(Bloomberg) — China is spewing less carbon into the atmosphere for the first time since the pandemic ended, signaling that the world’s biggest polluter may have peaked emissions more than half a decade before its own deadline, according to new research from Carbon Brief.
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Emissions fell 3% in March from the prior year, the first annual decline since January 2023, Lauri Myllyvirta, senior fellow at Asia Society Policy Institute, said in the report released on Tuesday.
Record wind and solar installations met nearly all of China’s increased demand for power, while the slowdown in the property sector helped reduce carbon from the highly pollutive steel and cement sectors, Myllyvirta said. Oil consumption growth, meanwhile, has “ground to a halt,” he said.
The analysis from Carbon Brief jibes with other research, including from BloombergNEF, which shows that global emissions may fall by as much as 2.5% this year, in large part due to reductions in China’s coal-fired electricity generation.
The drop in Chinese emissions reverses 14 months of increased pollution that followed rapid growth and investment in manufacturing, after the government leaned on its factory sector to help the economy recover from the pandemic. The decline is expected to continue in April, Myllyvirta said, reinforcing the view that emissions may have topped out last year, well before China’s 2030 deadline.
“A 2023 peak in China’s CO2 emissions is possible if the buildout of clean energy sources is kept at the record levels seen last year,” he said.
The turnaround has been driven by the remarkable rise of clean technology. China installed more solar power in 2023 than the US has ever built, while rapid advances in electrification mean that one in every 10 vehicles on the road no longer burns oil products, Myllyvirta said.
Peaking emissions is a key milestone on the road to net zero, which China has pledged to hit by 2060.
Still, there are increasing signs of friction in the country’s push to decarbonize. Grids throughout the country are struggling to deal with so much solar power, which peaks in the middle of the day and disappears at night. Installations fell on an annual basis in April for the second month in a row, although they’re still higher on the year.
Moreover, China’s ability to deliver on its net zero ambitions will be in doubt for as long as it continues to rely on coal, the dirtiest fossil fuel, as its main power source. The world’s coal fleet grew by 2% last year, with China accounting for about two thirds of that increase, Global Energy Monitor said last month.
On the Wire
Market excitement over China’s property rescue is cooling fast as doubts creep back in over policy effectiveness.
China’s oil demand and economic outlook could dim amid a declining credit impulse and slowing M2 growth, according to Bloomberg Intelligence.
China hit back at the Group of Seven nations over their criticism of Beijing’s global trade practices, accusing members of exaggerating the threat of overcapacity posed by the world’s second-largest economy.
This Week’s Diary
(All times Beijing unless noted.)
Tuesday, May 28:
Wednesday, May 29:
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CCTD’s weekly online briefing on Chinese coal, 15:00
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SHPGX hosts China gas power forum, day 2
Thursday, May 30:
Friday, May 24:
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China’s official PMIs for May, 09:30
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China weekly iron ore port stockpiles
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Shanghai exchange weekly commodities inventory, ~15:30
–With assistance from Kanupriya Kapoor.
(Updates with published items in second section)
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