After record renewables deployment, China is close—but maybe not close enough—to reducing emissions below last year’s levels after high temperatures spiked national energy consumption.
That result this year would push the country off course from meeting its 2025 “carbon intensity” target, which calls for at least a 2% reduction in emissions each year from 2024 to 2025, following rapid increases between 2020 and 2023, veteran analyst Lauri Myllyvirta reports for Carbon Brief.
The primary reason for the slower emissions reduction is that energy consumption is growing much faster than expected, writes Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air and senior fellow at the Asia Society Policy Institute. After rising earlier in 2024, emissions fell between March and August, only to increase again in August and September when record heat led to a surge in cooling demand. Weakened hydropower generation increased coal- and gas-fired power generation, even as wind and solar growth continued breaking records.
To achieve a reduction in emissions below 2023 levels, China now needs a 2% drop in emissions in the final months of the year.
“There is a good chance this will happen,” given that the country’s industrial power demand growth is slowing and because residents won’t be using their air conditioners anymore, Myllyvirta writes. But even then, China would be off track against its 2025 carbon intensity target.
The outlook is further complicated by a new economic stimulus package announced in late September. Unlike past stimulus plans that focused on industrial growth, this one will try using direct transfers to households to boost household spending. While this could help China grow in a less energy- and carbon-intensive way, it also includes subsidies for car and appliance purchases, which may steer household spending toward more energy-intensive goods.
China’s energy and industrial sectors are also changing. Though electricity demand was up 7.2% in the third quarter compared to the same time last year, 60% of that increase was from the residential and services sectors, with household demand up by “a blistering 15%.” Industrial power demand growth slowed down, with a 4.6% increase during July to September, down from 5.9% in the second quarter.
Meanwhile, renewable energy production surged, with solar generation up by 44%, wind by 24%, and hydropower by 11%. This growth stands in contrast to the slowdown in new coal power development. In the first half of 2024, approvals for new coal plants dropped by 80%, with just 9 gigawatts of new capacity, compared to 52 gigawatts in the same period last year. However, eight large coal projects were approved in the third quarter, indicating a potential rebound.
Chinese officials have made conservative public commitments regarding emissions, saying they are likely to continue rising until 2030 before peaking. This contrasts with other analyses that show China’s renewables growth may have set the country on a path to cut emissions much sooner.
“If the current downturn in China’s emissions is sustained—with emissions falling in the second quarter and stable in the third quarter—that would open the door to the country beginning to reduce emissions much faster than its current commitments require,” Myllyvirta wrote on social media.
Whether China’s leadership sticks to its cautious approach or adjusts based on these findings will shape the way the country cements the commitments in its next Nationally Determined Contribution under the Paris climate agreement, due February 2025.
