Rajan Wilcox
China, the world's largest consumer of energy and biggest emitter of greenhouse gases, has taken steps to reduce its fossil fuel consumption. In 2021, China invested $266 billion in energy transition measures, more than one-third of the global total. China has pledged to increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030 and has made significant progress in renewable energy, becoming the world's largest supplier of solar panels, wind turbines, and electric vehicles. However, China's fossil fuel demand is still growing, and it is facing challenges in rapidly reducing its dependence on coal, with a surge in permits for new coal-fired power plants. China's success in transitioning away from fossil fuels will have a significant impact on global efforts to tackle climate change.
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What You'll Learn
China's transition to renewable energy sources
Over the years, China has made notable strides in reducing its dependence on fossil fuels and transitioning to renewable energy sources. In 2021, China invested $266 billion in energy transition measures, accounting for more than one-third of the global total. This commitment to clean energy has been reflected in its pledges at international climate conferences. For instance, ahead of the 2021 UN Climate Change Conference in Glasgow, China vowed to "strictly limit" coal consumption, increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030, and significantly develop its wind and solar power capacity.
China has also become a global leader in renewable energy technology, supplying 80% of solar panels, 60% of wind turbines, and 75% of electric vehicles worldwide. This has positioned the country as a key player in driving the global energy transition. Additionally, China's first Energy Law, enacted in 2024, aims to promote the development and use of renewable energy, further emphasizing the country's commitment to transitioning away from fossil fuels.
However, China's transition to renewable energy sources has faced challenges and setbacks. Despite the growth in renewable capacity, China still generates about 70% of its electricity from fossil fuels, mainly due to the reliability and steady nature of coal-fired power plants. There has been a surge in permits for new coal-fired power plants, and the average growth rate of coal consumption has increased significantly in recent years. Additionally, China's gas consumption has increased fourfold between 2009 and 2022, with gas being considered a "clean energy" source due to its perceived contribution to improved air quality.
To fully transition away from fossil fuels, China must address its continued dependence on coal and gas, and ensure that its renewable energy infrastructure can meet the growing energy demands of its vast population and industries. While China has made significant progress in renewable energy adoption, the challenge of reducing its reliance on fossil fuels remains a critical aspect of its energy policy and climate commitments.
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China's coal consumption
China is the world's largest consumer of energy and the largest producer and consumer of coal. In 2024, coal accounted for approximately 59% of China's electricity generation. In 2021, official statistics put the figure at 56%, down from 57% in 2020, 64% in 2015, and over 70% in the mid-2000s.
In the first half of 2022, coal consumption decreased by approximately 2-3% year-over-year, according to preliminary estimates. This decrease was attributed to a slowdown in China's economic growth due to COVID lockdowns and other factors.
China has pledged to reduce its dependence on coal and increase the share of non-fossil fuels in its energy mix. In the Paris Agreement commitments submitted to the UN in 2021, Beijing vowed to strictly limit coal growth, control new coal power, and increase the share of non-fossil energy sources to 20% by 2025 and 25% by 2030. China has also emerged as the world's largest investor in the clean energy transition, investing $266 billion in energy transition measures in 2021, accounting for over one-third of the global total.
Despite these pledges and investments in renewable energy, China continues to approve and build new coal-fired power plants. In 2024, coal-fired power plants in China operated at an average utilisation rate of around 50%, indicating that these plants are primarily intended as backup rather than continuous baseload units. China's continued construction of coal plants has been driven by regional stimulus and the need for grid flexibility.
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China's oil and gas consumption
China's energy consumption has increased dramatically due to decades of rapid economic growth. China is now the world's largest consumer of energy and the largest producer and consumer of coal. China's industrial sector, particularly manufacturing, drives a large proportion of its energy demand. In 2019, manufacturing accounted for about 55% of China's total energy consumption, with 59.6% of the manufacturing sector's energy derived from coal.
China's dependence on coal has significantly contributed to air pollution and made it the world's biggest emitter of carbon dioxide and greenhouse gases. As of 2020, coal made up 56.8% of China's energy use, and in 2021, fossil fuels accounted for 70% of the country's electricity generation. However, China has also emerged as the world's largest investor in the clean energy transition. In 2021, China invested $266 billion in energy transition measures, accounting for more than one-third of the global total.
China has made commitments to reduce its dependence on fossil fuels and coal. In the Paris Agreement commitments submitted to the UN in 2021, China pledged to "strictly limit" coal growth, control new coal power, and increase the share of non-fossil energy sources to 20% by 2025 and 25% by 2030. China also aims to generate 50% of the increase in energy use from 2020 to 2025 from renewable sources. Additionally, China has invested heavily in renewable energy sources such as solar and wind power, with impressive growth in installed renewable capacity over the last two decades.
Despite these efforts, China is facing challenges in meeting its emission reduction targets. There has been a surge in permits for new coal-fired power plants, and the country's growing energy demand has outpaced the integration of renewable energy sources. China's suite of sectoral 14th Five-Year Plans includes mitigation measures for a post-coal transition, but absolute emissions for 2030 are projected to increase. China's climate policies have been rated as "Insufficient" or "Highly Insufficient" by the Climate Action Tracker.
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China's climate pledges
China's Pledges at the 2021 UN Climate Change Conference:
In the lead up to the 2021 UN Climate Change Conference in Glasgow, China made several pledges demonstrating its commitment to reducing fossil fuel consumption and mitigating climate change. These pledges included:
- Strictly limiting the increase in domestic coal consumption: China acknowledged the need to curb its reliance on coal, the dominant source of its energy mix.
- Increasing the share of non-fossil fuels: China aimed to increase the share of non-fossil fuels in primary energy consumption to around 25% by 2030.
- Scaling up renewable energy capacity: China pledged to bring its total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030.
- International cooperation: On the sidelines of the Glasgow summit, China and the United States signed a joint declaration, committing to various measures for cooperating on climate-related issues, including reducing methane gas emissions.
Progress and Challenges:
China has made significant strides in the renewable energy sector and is now a global leader in renewable energy investment. In 2021, China invested $266 billion in energy transition measures, accounting for more than one-third of the global total. This shift towards cleaner energy sources has resulted in a notable reduction in the share of fossil fuels in China's energy mix.
However, China still faces challenges in meeting its emission reduction targets. As the world's largest consumer of energy and the largest producer and consumer of coal, China's industrial sector accounts for a significant portion of its energy consumption and carbon emissions. Manufacturing, in particular, drives a large proportion of China's energy demand, with coal being the primary energy source.
China's 14th Five-Year Plan and Sectoral Mitigation Measures:
China's 14th Five-Year Plan outlines a range of sectoral mitigation measures to facilitate a post-coal transition. However, the plan has been insufficient in countering the growing energy demand and reducing dependence on fossil fuels. Absolute emissions projections for 2030 have increased, and China risks falling short of its carbon intensity reduction targets.
China's First Energy Law and Continued Efforts:
In November 2024, China issued its first Energy Law, prioritizing renewable energy development and usage over fossil fuels. Additionally, China launched its national Emissions Trading Scheme (ETS) in 2021, covering a significant portion of its CO2 emissions. While these initiatives demonstrate progress, China's impact on reducing CO2 emissions has been limited, partly due to the absence of a binding emissions cap.
China's 2035 NDC Pledge:
China has pledged to submit its 2035 NDC before COP30, covering all economic sectors and greenhouse gases. This commitment reaffirms China's dedication to climate action, despite global uncertainties and geopolitical tensions. China's role as a powerhouse in the global energy transition, supplying a significant portion of solar panels, wind turbines, and electric vehicles globally, underscores the importance of its climate pledges.
In summary, China's climate pledges reflect a recognition of the need to transition from fossil fuels to renewable energy sources. While progress has been made, challenges remain, particularly in curbing coal consumption and aligning emission reduction targets with economic growth. China's continued commitment to international cooperation and the implementation of sectoral mitigation measures will be crucial in the global fight against climate change.
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$220
China's energy law
- General provisions
- Energy planning
- Energy development and utilisation
- Energy market system
- Energy reserves and emergency response
- Energy science and technology innovation
- Supervision and management
- Legal liabilities/responsibilities
- Supplementary provisions
The law notably states that China will prioritise renewable energy development, including hydropower, wind energy, solar energy, biomass energy, geothermal energy, marine energy, and hydrogen energy. It also encourages a rational, clean, and efficient use of fossil fuels, aiming to increase the proportion of non-fossil energy consumption. This reflects China's growing emphasis on energy security and its commitment to reducing carbon emissions and increasing clean energy consumption by 2025.
However, China still faces challenges in reducing its dependence on fossil fuels, particularly coal, which accounted for 56.8% of its energy use in 2020. There has been a recent surge in permits for new coal-fired power plants, and China generates about 70% of its electricity from fossil fuels. To achieve its emission reduction targets, China must accelerate the integration of renewables and implement planned reforms to its national electricity system.
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Frequently asked questions
China has reduced its consumption of fossil fuels, but it still generates about 70% of its electricity from fossil fuels.
In 2022, fossil fuels accounted for 83.4% of China's primary energy consumption, down from 97.5% in 1978.
China has invested heavily in renewable energy sources such as solar and wind power, and has pledged to further reduce its dependence on fossil fuels.
China's rapidly growing energy demand and the continued construction of coal plants are challenges in reducing fossil fuel consumption.
China is the world's largest consumer of energy and the largest producer and consumer of coal. However, it is also the largest supplier of solar panels, wind turbines, and electric vehicles globally.
