China News Brief and Action Alert

China: 2025 Mid-Year Emissions Report Card

August 16, 2025August 16, 2025

China’s emissions fell by 1.6% year-on-year in the first quarter of 2025. This reduction is primarily attributed to a 5.8% drop in the power sector’s CO2 emissions in Q1 2025.

As of mid-2025, China’s climate action presents a complex yet increasingly promising narrative. The nation, the world’s largest emitter, is demonstrating significant progress in its clean energy transition, leading to notable shifts in its emissions trajectory. However, challenges remain, particularly in fully decoupling economic growth from overall emissions increases.

1. New Data on Emissions and Policy Effectiveness

Remarkably, China has seen its greenhouse gas (GHG) emissions drop for the first time due to a surge in clean energy. According to a Carbon Brief analysis by Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (CREA), China’s emissions fell by 1.6% year-on-year in the first quarter of 2025 and by 1% over the last 12 months (as of March 2025). This occurred even as economic activity and energy demand continued to rise, indicating a crucial shift in the energy mix.

This reduction is primarily attributed to a 5.8% drop in the power sector’s CO2 emissions in Q1 2025. While overall power demand increased by 2.5%, thermal power generation (mainly coal and gas) declined by 4.7%. This suggests that clean power generation (from wind, solar, and nuclear sources) grew faster than electricity demand, thereby displacing fossil fuels.

Beyond the power sector, most other sectors, including cement, oil products, and steel production, also registered falling emissions between December 2024 and March 2025. Process emissions from cement production, for instance, have declined by 27% since their peak in 2021.

Despite these positive developments, it’s crucial to note that China’s emissions are still only 1% below their recent peak. This means a small rise could push them back to record levels, underscoring the need for sustained effort. Furthermore, the Climate Action Tracker (CAT) estimates China’s 2024 GHG emissions at 15.8 GtCO2e (excluding LULUCF), a marginal increase from 2023, reflecting stable emissions where rising fossil energy use is roughly offset by falling cement production.

China also released its First Biennial Transparency Report on Climate Change in January 2025, systematically disclosing GHG emissions data for 2020-2021 across five major sectors: energy, IPPU, agriculture, land use, LULUCF, and waste. This transparency is a positive step in providing clearer insights into China’s emissions profile.

2. New and Improved Policies

China has implemented and continues to develop significant policies aimed at emissions reduction:

  • Expansion of the National Emissions Trading Scheme (ETS): In March 2025, China’s Ministry of Ecology and Environment (MEE) approved the expansion of the national ETS to include emissions-intensive industries such as cement, steel, and aluminum. This significantly broadens the scope of carbon pricing, with the ETS now regulating approximately 60% of the country’s CO2 emissions and covering over 3,500 companies. This represents a substantial increase, with 40% of global industrial emissions now under carbon markets as of April 2025.
  • Comprehensive Emissions Reduction Plan: In April 2025, President Xi Jinping committed China to producing a comprehensive emissions reduction plan ahead of COP30 (November 2025). This updated plan will, for the first time, cover all economic sectors and greenhouse gases, including those beyond CO2, and set new goals for 2035. While the ambition of these new targets remains to be fully seen, the broader scope is a positive sign.
  • “1+N” Policy Framework: China continues to implement its “1+N” policy framework, with the “Opinions on Carbon Peaking and Carbon Neutrality” serving as the guiding document, supported by policies across ten major sectors, including energy, industry, construction, and transportation. These measures aim to accelerate the deployment of renewable energy, promote green industrial development, and enhance energy efficiency.
  • Hydrogen Energy Development Report (2025): In April 2025, the National Energy Administration (NEA) released a strategic roadmap for hydrogen energy, aiming to establish China as a global leader in the sector. This aligns with China’s broader 2030/2060 carbon neutrality goals, positioning hydrogen as a pillar of its clean energy transition. China already accounts for 50% of global green hydrogen production capacity.
  • Integrated Development of Transport and Energy: China’s Ministry of Transport and nine other departments released “Guiding Opinions to Facilitate the Integrated Development of the Transport Industry and the Energy Sector,” targeting a 10% share of electricity in transport energy use by 2027 and a clean, low-carbon energy system by 2035.

While the new annual energy intensity target of a 3% reduction for 2025 (now excluding renewables and nuclear) was seen by some as potentially low, overall policy signals demonstrate a continued commitment to the green transition.

3. Decrease in Fossil Fuel Use and Increase in Renewable Energy

Yes, there has been a significant decrease in the use of fossil fuels and a substantial increase in renewable energy in China during 2025, and this trend is highly likely to continue.

Decrease in Fossil Fuel Use:

  • In Q1 2025, coal-fired electricity generation decreased by 4%, and gas-fired power also declined by 4%. This resulted in a decrease in total electricity generated from fossil fuels, despite overall electricity demand growth.
  • The average coal plant in China operated at a record low 46.4% of the time during the first four months of 2025, indicating a structural decline in coal’s role in the power system.
  • Oil product consumption has been declining since March 2024.

Increase in Renewable Energy:

  • China has set new records in renewable energy deployment. In the first four months of 2025, wind and solar power generation capacity accounted for 89% of new capacity additions.
  • Solar capacity additions were staggering, with 105 GW added in the first four months of 2025, representing a 75% year-on-year increase. In May alone, China added 92.92 GW of new solar capacity, the highest monthly figure on record, pushing cumulative solar capacity past 1 TW (1,000 GW) by the end of May 2025.
  • Wind power additions were also significant, with 46 GW added in the first five months of 2025.
  • Renewables supplied 36% of power generation in Q1 2025.
  • China’s new energy storage (primarily lithium-ion) reached 78 GW by the end of 2024, nearly triple its 2025 target of 30 GW, demonstrating robust support for grid integration of renewables.

Why this is happening and why it is likely to continue:

This dramatic shift is primarily driven by:

  • Massive Investments and Manufacturing Prowess: China has made substantial investments in renewable energy manufacturing and deployment, resulting in significant cost reductions and economies of scale. It dominates the global EV industry, producing 70% of the world’s EVs.
  • Policy Support and Targets: Although China’s overall carbon intensity targets for the 14th Five-Year Plan (ending 2025) may be challenging, the country is significantly exceeding its renewable energy capacity targets. The 1,200 GW wind and solar capacity target for 2030 was reached six years ahead of schedule, with over 1,400 GW in 2024. This signals a strong policy push.
  • Economic Drivers: Clean energy technologies accounted for over 10% of China’s economy in 2024, contributing a quarter of its GDP. This highlights a powerful economic incentive to continue the transition.
  • Energy Security Concerns: Reducing reliance on imported fossil fuels enhances energy security.
  • Technological Advancements: Continuous innovation in solar, wind, battery storage, and smart grid technologies in China supports the accelerated deployment of these technologies.

This trend is highly likely to continue. The sheer momentum of renewable energy installations, coupled with expanded carbon market coverage, government support for clean industries, and the stated commitment to further climate action, creates a powerful trajectory. While some risks remain (e.g., potential for short-term rebounds in emissions due to economic stimulus or global trade disputes), the structural shift towards a cleaner energy system in China is firmly underway.

Report Card Country Rating: A- Strong Advance

Reasons for Rating:

China merits an A- (Strong Advance) rating based on its performance as of mid-2025.

  • Demonstrable Emission Reduction Driven by Clean Energy: For the first time, China has shown a quantifiable decrease in overall emissions directly attributable to clean power generation, which outpaced electricity demand growth. This is a monumental achievement for the world’s largest emitter, indicating a significant turning point in its climate efforts.
  • Aggressive Renewable Energy Deployment: China’s pace of renewable energy installation, particularly solar and wind, is unprecedented globally. Reaching its 2030 wind and solar capacity target six years ahead of schedule highlights an exceptional commitment and capability in accelerating the energy transition. This massive scale of deployment is directly displacing fossil fuels.
  • Expanding and Strengthening Climate Policies: The expansion of the national ETS to cover major industrial sectors, such as cement, steel, and aluminum, significantly broadens the reach of carbon pricing and incentivizes emissions reductions across key polluting sectors. The commitment to a comprehensive, all-GHG 2035 NDC also signals a more holistic approach to climate governance.
  • Strategic Vision for Green Growth: China is increasingly framing its climate action not just as an environmental imperative but as a core pillar of its economic development strategy, investing heavily in green industries, EVs, and hydrogen, and positioning itself as a global leader in these technologies.

While challenges remain, such as the need for absolute emission reduction targets for 2030 and ensuring continued decoupling of emissions from economic growth beyond the power sector, the progress observed in the first half of 2025 marks a strong advancement in China’s climate trajectory. The sheer scale and speed of its clean energy transition are setting a new global benchmark.

This Post was submitted by Climate Scorecard China Country Manager, Vincent Mao.

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