'unprecedented' 9.7 per cent reduction in carbon intensity in 2025 to reach its target, a drop that it will clearly not achieve.