Clean energy push begins to bend China’s emissions curve
China’s carbon emissions are showing early signs of levelling off, with a new report by Agora Energy China and Agora Energiewende pointing to the first decline directly linked to clean energy growth. Industrial transformation is picking up speed, led by electrification, though stronger policies such as carbon pricing and measures supporting circularity are essential to maintain momentum.
Berlin, 2 July 2025. In 2024, China’s carbon emissions increased by just 0.7 percent, which is a significant slowdown compared to the 4.5 percent rise in 2023, a new analysis by Agora Energy China and Agora Energiewende based on official energy and industry data finds. Meanwhile, carbon emissions from fuel combustion fell 1.2 percent year-on-year in the first quarter of 2025 – a drop for the first time directly linked to clean energy growth. At the same time, however, the widely reported 94.5 gigawatts of new coal projects in 2024 remains a core contradiction in the country’s energy strategy. This report comes at a critical moment: governments should submit their 2035 national climate pledges (NDCs) to the United Nations in September, ahead of COP30. In parallel, China is drafting its 15th Five-Year Plan (2026–2030), a key tool for aligning near-term actions with its dual carbon goals of peaking emissions before 2030 and achieving carbon neutrality by 2060. Meanwhile, another key global player, the European Union, is expected to start negotiations on its 2040 climate target, with implications for the bloc’s next NDC.
“As the world’s largest emitter and a global leader in renewable energy deployment, China plays a pivotal role in advancing global climate progress”, said Kevin Tu, Managing Director of Agora Energy China. “Building on its track record in clean energy development, a comprehensive, economy-wide climate commitment – covering all greenhouse gases – could enable China to peak emissions well before 2030 and realise a faster decline towards the country’s 2060 carbon-neutrality goal thereafter.”
China’s wind and solar capacity outpaces coal for the first time in 2024
Clean energy is already reshaping China’s power system. In 2024 alone, China installed a record 277 gigawatts of solar and 79 gigawatts of wind, reaching its 2030 renewables target six years early. Wind and solar account for 42 percent of China’s total installed power capacity, surpassing coal for the first time. China invested nearly USD 625 billion in clean energy in 2024 – over a third more than the EU. In the past ten years, the share of energy investment flowing into renewable power went up from 21 to 37 percent.
Furthermore, the Agora report finds that China was responsible for approximately 46 percent of global cumulative wind power capacity and nearly 50 percent of global total solar capacity, highlighting its central role in scaling up renewable energy.
Despite the record-breaking clean energy growth, however, thermal power still accounted for nearly 63 percent of China’s total electricity generation in 2024, with coal alone contributing 55 percent. Wind and solar combined generated 18.5 percent.
“Although wind and solar power are growing much faster than coal, they still play a supplemental role in meeting China’s electricity demand. This highlights the urgent need for decisive policy action – from improved grid integration of distributed renewables to power market institutional reform – to ensure that rapid renewable growth translates into a full-scale transition to a net-zero power sector”, Tu noted.
Industrial transformation accelerates but needs stronger policy support
As the largest consumer of both power and heat, China’s industry accounts for over 60 percent of the country’s fuel combustion emissions when indirect sources are included. This makes it a critical sector for electrification and low-emission heat solutions. The transformation is already underway: in 2024, China’s energy intensity fell by 3.5 percent, avoiding 130 million tonnes of CO₂, as companies expanded the use of clean technologies like electrification and green hydrogen. However, sustained coal chemical capacity expansion over the same period underscores the urgent need to cap growth in coal-based industries to stay on a low-carbon path.
The national carbon market’s expansion to steel, cement and aluminium supports the transition, but the ensued price drop and continued free allocation of allowances until 2027 limit the scheme’s effectiveness, the report finds. Stronger price signals and demand-side incentives are thus needed to unlock deeper cuts.
“Aligning industry production with renewable energy generation would help accelerate industrial transformation and clean power integration. To drive this forward, more ambitious policies that further circularity and increase demand for green products, supported by stronger carbon pricing, will be key”, said Tu.
Continued coal expansion underscores the need for robust just transition framework
The construction of 94.5 gigawatts of new coal power in 2024 is the highest since 2015 and went ahead despite underused existing plants. With over 80 percent of coal production concentrated in four provinces, these regions stand at the core of the coal-to-clean transition. Alongside halting new coal power approvals, implementing a robust just transition framework is vital. Such a framework supports workers and helps ensure decarbonisation is a driver of regional renewal, fostering job creation, infrastructure investment and economic diversification.
President Xi Jinping’s pledge at the April 2025 Leaders Summit on Climate and Just Transition to adopt a comprehensive 2035 climate target adds significant political momentum to China’s climate ambition. Combined with already-available clean technologies, the pledge provides a strong opportunity for China to make progress on its path to net zero. “By seizing this moment with coherent policy action, China can both accelerate its own transition and position itself as a credible climate solution provider on the global stage”, said Markus Steigenberger, Managing Director of the Agora Think Tanks.
The analysis entitled China’s energy transition and climate status report draws on official energy and industry data, supplemented by scientific literature and media articles. When multiple data sources were available, cross-referencing was conducted to ensure accuracy, with a preference for official sources whenever possible. The findings are presented in a slide deck.
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, China Electricity Council, CNPC Economic & Technology Research Institute, Sinopec, China National Coal Association, China Customs, International Energy Agency, International Renewable Energy Agency, Energy Institute, Global Energy Monitor, World Bank, International Monetary Fund and various media outlets. Figures are subject to periodic revisions by the above sources.
Fuel combustion CO2 emissions estimates are based on default emission factors published by the National Development and Reform Commission. Industrial process emissions are based on a comprehensive update of a peer-reviewed 1990-2000 China industrial process emissions inventory available at Nature.
