Emissions in China are falling as renewable energy capacity increases

New analysis shows that China’s carbon dioxide emissions fell in March for the first time since the economy reopened after pandemic restrictions, suggesting that the country’s emissions may have peaked.

The March decline was the result of an increase in renewable capacity, which covered almost the entire increase in electricity demand, and a significant decline in activity in construction.

If renewable capacity continues to grow at record levels, China’s emissions could peak in 2023, according to an analysis by Lauri Myllyvirta of the Energy and Clean Air Research Center.

In an article for Carbon Brief, Myllyvirta said that China’s carbon dioxide emissions fell by three percent in March 2024 compared to the previous year, based on an analysis of official data.

Emissions were still higher this quarter, but this was due to January and February 2024 being compared to the still slow period after Covid-19 restrictions were lifted in December 2022.

March is “the first month to clearly show post-rebound emissions trends,” according to an analysis released Tuesday.

While the March data represents a single data point, it reflects last year’s forecasts and suggests key trends.

Emissions from the energy sector stabilized thanks to an increase in solar and wind generation, while steel production fell by eight percent and cement production fell by as much as 22 percent from a year earlier.

This reflects the slowdown in the real estate sector, which is likely to continue.

Meanwhile, the growing use of electric vehicles continues to impact oil demand, with electric vehicles now accounting for just over 10 percent of all vehicles on the road – up from seven percent last year, sales data show.

Crucially, while electricity demand has increased – including at the household level due to the purchase of air conditioners – almost 90 percent of the additional demand in March was met by renewable energy sources, Myllyvirta wrote.

Much of this renewable capacity comes from small solar plants, which are playing an increasingly important role as renewable energy sources grow in China.

In the first quarter of the year, the number of solar and wind installations increased by 40 percent, although there are still restrictions on access to the network for new capacity.

As a result, wind and solar power still account for just 15 percent of power generated in China, even though authorities are trying to better integrate renewable energy sources into the grid, Myllyvirta wrote.

However, China’s emissions path remains uncertain, with differing views on whether the renewable energy installation rate will increase or decrease.

The analysis shows that government targets for GDP growth and carbon intensity – emissions generated per unit of GDP – suggest Beijing may still be on track to increase emissions.

China also continues to invest in coal, and although coal capacity growth slowed somewhat in the first quarter of the year, a significant number of power plants remain in the pipeline.

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