China, the world's largest CO₂ emitter, has made significant strides in renewable energy adoption, recently surpassing coal in its energy mix.
Despite its substantial carbon footprint, China's carbon budget under the Paris Agreement remains in surplus, positioning it to meet its 2030 emissions reduction targets with ease.
In contrast, the US and EU have already exceeded their emissions allowances, making it more challenging for them to meet the 1.5°C global temperature target by 2030.
To sustain its momentum, China has introduced several ambitious action plans aimed at further reducing carbon emissions and enhancing energy efficiency across various sectors. In June, the government launched the Coal Decarbonisation Retrofit Action Plan 2024-2027, which aims to cut emissions from "low carbon" coal plants by 50 percent by 2027. The plan includes co-firing with ammonia and biofuels, as well as deploying carbon capture technology. Energy analyst David Fishman noted that if successful, emissions from these plants could be reduced to levels comparable to those of gas plants.
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In May, China released the 2024-2025 Energy Efficiency and Carbon Reduction Action Plan, setting strict energy efficiency targets for energy-intensive industries. The plan requires these industries to source 20 percent of their energy from non-fossil fuels by 2025, with even higher targets for key sectors. For instance, the aluminium sector must reach 25 percent by 2025 and 30 percent by 2030, while data centres are expected to achieve 80 percent.
August saw the introduction of the Action Plan for Accelerating the Construction of a New Power System (2024-2027), which Fishman described as a "big one." This plan addresses nine critical challenges within China’s power system and proposes specific measures to overcome each issue.
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China is also rapidly advancing in nuclear and green technology, with plans to construct numerous new nuclear reactors. While the US plans to build only one new nuclear unit, and Europe only one in the UK, China has successfully tested the first nuclear fusion reactor that generates more power than it consumes, along with a meltdown-proof “pebble-tech” nuclear reactor.
US export controls on technology exports to China have inadvertently spurred innovation in China’s technology sector, according to a report from the Federal Reserve Bank of New York. These controls, intended to hinder China’s access to critical technology, have instead driven domestic advancements.
US export controls on technology exports to China have inadvertently spurred innovation in China’s technology sector, according to a report from the Federal Reserve Bank of New York. These controls, intended to hinder China’s access to critical technology, have instead driven domestic advancements.
To further tighten emission controls, the government released the Further Strengthening the Carbon Peaking Benchmark System Action Plan 2024-2025 in August. This plan sets emissions standards at an "international leading level" and enforces them on a project-by-project basis, particularly in heavy industry.
Additionally, China is focussing on improving its power distribution infrastructure through the Action Plan for the Development of a High-Quality Distribution Grid 2024-2027, which addresses key challenges identified in earlier policies.
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The sheer volume of recent policy announcements has been remarkable, with Fishman noting that "the policy section for this quarter's issue took twice as long to compile due to the significant number of major policies introduced in the last three months." Given these aggressive measures, early indicators suggest that China may have already peaked its carbon emissions, well ahead of its scheduled target, further solidifying its leadership in the global green transition.
