China's CO2 emissions have been on a rollercoaster ride, but the latest analysis reveals a surprising trend: a 21-month period of flat or falling emissions, with a 1% dip in the final quarter of 2025. This trend, which began in March 2024, is a significant development, especially considering the country's massive energy demands. But here's where it gets controversial: China's carbon intensity, a measure of fossil fuel emissions per unit of GDP, fell by 4.7% in 2025, yet it's still far from the 18% target set by the 14th five-year plan.
The analysis, conducted by Carbon Brief, shows a mixed picture. While emissions from fossil fuels rose slightly (0.1%), a substantial 7% decline in CO2 from cement production balanced it out. This trend was observed across almost all major sectors, with transport, power, and building materials witnessing year-on-year decreases of 3%, 1.5%, and 7%, respectively. However, the chemicals industry stood out with a 12% emissions growth.
The energy sector saw some impressive developments. Solar power output soared by 43%, wind by 14%, and nuclear by 8%, collectively pushing down coal generation by 1.9%. Additionally, energy storage capacity expanded by a record 75 gigawatts (GW), outpacing the rise in peak demand of 55GW. This indicates that China's clean energy infrastructure is not only keeping up with demand but also surpassing it.
Despite these positive signs, China's overall emissions reduction falls short of its Paris Agreement commitments. To meet its key climate pledge, China needs to cut its carbon intensity by a substantial 23% over the next five years. This raises a critical question: Will China's policymakers maintain their commitment to this ambitious target?
The upcoming 15th five-year plan, due in March, will be a pivotal moment. It will determine whether China's emissions have peaked or if they will rise again, potentially reaching the officially targeted date of 'before 2030'. The current trend of flat or falling emissions is a delicate balance, with emissions falling in sectors like transport, power, cement, and metals, but rising in the chemicals industry.
The power sector, China's largest emitter, saw electricity demand grow by 520 terawatt hours (TWh) in 2025. Clean energy sources rose to the challenge, with solar and wind power generation increasing by 43% and 14%, respectively, and nuclear power contributing an additional 8%. This surge in clean energy met all the growth in demand, with hydropower and bioenergy also playing a role.
However, there's a catch. The growth in solar and wind power generation hasn't kept pace with capacity increases, suggesting a potential issue with capacity utilization. This could be due to unreported curtailment, where wind and solar sites are switched off due to grid congestion. If these grid issues are resolved, existing wind and solar capacity could produce even more power.
The year 2025 also marked a potential turning point in energy storage. For the first time, energy storage capacity grew faster than peak electricity demand and the average growth of the past decade. This growth is set to continue, thanks to a new policy by China's National Development and Reform Commission (NDRC), which will support energy storage sites with 'capacity payments'.
China's energy storage expansion is crucial as it provides an alternative to relying solely on fossil fuel-based capacity to meet peak loads. This shift could significantly impact the country's emissions trajectory.
Looking ahead, China's key climate commitments for the next five years are to peak CO2 emissions and reduce carbon intensity by more than 65% from 2005 levels. However, the recent clean energy additions have barely stabilized power sector emissions, indicating that meeting the 2030 targets will require sustained clean energy investments.
The central government's targets seem conservative, with the NDRC aiming for around 30% of power generation from solar and wind by 2030. If electricity demand follows the State Grid forecast, this could allow fossil fuel generation to grow at 3% annually, potentially jeopardizing China's Paris commitments.
The chemical industry stands as a significant outlier in China's emissions story. It was the only sector with substantial CO2 emissions growth in 2025, driven by increased coal and oil consumption. Without this sector's growth, China's total CO2 emissions would have dropped by an estimated 2%, rather than the reported 0.3%.
The coal-to-chemicals industry's expansion plans and oil and gas price fluctuations will significantly influence China's future emissions. If these plans are backed in the upcoming five-year plan, it could lead to continued emissions growth in this sector.
China's official plans aim for emissions to peak shortly before 2030, leaving room for a rebound from the current plateau. However, to meet the 2030 carbon intensity commitment, emissions must fall back to current levels by 2030. Whether policymakers remain committed to this pledge is a critical question.
The upcoming 15th five-year plan will be a litmus test, indicating whether China is on track to meet its Paris Agreement commitments. The plan's carbon intensity target will be a key indicator of the country's dedication to reducing emissions.
In conclusion, China's CO2 emissions trajectory is a complex interplay of clean energy growth, energy storage expansion, and policy decisions. While there are encouraging signs, the country still faces challenges in meeting its ambitious climate commitments. The decisions made in the coming months will be pivotal in shaping China's energy future and global climate efforts.
