Why China's CO2 emissions go back surprisingly

Published on: May 17, 2025 / Updated on: May 17, 2025 – Author: Konrad Wolfenstein

Why China's CO2 emissions are surprisingly declining – Image: Xpert.Digital

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China is demonstrating a remarkable transformation: After years of steadily increasing CO2 emissions, a decline is now apparent, starting earlier than anticipated. This development is closely linked to the unprecedented expansion of renewable energy, while at the same time global clean energy production has reached a historic milestone. For the first time since the 1940s, renewable energy and nuclear power together supply more than 40% of global electricity generation. Particularly noteworthy is that China is recording this emissions decline despite rising electricity demand – a sign that the massive expansion of renewable energy is indeed beginning to structurally reduce dependence on fossil fuels.

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The unexpected decline in Chinese emissions

China, the world's largest CO2 emitter, is showing a surprising trend: According to recent analyses, the country's CO2 emissions have fallen by around 1% in the last 12 months, with a particularly significant decrease of 1.6% in the first quarter of 2025 compared to the previous year. This is remarkable progress, especially since it is the first time that emissions have declined while energy consumption has increased.

China's CO2 emissions stagnated in the last quarter of 2024 compared to the same period of the previous year. Although CO2 emissions still increased by about 0.8% for the entire year of 2024, they remained below the previous year's level in the last 10 months of the year. This development indicates a structural shift, as the decline is occurring approximately six years earlier than originally planned by the Chinese government.

There are several reasons for this positive development: In addition to the massive expansion of renewable energies, economic factors also play a role. CO2 emissions in steel and cement production fell by 3% and 11% respectively, partly due to problems in the construction and real estate sectors. Furthermore, lower oil consumption, partly due to the increasing use of electric vehicles, contributes to the reduction in emissions.

The influence of climatic factors

Despite this positive development, it should be noted that during the heat waves of August and September 2024, electricity demand increased due to the greater use of air conditioning. This led to a 2% increase in electricity generation from coal and a 13% increase from gas. This seasonal effect underscores the challenges of continuously reducing emissions under changing climatic conditions.

China's unprecedented expansion of renewable energies

The main driver for the decline in emissions is China's historic expansion in renewable energy. By the end of 2024, China's cumulative installed renewable energy capacity had reached an impressive 1.889 billion kilowatts, a 25% increase year-on-year. This brought the share of renewable energy in China's total installed electricity generation capacity to a record 56%.

Particularly noteworthy is that 86% of the newly installed electricity capacity in China in 2024 came from renewable sources. The newly installed renewable energy capacity amounted to 373 million kilowatts, representing an annual increase of 23%. Solar energy dominated this growth, with an increase of 278 million kilowatts.

Solar and wind power are overtaking fossil fuels

A historic milestone was reached at the end of March 2025: China's wind and solar capacity rose to 1,482 gigawatts, surpassing its thermal power generation capacity from fossil fuels for the first time. This turning point marks an important step in China's energy transition.

China has already achieved its 2030 target of increasing installed wind and solar capacity to 1,200 gigawatts six years ahead of schedule. This enormous expansion is also reflected in the 2024 figures: China added 277.2 GW of solar capacity this year alone, representing 65% of the total newly installed capacity and a 28% increase compared to the previous year.

It is also impressive that in December 2024 alone, China added 68.3 GW of new solar capacity to the grid – more than the entire cumulative solar capacity installed in Australia over the past decades. Since 2013, China's installed wind power capacity has increased sixfold, while its installed solar capacity has increased 180-fold.

Global boom in renewable energies

China's development is part of a global trend. In 2024, electricity generation from renewable energy sources and nuclear power reached a historic milestone: it supplied 40.9% of global electricity generation – the highest share since the 1940s.

Global renewable energy capacity grew by a record 585 GW in 2024, representing 92.5% of total capacity expansion and an unprecedented annual growth rate of 15.1%. Solar power dominated, contributing 452 GW, more than three-quarters of the new capacity.

Renewable energy sources delivered a record 858 TWh of additional energy in 2024, 49% more than the previous record set in 2022. Solar energy saw growth of 29%, making it the fastest-growing energy source for the 20th consecutive year. Solar power generation has doubled in just three years, delivering more than 2,000 TWh of electricity in 2024, representing 6.9% of global electricity generation.

Investments and global distribution

Global investment in the transition to low-carbon energy increased by 11%, reaching a record $2.1 trillion in 2024. Electrified transport, renewable energy, and power grids were the biggest drivers of this investment.

However, there are significant geographical differences in the expansion of renewable energies. Most of the growth occurred in Asia, with China accounting for the largest share – almost 64% of the globally added capacity. Central America and the Caribbean, by contrast, contributed only 3.2%. The G7 and G20 countries were responsible for 14.3% and 90.3%, respectively, of the new capacity in 2024.

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China's renewable energies: Progress despite grid problems

Despite impressive progress, significant challenges remain. Although the share of renewable energy in China's electricity generation capacity has increased, its share of actual electricity generation has not risen accordingly. At the end of the first quarter of 2025, wind and solar combined contributed only 22.5% to electricity consumption, despite representing over half of the total installed capacity. This suggests grid access issues, as grid operators continue to prioritize electricity from fossil fuels.

Another problem is the lack of grid integration: a significant portion of the generated wind and solar energy is wasted because the grid systems are not yet adequately equipped to handle it. Declining international demand for Chinese wind turbines and solar panels, partly due to increasing protectionist measures, has prompted China to prioritize its domestic renewable energy capacity.

Why capacity isn't growing fast enough

Despite impressive figures, global progress in renewable energy is still insufficient to meet the goals of the Paris Climate Agreement. Capacity needs to grow by 16.6% annually until 2030 to triple installed renewable energy capacity. Current projections indicate that global renewable capacity will grow 2.7-fold by 2030, still falling short of the tripling target.

Furthermore, emissions from the global electricity sector increased by 1.7% in 2024 compared to 2023. This is partly due to the fact that, despite the leading share of renewable energies in new buildings, the global energy landscape is still heavily dependent on fossil fuel power plants, which continue to consume large quantities of coal, gas, and oil.

China's CO2 turnaround: Hope for the global climate future

China's unexpected decline in CO2 emissions marks a significant turning point in the global fight against climate change. It demonstrates that even in a country with enormous energy demands and strong economic development, a transition to renewable energies is possible and can actually lead to a reduction in emissions.

The massive expansion of renewable energies in China and worldwide gives cause for cautious optimism. The record expansion of solar and wind power, as well as increasing investments in green technologies, point to an accelerated energy transition. If this trend continues and the remaining challenges of grid integration and the decommissioning of fossil fuel capacity are overcome, this could make a crucial contribution to limiting global warming.

China's experience could serve as a model for other countries, demonstrating that faster decarbonization is possible than previously thought. The unexpected decline in emissions in China is a positive signal, offering hope that global climate goals might still be achievable.

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