China’s carbon dioxide (CO2) emissions are set to fall in 2024 and could be facing structural decline, due to record growth in the installation of new low-carbon energy sources.
New analysis for the Centre for Research on Energy and Clean Air (CREA) based on official figures and commercial data, shows China’s CO2 emissions continuing to rebound from the nation’s “zero-Covid” period, rising by an estimated 4.7% year-on-year in the third quarter of 2023.
The strongest growth was in oil demand and other sectors that had been affected by pandemic policies, until the lifting of zero-Covid controls at the end of 2022.
Among other key findings, the analysis revealed that China has been seeing a boom in manufacturing, which has offset a contraction in demand for carbon-intensive steel and cement due to the ongoing real-estate slump.
The emissions rebound in 2023 has also been accompanied by record installations of low-carbon electricity generating capacity, particularly wind and solar.
China’s economic recovery from Covid has been muted. To date, it has not repeated previous rounds of major infrastructure expansion after economic shocks, and Hydro generation is set to rebound from record lows due to drought in 2022-23.
There has been a surge of investment in manufacturing capacity, particularly for low-carbon technologies, including solar, electric vehicles, and batteries and this is creating an increasingly important interest group in China, which could affect the country’s approach to domestic and international climate politics.
However, coal power capacity continues to expand, setting the scene for a showdown between the country’s traditional and newly emerging interest groups, but taken together, these factors all but guarantee a decline in China’s CO2 emissions in 2024.
If coal interests fail to stall the expansion of China’s wind and solar capacity, then low-carbon energy growth would be sufficient to cover rising electricity demand beyond 2024. This would push fossil fuel use – and emissions – into an extended period of structural decline.