China, the world’s leading consumer of coal and the largest emitter of greenhouse gases, may be nearing a turning point in its energy consumption. A recent report published by the Centre for Research on Energy and Clean Air (CREA) and the International Society for Energy Transition Studies (ISETS) indicates that China’s coal consumption could peak as early as 2025.
This projection is based on several key observations. While coal remains a dominant force in China’s energy mix, the country has been aggressively expanding its renewable energy capacity at an unprecedented rate. This rapid growth, which has allowed China to surpass its wind and solar energy targets six years ahead of schedule, has fueled optimism among experts.
Further bolstering this outlook, coal power permits plummeted by 83 percent in the first half of 2024, and no new coal-based steelmaking projects received approval during the same period. A significant 52 percent of experts surveyed by CREA and ISETS predict a peak in coal consumption next year. Furthermore, the percentage of experts believing China’s coal consumption has already peaked has more than doubled compared to last year’s survey.
“Achieving carbon neutrality in a rapidly growing economy like China is no easy feat, but the country’s substantial efforts are starting to bear fruit,” stated Xunpeng Shi, president of ISETS. This sentiment is echoed in the survey’s findings regarding carbon dioxide emissions, with a substantial increase in experts anticipating a peak by 2025.
However, Lauri Myllyvirta, lead analyst at CREA, cautions that “little clarity on China’s emissions pathway” remains. There’s a possibility that emissions could continue to rise until 2030, followed by a period of “very slow” reductions. This concern is underscored by last year’s surge in China’s coal demand, which contributed to a global increase in coal consumption.
Despite projected growth in coal-fired power generation this year—the lowest rate in nearly a decade according to the International Energy Agency—energy consumption continues to outpace GDP growth. This growth, the CREA report highlights, surpasses the rates predicted in transition pathways aligned with the Paris Agreement.
Myllyvirta emphasizes the need for either a significant acceleration in renewable energy deployment or a shift towards less energy-intensive economic development. China has committed to peaking its greenhouse gas emissions by 2030 and achieving net-zero emissions by 2060. These ambitious goals are enshrined in their Nationally Determined Contributions (NDCs) under the Paris Agreement, which will be updated by February 2025.
An earlier CREA report recommended that China adopt a “strong but achievable target of reducing emissions by at least 30 percent” by 2035. The recent passage of a new energy law, which explicitly aims to “actively and steadily promote carbon peaking and carbon neutrality,” signals a continued commitment to these goals. The interplay between China’s economic growth, its aggressive push for renewable energy, and its commitment to international climate agreements will undoubtedly shape the global trajectory of emissions in the coming decades. The coming months and years will be crucial in determining whether China’s coal consumption truly peaks in 2025 and how effectively the country transitions to a cleaner energy future.
