China’s carbon dioxide emissions fell 1% in the second quarter of 2026 as oil consumption dropped 9% during the Strait of Hormuz crisis, the first time falling oil demand alone has driven a decline.
The finding comes from new analysis by Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. Oil use fell 9% overall and 16% in transport after supply from the Gulf was disrupted. Emissions fell even though coal-fired power generation kept rebounding. In every previous decline, coal had been the main driver.
The result extends a plateau in China’s emissions from fossil fuels and cement that has now lasted more than two years since a peak in March 2024. Emissions rose 2% in the first quarter, so they’re marginally up across the first half of 2026. Still, they remain below the 2023 to 2024 peak.
Electric vehicles did much of the work
Crude oil processing fell 11% in the quarter and oil imports fell 32%. Energy mix data from the National Bureau of Statistics indicate consumption fell around 9%, so reduced use played a substantial part. However, about 60% of the drop in imports came from a swing between building stockpiles and drawing them down.
Transport activity kept growing throughout. Cross-regional passenger trips rose 0.1% year on year, urban trips rose 2.9% and commercial freight tonnage rose 2.4%. Air travel was the exception, with passenger numbers down 7% in May and June. Because mobility held up while fuel use fell, the shift to electric vehicles, rail and public transport did the work. Higher fuel prices simply accelerated a trend already underway.
Electric heavy truck sales rose about 77% year on year in the quarter, and electric trucks took more than 45% of new sales. The EV fleet grew 33%, with 12.1 million vehicles added. Charging volumes jumped 60%, which suggests EVs already on the road were driven far more, helped by cheaper electric taxis. As a result, EVs avoided an estimated 19 million tonnes of oil in the quarter, up 50%. That took oil displaced by EVs to 36 million tonnes in the first half, more than the UK consumes in six months. Avoided emissions came to 35 MtCO2, or 1.3% of China’s second-quarter total.
Even so, the year-on-year rise in displaced oil explains only a third of the fall in consumption. The rest came from the stockpile swing, slower growth in chemicals and behavioural changes by consumers and businesses.
Coal power rose despite record clean capacity
Power was the sector with the largest increase in emissions. Coal use for generation grew 2.4% while gas-fired output fell 1.2%. That happened despite hydropower rising 9%, nuclear rising 2%, strong wind and solar additions, and demand growth slowing from 5.9% to 5.2%. Power-sector emissions rose 3.0% in the first half of 2026 after falling 3.2% a year earlier.
The cause was wasted wind and solar output, alongside unusually poor wind conditions. Neither the grid operating model nor the power market requires coal plants to run flexibly, and 30GW of new coal capacity came online in the first half, the most since 2016. Battery storage grew by 17GW to 153GW, although that was slower than the 23GW added in the same period of 2025.
Elsewhere, cement output fell 9% as construction shrank, crude steel fell 1% and pig iron fell 3%. Growth in coal use for chemicals slowed to 8%, from 15% in 2025 and 19% in the first quarter, because processing capacity was already running near full.
What the new five-year plans change
The quarter also brought a raft of sectoral five-year plans. They target electricity at 35% of final energy use by 2030, up from 30% in 2025, and EVs at 30% of the vehicle fleet, up from 12%. The power sector plan promotes direct purchases of clean electricity, microgrids and zero-carbon industrial parks.
Yet the same plan loosened the limits on curtailment, allowing some provinces to waste up to 15% of wind and solar output. The cap was 5% until 2024, when it was relaxed to 10% in well-resourced provinces. Ambition on coal has also softened. In 2021 President Xi Jinping promised to “gradually reduce” coal consumption over 2026 to 2030. The target now is for coal use to “enter a plateau”, and 204GW of coal capacity is still under construction.
The outlook nonetheless leans towards decline. China is on track to add enough non-fossil capacity this year to cover electricity demand growth of up to 5%, and the regulator projects 5% to 6%. Total energy demand is growing far more slowly than electricity demand. Myllyvirta describes the trend as “a race between energy demand growth and clean-energy growth, both of which have slowed down this year.” If that continues, total emissions could fall in 2026 even while power-sector emissions plateau.
