China’s emissions under current policies are projected to peak by 2025, five years ahead of its 2030 target, yet it still plans no significant nor meaningful emission reductions in the critical period before 2030. Energy and electricity demand forecasts continue to grow steadily: the primary question remains whether China’s record - and rapid - renewables deployment is enough to accelerate its post-coal transition and reduce fuel-switching to fossil gas in end-use sectors.
The government continues to champion the role of fossil fuels in transitioning its energy sector, with continued increases in fossil fuel production seen as key to providing stability and security, despite a national shift from limiting energy consumption to carbon emissions.
Carbon emissions peaking timelines in high-emitting industry sectors have been pushed back to align with the economy-wide 2030 peaking target, despite domestic signals suggesting there are opportunities for more action. Policymakers have room to increase ambition in China's climate, energy and sectoral targets but geopolitics, energy security concerns, and international diplomacy remain a lingering barrier.
China and the US released a much-anticipated joint statement on climate cooperation on 15 November 2023 ahead of COP28. While both countries supported the G20 Leaders Declaration to triple renewable energy capacity globally by 2030 and outlined further bilateral work on a series of focus areas, no concrete mitigation targets were made from the world’s largest historical and current emitters. A pledge to accelerate renewable energy deployment and reduce power sector emissions this decade after peaking is positive but is yet again set on a non-binding timeline and reduction level.
Prior to the statement, China also released its long-awaited Methane Action Plan, but the plan only sets basic directions to control methane emissions across sectors, again falling short of setting meaningful reduction targets.
The CAT’s overall rating for China’s policies and targets remains “Highly insufficient”.
In a year where China’s economy slowed from zero-COVID policies, subduing industrial and transport activity, China’s 2022 emissions declined 0.2% to 14.4 GtCO2e.
Our analysis shows China's emissions are expected to peak by 2025 and will plateau at high levels for the rest of the decade, although an acceleration of renewable deployment could cut annual emissions by 600 MtCO2, or 4% of today’s emissions, in the latter half of the decade.
We see absolute 2030 emission levels up by 1% (conservative estimate), or down by 3% (optimistic) compared with our earlier 2023 assessment. Either way, China’s climate and energy policies are currently not expected to be strong enough to drive down emissions in a substantial manner this decade. For a chance to limit global warming to 1.5 °C, it is critically important for China as the world’s largest emitter to rapidly decarbonise in the short-term by implementing more ambitious decarbonisation policies in its next five-year plan (2026-2030).
As in previous years, our analysis shows emission levels under domestic policies to be lower than China’s energy-related NDC targets. We project China to comfortably overachieve its non-fossil energy share and renewable capacity targets without substantially increasing its mitigation efforts, despite an increased emissions trajectory. Our analysis leads to the same findings as other studies, suggesting that China will achieve its target of 1,200 GW of wind and solar capacity by 2030 at least five years earlier.
However, if China's sluggish economic growth continues, and it is unable to cut its fossil fuel dependence before 2030, China will be in danger of missing its carbon intensity NDC target.
To strengthen its climate policy and to keep emissions in line with its 2060 carbon neutrality target, China could:
- Control and reduce fossil fuel dependence as energy consumption is projected to rise almost 9% from now to 2030. While record rates of renewable deployment are on the verge of meeting growing energy demand, this is not yet able to meaningfully cut fossil fuel consumption and bring down emissions in the medium-term.
High-level political signals, including President Xi Jinping’s speech at the 20th CPC National Congress, the 2023 Government Work Report from the “Two Sessions” (annual plenary sessions of two of China’s major political bodies), and strategies from national planning and energy institutions, all emphasise China’s energy security as its first order concern, with fossil fuels as an equal solution. Production and mining of coal in 2022 were at record high levels, while coal power capacity in the pipeline still remains by far the world's largest.
- Improve the formulation and coverage of its climate targets by setting an absolute economy-wide peaking target for greenhouse gas emissions. China’s existing peaking, carbon intensity, and non-fossil energy share targets are relative to economic growth or energy system developments, allowing the country to meet its NDC commitments while increasing emissions levels. The NDC and LTS targets do not directly cover non-CO2 greenhouse gases, which amount to 2.5 GtCO2e/yr or almost 18% of China’s total emissions, although China has now pledged to include all GHGs in its 2035 NDC.
- Raise the ambition of its energy-related climate (NDC) targets: our analysis shows China significantly overachieving its 1,200 GW of wind and solar capacity and 25% non-fossil share target by 2030. Wind and solar capacity, which already reached 921 GW in September 2023, is expected to reach at least 1,900 GW while the non-fossil share is expected to reach around 30% at the conservative end of our current policy scenario; at the optimistic end, wind and solar could surpass 3,200 GW with the non-fossil share reaching 34% of final consumption.
- Accelerate decarbonisation of high-emitting industry sectors by bringing carbon peaking timelines forward, as well as expanding the ETS sector coverage and improving its design. Industry associations and research from public institutions have suggested earlier carbon peaking timelines are feasible for critical sectors such as cement, steel and non-ferrous metals.
While China’s dependency on fossil fuels and high emission levels looks set to stay for the immediate future, the energy transition and preparation for a post-coal era continues to build momentum, highlighted by high rates of renewable installations, deepening reforms in the power sector, and mitigation policies in end-use sectors:
- China’s energy transition investments in non-fossil energy, storage, electrified transport and the circular economy remain a global leader and were larger than the next ten leading countries combined in 2022.
- Installed capacity for renewables (including hydro) has surpassed 1,380 GW, driven by 14th FYP targets such as generating 3300 TWh of electricity from renewable sources and having renewables make up at least half of incremental power demand growth by 2025. Half of incremental power demand growth in 2022 was met with wind and solar alone. As forecasted by the China Electricity Council (CEC), the combined installed capacity of wind and solar power will reach 1,000 GW by the end of 2023, accounting for more than a third of the country’s total generation capacity.
- China is aiming to build a national electricity spot market by 2030, allowing for the discovery of electricity prices in real-time and boosting renewable power consumption. The NDRC will formally launch inter-provincial spot power trading by the end of 2023 in preparation for a national market, building on the spot power trading that has been implemented in a handful of provinces since 2019.
- In transport, China exceeded the target it set for its 20% new energy vehicles (mostly electric) market share target in 2025, several years early. It has also published a range of industry and building sector plans, setting numerous efficiency targets for 2025.
The CAT rates China’s climate targets and policies as “Highly Insufficient”. The “Highly insufficient” rating indicates that China’s climate policies and commitments are not consistent with the Paris Agreement’s 1.5°C temperature limit and lead to a plateau of high, rather than falling, emissions levels.
The CAT rates China’s commitments as “Highly Insufficient” as emission levels under its NDC commitments are substantially higher than what would be deemed 1.5°C compatible compared to its “fair share” contribution. For this rating system, we treat China's NDC commitment as unconditional, as it has not indicated a level of ambition that would be achieved with international support (a conditional NDC target).
China's suite of sectoral 14th Five Year Plans (FYPs) set out a range of mitigation measures to prepare the country for a post-coal transition. While the energy transition is continuing to progress, non-fossil energy sources need to be deployed even faster than current record rates to both meet growing energy demand and reduce dependence on fossil fuels at the same time.
China’s emissions under current policies are projected to remain at high levels until 2030: even at the optimistic end of our current policy scenario the decrease in emissions to 2030 is not significant enough. Under current policies, the country is expected to significantly overachieve its energy-related NDC targets but is not yet guaranteed to meet its carbon intensity target, reflecting the need for China to increase its target ambitions. The CAT gives China’s climate policies a rating of “Highly Insufficient”.
China’s climate policies are governed by its Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality and Action Plan For Carbon Dioxide Peaking Before 2030, the “1+N” framework, as well as the 14th Five Year Plans (FYP), which includes energy and carbon intensity reduction targets, as well as targets in energy and end-use sectors.
Despite China’s intention to “strictly control coal consumption” before 2025 and to “phase down coal consumption” over the 15th FYP (2026–2030), coal is set to remain the backbone of the energy system as confirmed in the government’s Work Report 2023 and overarching energy documents. Coal production reached record levels in 2022 for the second year running.
Renewables are playing a larger and more obvious role in national energy security, despite the continuing strong focus on fossil fuels. According to the 14th FYPs on energy and renewables, China should reach a 20% non-fossil share in consumption and a 39% share in generation (33% from renewables) by 2025 and have half of all incremental power demand since 2020 come from renewable sources. The country also aims to build 1,200 GW of wind and solar by 2030, which we project it will already meet in the next few years.
In the end-use sectors, the government’s new industry peaking implementation plan has aligned the entire sector’s carbon emissions peaking timeline with China’s 2030 NDC target, while the 14th FYP for Green Industry Development has matched the economy-wide energy and emission intensity reduction targets.
Key emitting sectors, such as cement, steel, and aluminium are likely to be the first targeted in the scope expansion of the country’s ETS.
The New Electric Vehicle (NEV) Industry Development Plan (2021-2035) targeted NEV sales to take 20% of the market share by 2025 while the LTS targets 40% by 2030, but reports suggest market share already exceeded 25% in 2022 and is expected to rise significantly in 2023.
The 14th FYP for Building Energy Conservation and implementation plan sets energy consumption caps in building operations, energy efficiency improvement targets for new public and residential buildings by 20% and 30%, as well as renovation targets.
In the forestry sector, the government has increased efforts on expanding the country’s forestry and grasslands due to its slated role (as carbon sinks) in achieving China’s climate targets; its 14th FYP for forestry and grasslands increases forest coverage targets from 23% in 2020 to 24.1% in 2025.
The full policies and action analysis can be found here.
Under China’s NDC targets, the country’s emission levels would reach 13.9 GtCO2e/year in 2030, an increase of 26% from 2010 levels. The country’s existing policies are set to overachieve the energy-related NDC targets, an indication it could further raise those commitments but are not yet sufficient to ensure China meets its carbon intensity target.
The CAT keeps its rating of China’s NDC target against modelled domestic pathways in 2030 as “Highly Insufficient”, indicating that its 2030 domestic targets need substantial improvements to be consistent with the 1.5°C temperature limit. If all countries were to follow China’s approach, warming would reach over 2°C and up to 3°C.
This rating takes into account that China would need international support for a fraction of the policy actions required for it to be consistent with the 1.5°C limit.
China’s emission levels under its NDC commitments are substantially higher than what would be deemed 1.5°C compatible compared to our “fair share” approach, resulting in our unchanged rating of the NDC against China’s fair share of “Highly Insufficient”.
The “Highly insufficient” rating indicates that China’s NDC target in 2030 leads to high and plateauing, rather than falling, emissions when compared to its fair share and is not in line with any interpretation of a fair approach to meeting the 1.5°C temperature limit. If all countries were to follow China’s approach, warming could reach over 3°C and up to 4°C.
This rating takes into account the fact that China has effectively submitted an unconditional NDC target but has not indicated a level of emissions that would be achieved with international support (a conditional NDC target). In any event, the present level of unconditional commitment falls substantially short of the commitment that would be consistent with China's fair share contribution to meeting the 1.5°C limit.
China’s President Xi Jinping first announced China’s commitment to reach “carbon neutrality before 2060” in a declaration at the UN General Assembly in September 2020. China has since officially submitted a long-term strategy (LTS) to the UNFCCC in October 2021. As the LTS submission does not meet the majority of our criteria for a best-practice approach in LTS formulation, we keep China’s net-zero target evaluation as “Poor”.