2024 may be remembered as a pivotal moment in China’s campaign to tackle climate change. In its annual World Energy Outlook, released last week, the International Energy Agency (IEA) projected that China’s fossil fuel use would peak next year and start to fall in 2025.
“We are at the turning point for China’s energy future,” said Laura Cozzi, the director of sustainability, technology, and outlooks at the IEA, who co-led the project.
China has accounted for nearly one-third of annual carbon dioxide emissions in recent years, so a turning point for China is also a turning point for the world. The IEA projects that China’s 2024 fossil fuel peak will be followed by a peak in its carbon emissions the next year, which would, in turn, allow global emissions to peak around the same time.
Climate scientists and advocates had hoped that this global emissions high point would come much sooner to avert climate chaos. “We are way behind,” said Lauri Myllyvirta, the lead analyst at the Center for Research on Energy and Clean Air. “It is very urgent for global emissions to peak and start to decline.” Given this urgency, whether China actually follows the IEA’s trajectory in the coming years is a critical question.
Driving the IEA’s projections is the fate of coal, the behemoth of China’s energy system. The IEA forecasts that while China’s natural gas use will likely continue to grow through 2040, and oil consumption will also rise for a few more years, coal is rapidly reaching its denouement. It is this trajectory that would cause the overall peak in fossil fuel use in 2024.
Coal has long reigned over China, but it is being unseated by economic troubles and a powerful insurgent. China’s economic slowdown means that cement and steel, the staples of China’s infrastructure boom, are no longer in such high demand. Cement output has been declining for years and steel output has begun to fall. Demand for those materials is only expected to fall further as China’s property downturn continues, and with it demand for the coal that is used to fuel the plants.
Meanwhile, renewable energy generation has risen with extraordinary speed in China. To put the scale into perspective, in just six months this year, China added more solar power capacity than Germany has built to date, according to Myllyvirta. (This is in part due to Chinese government subsidies, largely phased out in 2021, though some provincial subsidies remain.)
China’s electricity demand is still growing, but the IEA projects that in 2025, China will have enough wind and solar power to meet that new demand, obviating the need for additional coal power.
Coal burning accounts for 70 percent of China’s carbon emissions, so the fuel’s decline would undoubtedly be good news for the planet. However, great uncertainty still hangs over coal’s demise.
One main source of uncertainty is China’s economic trajectory. The most recent quarter’s data trended slightly up, but economists are unsure how China will weather the months and years ahead, with major problems in the property sector still looming. The IEA modeled low and high growth paths to show the effect of the economy on the energy transition—in both cases, emissions still peaked before 2030, but in the low growth case, demand for construction materials fell more rapidly, leading to a greater decline in coal use.
The other big question is whether the coal industry will go down without a fight. Chinese and international energy experts declared coal dead in China once before—around 2013—only to watch it rear its head again after government policy shifted. Even as renewable energy has surged, coal has maintained strong political backing. The government became fixated on energy security after facing an energy crisis in 2021, the Russia-Ukraine war’s impact on global energy markets, and extreme weather that has dried up China’s hydropower reservoirs in recent years.
To solve that energy security problem, China has continued to build coal plants—a lot of coal plants. In the first half of the year, China permitted more than 50 gigawatts of new coal power capacity, Greenpeace found, which is the equivalent of Japan’s total fleet. Chinese regulators have said that these power plants will be used as “supportive power sources,” which means that they will operate for fewer hours, providing backup power when renewable energy sources aren’t available.
And experts say that the Chinese government will remain committed to the expansion of renewable energy. “Solar, electric vehicles, and increasingly other parts of the clean energy transition are becoming a mainstay for Chinese economic growth,” said Cozzi, the IEA sustainability director, which gives the government further incentive to promote those industries.
However, the new coal plants could still slow the transition. The power companies may seek to extend the life of those plants as much as possible once they’re built. “To me, it is clear that there is going to have to be a massive showdown between the coal industry and clean energy industry,” Myllyvirta said. “Both of them have made such big investments; they’re banking on entirely different emissions trajectories, so that fight is going to happen.”
Yan Qin, a China energy analyst at Refinitiv, said that due to the coal construction spree and the challenge of integrating all the new renewable energy sources into the power grid, she predicts that emissions won’t fall as soon as 2025. “I think IEA’s projection is a bit optimistic … I think it’s more likely to be 2028,” she said.
Of course, even if China does start to taper down its fossil fuel use—and emissions—in 2025, that is just the beginning of the battle. The Intergovernmental Panel on Climate Change found that the world needs to cut carbon emissions by about 45 percent from 2010 levels by 2030 and reach net-zero emissions by 2050 to have a chance of keeping global temperature rise below 1.5 degrees Celsius. China is far from that path today. To get on track, it would have to exceed its remarkable rate of renewable energy construction in the coming years—reaching 400 gigawatts of new solar in 2030, the IEA projects. (That is more than four times what China built in 2022.)
China is widely expected to meet its current climate goals—namely, peaking emissions and building 1,200 gigawatts of wind and solar power capacity by 2030. But experts don’t see much appetite from the government to commit to more aggressive targets before that point amid the country’s economic uncertainty.
China would rather over-achieve its targets than struggle to meet new ones, Qin said. And the government has yet to commit to targets between 2030 and 2060, leaving a large blank space for the energy transition to play out after the intended peak in emissions.
“There are not targets or commitments from China’s side on what happens next before the carbon neutrality deadline in 2060,” Myllyvirta said. “So the shape of the emissions trajectory from there on is a huge open question.”
