China’s Carbon Emissions Set To Fall in 2024 Due To Surge In Clean Energy Investments

According to new analysis undertaken for Carbon Brief, China’s carbon emissions could peak this year before falling into a structural decline for the first time from next year after a record surge in clean energy investments. 
China, the world’s largest greenhouse gas emitter is currently projected to account for 45% of global CO2 emissions between 2023 and 2050. 

Over the past twenty years, China’s annual emissions from fossil fuels and cement have climbed rapidly, interrupted only by the economic slowdown of 2015-16 and the impact of zero-covid restrictions in 2022.
The world’s most polluting country saw an increase in its CO2 emissions of 4.7% year-on-year in the third quarter of 2023 after the Chinese government dropped its Covid restrictions back in January this year. The strongest growth was in oil demand and other sectors that had been affected by pandemic policies until zero-Covid controls were lifted at the end of 2022.However, this rebound in fossil fuel demand happened at the same time as a historic expansion of the country’s low-carbon energy sources which greatly exceeded policymakers’ targets and expectations. 

China is aiming to achieve carbon neutrality by 2060. The country has made significant investments in renewable energy sources such as wind and solar towards this end. 
According to the report, Beijing’s solar and wind installation targets were met by September and the market share of electric vehicles is already well ahead of the government’s 20% target for 2025.

Lauri Myllyvirta, a lead analyst at the Centre for Research on Energy and Clean Air (CREA) and the author of the report said:
“These record additions are all but guaranteed to push fossil-fuel electricity generation and CO2 emissions into decline in 2024.”

Lauri Myllyvirta said that the most striking growth has been in solar power. In this year alone, solar installations have increased by 210 gigawatts (GW) which is twice the total solar capacity of the US and four times what China added in 2020. 
Half of all the solar panels added in 2023 will be installed on rooftops. The rise in these installations is largely caused by China’s “whole county solar” model. This describes a model where a single auction is carried out to cover a targeted share of the rooftops in a county with solar panels all at the same time.

For this model, the developer does all the negotiating with the building owners and arranges contracts with the grid, financing, procurement, contracting, and installations. The model which could be described as a centralised development of distributed solar has enabled rooftop solar development at a vast scale.

The other half of solar installations are set to be in large utility-scale development, especially in the gigawatt-scale “clean energy bases” in western and Northern China.
CREA analysis which is based on official figures and commercial data found that China installed 70GW of wind power during 2023 which is more than the entire power generation capacity of the UK. Furthermore, the report also reveals that China is expected to add 7GW of hydropower and 3GW of nuclear power capacity by the end of this year. 

Combined with the increase in hydro output following a series of droughts, these record additions are almost guaranteed to push fossil-fuel electricity and CO2 emissions into decline in 2024.
China’s newly installed solar, wind, hydro, and nuclear capacity is predicted to generate an estimated 423TWh per year, equal to France's total electricity consumption.

Lauri Myllyvirta said:
“The rate of low-carbon energy expansion is now sufficient to not only meet but exceed the average annual increase in China’s demand for electricity overall. If this pace is maintained, or accelerated, it would mean that China’s electricity generation from fossil fuels would enter a period of structural decline which would also be a first. Moreover, this structural decline could come about despite the new wave of coal plant permitting and construction in the country.”

Representatives from China and the US recently met in preparation for the COP28 climate talks, although the details of the discussion were not made public.
With other major sectors, such as cement and steel, already seeing CO2 emissions fall, the drop in power sector emissions could drive a sustained, structural emissions decline for the country as a whole despite a wave of coal plant permitting and construction across the country. For the first time, the rate of low-carbon energy expansion is now sufficient to not only meet but exceed the average annual increase in China’s demand for electricity overall. 

At the end of June this year, China had 136GW of coal power capacity already under construction, with a further 99GW of planning permits. Since then, according to the research, another 25GW has been permitted which would breach a policy assurance made by the country’s president, Xi Jinping, to “strictly control new coal-fired power generation projects”.

The research is supported by forecasts from energy experts who say that emissions from global electricity generation could reach a peak this year before a peak in all energy emissions from next year.
Climate thinktank, Ember published a report in October declaring that the growth of renewables was so rapid that it was close to the rate required for the world to triple its capacity by the end of the decade to meet climate targets. 
In recent weeks, the International Energy Agency (IEA) added that emissions from all energy sources, including fossil fuels used for heating and fuels could peak in 2025 before beginning to decline in what would be a historic turning point for the energy industry. 
Lauri Myllyvirta said that China is predicting its coal power capacity will peak at 1.370GW in 2030 which would require an immediate end to new coal power permits or an accelerated shutdown of existing and planned coal plants.

Additionally, record additions of low-carbon energy deployment have been accompanied by rapid expansion in related manufacturing capacity. 
This could cause some tension with traditional interests in the country’s coal industry although it boosts the economic and political case for China to continue supporting low carbon growth at home and abroad. 
If you take into consideration the low-carbon electricity capacity already installed this year and the outlook for hydropower generation, it is likely that a drop in power sector emissions in 2024 is essentially locked in unless there is a major acceleration in electricity demand growth.

The development of power sector emissions very much depends on whether low-carbon additions are maintained or accelerated from 2025 onwards. 
If you look at the added annual generation from low-carbon energy installations in 2023, you will see that the total comes out to more than the average annual increase in China’s power demand, for the first time, marking a potential turning point.
At this point, the growth of low-carbon electricity would outweigh the overall growth of electricity demand and as a result, the amount of electricity generated using fossil fuels and the associated emissions would decline.