Experts say China’s coal consumption could peak in 2025

China’s coal consumption could hit a peak by 2025, according to a majority of experts.

New research from climate think tank the Centre for Research on Energy and Clean Air (CREA) and the International Society for Energy Transition Studies (ISETS) shows increasing optimism about the country’s green transition.

Of the industry and academic experts, 44 per cent believed the country’s CO2 emissions will peak, at the latest, in 2025.

There is also hope when it comes to China’s use of coal with 52 per cent expecting consumption to peak by 2025. Only 20 per cent said the peak would take place later. Coal currently makes up around 80 per cent of China’s emissions from fossil fuels.

“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,” says Xunpeng Shi from ISETS.

“As China continues its transition, the benefits are becoming increasingly clear – expanded deployment of clean energy and ongoing industrial transformation promise even greater advantages.”

Xunpeng adds that this is “fueling optimism about the future”.

Experts are growing more optimistic about China’s energy transition

Over the last three years, expert views have shifted towards optimism, according to CREA.

In 2022, 69 per cent of experts thought that China’s emissions would peak more than 15 per cent above what they were in 2020. By 2024, this share of experts had dropped to 44 per cent.

The proportion of experts who thought China’s CO2 emissions have already peaked or will peak by 2025 has increased significantly- rising from 15 per cent in 2022 to 21 per cent in 2023 then 44 per cent in 2024.

Growth in solar and wind power generating capacity has rapidly increased over the last few years. Investments in new fossil power generation and other polluting industries have been better controlled than last year. And more than 50 per cent of all vehicle sales were electric for three consecutive months in 2024.

The share of experts who believe China’s coal consumption has already peaked has more than doubled from 2023 to 2024. Between 2021 and 2025, the country put in place plans to strictly control the use of the fossil fuel. From 2026 to 2030 it aims to start phasing down coal.

While the majority of experts continue to think the country’s economic situation is leading to an acceleration of the energy transition, the proportion who think it could slow down progress in the latest report has increased.

What China needs to do to stay on track with Paris Agreement goals

CREA notes that energy consumption in China has continued to outpace the growth of the country’s GDP. Both energy consumption and electricity consumption are growing faster than in transition pathways that are aligned with Paris Agreement targets.

“Despite optimism around emissions and the renewable energy transition, there is still to date little clarity on China’s emissions pathway, which leaves open the possibility of emissions increases until 2030 and very slow reductions after,” says Lauri Myllyvirta, lead analyst at CREA.

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“This scenario would make meeting global climate targets all but impossible.”

While the country’s transition is on track in areas like emissions from transport, electric vehicle sales and construction emissions, it is still off track in many such as total CO2 emissions, total energy consumption and emissions of non-CO2 greenhouse gases.

In order to align with the Paris Agreement, China either needs to speed up renewable energy deployment even further or guide its economic development in a less energy-intensive direction, Myllyvirta adds.

A new national climate plan – due by February next year – could help to keep global climate goals in sight.

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“China’s upcoming nationally determined contributions (NDCs) will be essential for specifying and, ideally, firming up the country’s ambition on reducing emissions over the next decade, after the emission peak.”