China’s renewables boom enters new phase as industrial transformation takes centre stage

Berlin & Beijing, 17 June 2026. China’s ability to deliver sustained emission reductions now depends on translating its rapid renewable energy expansion into industrial transformation, according to a new analysis by Agora Energy China and Agora Energiewende. The country’s energy transition is entering a new phase in which central priorities also include system integration and an absolute emission reduction trajectory. 

Released ahead of China’s 15^th Five-Year Plan (FYP, 2026-2030) for energy development, the data-driven analysis identifies ten major trends that shaped the country’s energy and industrial transition during the previous FYP period (2021-2025).

While revisions to China’s emission accounting methodology affect year-on-year comparisons, the broader trend suggests that the country’s emissions are plateauing. Reported data shows a mere 0.5 percent rise in 2025, while coal-fired power generation recorded its first decline since 2015 in the same year, despite continued growth in electricity demand. However, this apparent stabilisation reflects a structural shift as emission growth is increasingly concentrated in chemicals, non-ferrous metals and other heavy industries. 

“China has largely solved the challenge of scaling renewables. It is now essential to ensure that clean energy can transform industry, strengthen energy security and deliver durable emission cuts,” said Kevin Tu, Managing Director of Agora Energy China. “The 15^th FYP will be the first real test of this transition at scale.” 

Even if 2025 is assumed to mark the emission peak, China would still need to average annual emission reductions of at least 0.72 percent to stay on course for its updated Nationally Determined Contribution, the analysis shows. The findings underscore the increasing urgency of prioritising cross-sectoral decarbonisation.

Industrial transformation as the next frontier

Process emissions from steel, cement, chemicals and other heavy industries now account for around 14 percent of China’s total emissions. Priorities under the 15^th FYP include green steel, renewable hydrogen and other low-carbon industrial production, alongside the infrastructure required to support an increasingly electrified industrial economy. 

The analysis also notes the growing interdependence between industrial decarbonisation and power sector transformation. Technologies such as green hydrogen-based processes, electric heat and low-carbon materials depend on abundant renewable electricity and a highly integrated, flexible power system. 

“Industrial decarbonisation is becoming the next decisive frontier for China’s transition. Technologies such as renewable hydrogen, electric heat and low-carbon materials are moving from demonstration to deployment, but their success ultimately depends on access to abundant clean electricity and a more flexible power system,” Tu emphasised.

System integration key to reliable and secure energy

China’s wind and solar utilisation rates fell below 95 percent in 2025, the lowest of the 14^th FYP period. This development highlights growing system constraints as renewable capacity expands faster than grid flexibility and market integration. Meanwhile, many coal-producing regions are emerging as major renewable energy bases, creating both a strategic opportunity and a governance challenge: to transform traditional fossil energy hubs into integrated centres of clean power and low-carbon industry. 

System integration is also central to China’s energy security. Oil import dependence remains above 70 percent, while continued investment in coal-to-chemicals reflects persistent supply concerns. Rising electricity demand from electric vehicles, industrial electrification and AI-driven data centres adds further pressure on the power system, making power system flexibility ever more important for maintaining reliability while integrating larger shares of renewable energy. China’s “East Data, West Computing” strategy points to emerging solutions, co-locating digital infrastructure with renewable-rich regions to better align supply and demand.

“Energy security for China increasingly depends not just on fuel supply but on integrating its abundant domestic renewable energy into the wider system,” said Kevin Tu. “Accelerating grid and power market reform, strengthening demand-side response and enhancing cross-regional transmission can boost resilience against volatile global fossil fuel markets.” 

Governance shifts and the growing role of provinces

As clean energy deployment matures, policy attention in the 15^th FYP period is turning to emission outcomes, implementation and accountability, the authors note. Provincial governments play a greater role in delivery, reflecting wide regional differences in industrial structure, energy resources and economic priorities. 

While national indicators suggest stabilising emissions, several energy-intensive and coastal provinces continue to see emissions increase, including Shaanxi, a major coal-producing region where carbon emissions have more than doubled since 2010. This divergence underscores the need for stronger provincial-level carbon accounting, monitoring and enforcement to ensure alignment with national peaking (2030) and carbon neutrality (2060) targets. In the overarching 15^th FYP, energy intensity no longer serves as a headline target for the first time, reflecting a broader policy shift from managing energy inputs towards governing emission outcomes. Meanwhile, a new framework for assessing provincial governments’ progress towards carbon targets is expected to make emission performance a more important component of local policy evaluation.

International implications

China’s expansion of clean technologies in EVs, batteries, solar and wind has shown how decarbonisation can drive productivity, exports and new value creation. At the same time, the country’s scale of deployment and system experience is opening new doors for mutually beneficial international cooperation, particularly in areas such as grid expansion, ultra-high-voltage transmission and large-scale battery energy storage, the analysis finds. 

“China has established itself as a global leader in clean energy and electrification. Extending this success into heavy industry while retaining competitiveness and energy security will be critical both for China and for the global transition,” said Markus Steigenberger, Managing Director of Agora Think Tanks. 

The analysis China’s energy transition and climate status report 2026 draws on official energy and industrial data, supplemented by scientific literature and media sources. Where multiple datasets were available, cross-referencing was conducted to ensure robustness, with preference given to official statistics. The findings are presented in a 34-page slide deck, available for free download down below.

Notes on the data

Data for this analysis was compiled from publicly available sources, including the National Bureau of Statistics of China, National Energy Administration, National Development and Reform Commission, Ministry of Ecology and Environment, China Electricity Council, China National Petroleum Corporation Economic & Technology Research Institute, Sinopec, China National Coal Association, China Non-Ferrous Metals Industry Association, World Steel Association, World Cement Association, China Customs, International Energy Agency, International Renewable Energy Agency, Energy Institute, Global Energy Monitor, World Bank, International Monetary Fund, various industrial sources and media outlets. Figures are subject to periodic revisions by the above sources.

Carbon dioxide emissions estimates are based on the 2021 Guidelines for Formulating Provincial Action Plans for Carbon Dioxide Emissions Peaking issued by the Ministry of Ecology and Environment, using default emission factors published by the National Development and Reform Commission. Industrial process emissions are derived from a comprehensive update of a peer-reviewed 1990-2020 China industrial process emission inventory. Cement-related process emissions are further refined using China’s provincial process carbon emissions from cement production during 1993-2019.