Analysis: China’s CO2 emissions have now been flat or falling for 18 months – Eco-Business

Report on China’s Energy Sector Transition and Sustainable Development Goals

Executive Summary

This report analyzes recent trends in China’s energy and industrial sectors, assessing their alignment with the United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). While China demonstrates record-breaking expansion in renewable energy capacity, significant challenges remain due to continued investment in fossil fuels and rapid growth in carbon-intensive industrial sectors. The nation’s ability to meet its climate commitments hinges on reconciling ambitious clean energy deployment with policies that curb emissions from coal power and the chemical industry.

Progress Towards SDG 7: Affordable and Clean Energy

Record Expansion of Renewable Energy Capacity

China has made substantial progress in advancing SDG 7 through an unprecedented expansion of its solar and wind power capacity. This growth is foundational to its strategy for climate action and sustainable infrastructure development (SDG 9).

• In the first nine months of 2025, China added 240 GW of solar and 61 GW of wind power capacity.
• Despite a slowdown in installation rates since May 2025, the country is on track for a record year, driven by the need to complete projects under the 14th five-year plan.
• As of early 2025, an additional 120 GW of wind and 123 GW of utility-scale solar capacity remain under construction, indicating a strong pipeline for continued growth.

Policy and Economic Drivers for Clean Energy

The policy landscape is evolving, creating both opportunities and uncertainties for the sustained growth required to meet SDG 7 and SDG 13.

1. A new pricing system, which requires renewable energy developers to secure contracts directly with buyers instead of relying on a guaranteed benchmark price, caused a rush to complete projects before May 2025. The long-term impact of this system on installation pace is not yet clear.
2. A significant gap exists between industry ambitions and government targets. Industry associations are targeting over 350 GW of new wind and solar capacity annually, while President Xi Jinping’s 2035 goal implies an average of only 200 GW per year.
3. Provincial-level implementation of national rules, particularly regarding minimum pricing and auction mechanisms, will be critical in determining the future rate of renewable energy deployment.

Challenges to SDG 13: Climate Action

Persistent Reliance on Fossil Fuels

Despite progress in renewables, China’s continued investment in fossil fuel infrastructure presents a major obstacle to achieving SDG 13.

• The construction of new coal and gas-fired power plants has accelerated, with 230 GW of coal-fired capacity currently under construction.
• The utilization rate of existing coal-fired power plants has fallen from a peak of 54% to 51% in the 12 months to September 2025. This trend suggests growing overcapacity, which could lead to stranded assets and undermine the financial viability of the clean energy transition.
• If all new coal capacity comes online without a corresponding increase in demand, the utilization rate could fall to 43%, potentially prompting a re-evaluation of the government’s pro-coal policy.

Trends in Oil Consumption and Industrial Emissions

Shifts in oil consumption highlight a complex dynamic, where progress in one sector is offset by emissions growth in another, challenging a holistic approach to SDG 13.

1. Transport oil consumption has declined, with a 4% fall in the year to September, driven by the rapid adoption of electric vehicles (EVs), which supports SDG 11 (Sustainable Cities and Communities).
2. However, this reduction was more than offset by an 8% rise in oil consumption from other sectors, primarily industrial demand.
3. This divergence indicates that decarbonizing transport alone is insufficient; comprehensive industrial policy is required to curb overall fossil fuel demand.

Industrial Activity and its Impact on SDG 12: Responsible Consumption and Production

Surge in Plastics and Chemical Production

Runaway growth in the chemical sector is driving up oil demand and creating significant challenges for SDG 12, which calls for sustainable consumption and production patterns.

• In the first three quarters of 2025, production of primary plastics grew by 12%, chemical fibres by 11%, and ethylene by 7%.
• This growth is fueled by government policies encouraging refineries to shift from transport fuels to chemicals, import substitution strategies, and rising domestic demand for packaging from e-commerce and food delivery services.
• The rapid increase in single-use plastics directly counteracts efforts to reduce waste and pollution, impacting SDG 14 (Life Below Water) and SDG 15 (Life on Land).

National Climate Policy and Alignment with Global Goals

Assessment of National Targets

China’s progress towards its national and international climate commitments remains mixed, with significant implications for global efforts under SDG 13 and SDG 17 (Partnerships for the Goals).

1. The 2025 carbon-intensity target (an 18% reduction from 2021 levels) will be missed, with achievement likely to be around 12%.
2. To meet its 2030 Paris Agreement pledge (a 65% carbon-intensity reduction from 2005 levels), China will need a far more ambitious reduction of 22-24% during the 15th five-year plan (2026-2030).

Future Emissions Trajectory

Policy signals regarding the timing and level of China’s peak emissions remain ambiguous, creating uncertainty for its long-term decarbonization pathway.

• The 2035 target to reduce emissions by 7-10% from an undefined “peak level” leaves open the possibility of emissions continuing to rise until just before 2030.
• This policy structure could create a perverse incentive for provinces to increase emissions in the short term, a phenomenon known as “storming the peak.”
• Achieving China’s stated climate goals will require clean energy growth rates well above the government’s announced minimums and a decisive policy shift away from promoting fossil fuel-based industrial expansion.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article extensively discusses China’s energy sector, focusing on the massive expansion of renewable energy sources like solar and wind power. It details the gigawatts of new capacity added and contrasts this with the use of fossil fuels like coal and gas, directly addressing the transition to cleaner energy systems.

• SDG 13: Climate Action

  This is a central theme of the article. It analyzes China’s CO2 emissions, its progress towards climate targets (such as peaking emissions before 2030), and its national policies like the five-year plans and Paris Agreement commitments. The entire discussion revolves around mitigating climate change.

• SDG 9: Industry, Innovation and Infrastructure

  The article touches upon the need to upgrade industrial infrastructure. It discusses the shift in the power sector towards renewables, the adoption of Electric Vehicles (EVs) impacting oil consumption, and the government’s encouragement for oil refineries to shift production from fuels to chemicals. This reflects the goal of making industries more sustainable and efficient.

• SDG 12: Responsible Consumption and Production

  The article highlights unsustainable production and consumption patterns, particularly in the chemical and plastics industry. It notes the “runaway growth” in the production of primary plastics, driven by booming online retail and food delivery services, which contributes to increased oil consumption and waste generation.

• SDG 8: Decent Work and Economic Growth

  The article connects economic activity with environmental impact, a key aspect of SDG 8. It specifically discusses China’s “carbon-intensity target,” which aims to reduce CO2 emissions per unit of GDP. This directly addresses the goal of decoupling economic growth from environmental degradation.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.

  The article provides concrete evidence of China’s efforts towards this target. It states that in the first nine months of 2025, China added “240GW of solar and 61GW of wind power capacity.” It also mentions President Xi Jinping’s announcement that China would “strive to bring the county’s installed solar and wind capacity to 3,600GW by 2035.”

• Target 13.2: Integrate climate change measures into national policies, strategies and planning.

  The article repeatedly refers to China’s national climate strategies. It mentions the “14th five-year plan,” the commitment to “peaking emissions ‘before 2030’,” the goal to “reduce coal consumption gradually during the 2026-30 period,” and the creation of a “‘dual control’ system for carbon intensity and total carbon emissions.”

• Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

  The article discusses the “rapid adoption of EVs” which has led to falling transport oil consumption. It also mentions the government has “encouraged oil refineries to shift from the production of transport fuels to chemicals” to adapt to changing demand, reflecting an industrial transition.

• Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.

  The article implies challenges to this target by highlighting massive growth in sectors that generate waste. It notes that “production of primary plastics grew 12 per cent,” driven by packaging for “booming online retail and food delivery industry.” While it mentions government measures “to curb single-use plastics,” the data shows that production and consumption are increasing rapidly.

• Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation.

  The article directly addresses this by analyzing China’s carbon intensity targets. It states that China’s goal for 2030 is a “65 per cent carbon-intensity reduction on 2005 levels.” It also notes that the target for the 2021-25 period will be missed, indicating the ongoing challenge of decoupling growth from emissions.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 7.2: Installed renewable energy generating capacity.

  The article provides specific, quantifiable data for this indicator. It mentions the addition of “240GW of solar and 61GW of wind power capacity” in nine months and a future target of “3,600GW by 2035.” These figures directly measure the growth of renewable energy capacity.

• Indicator for Target 13.2: Total greenhouse gas emissions per year and reduction targets.

  The article discusses the trajectory of China’s CO2 emissions, stating they have been on a “plateau or slow decline… that started in early 2024.” It also references specific national targets, such as “peaking emissions ‘before 2030′” and a new greenhouse gas emission target for 2035 set as a “reduction of 7-10 per cent below an undefined ‘peak level’.”

• Indicator for Target 8.4 & 9.4: CO2 emissions per unit of GDP (Carbon Intensity).

  The article explicitly uses this indicator. It refers to China’s “carbon-intensity target” and provides figures on its progress, stating that the 2021-25 target of an “18 per cent reduction” will be missed, with only “around 12 per cent” likely to be achieved. It also mentions the 2030 goal of a “65 per cent carbon-intensity reduction on 2005 levels.”

• Indicator for Target 12.5: National production of plastic and chemical products.

  The article provides data that can serve as an inverse indicator for waste reduction. It states that “production of primary plastics grew 12 per cent year-on-year,” “production of chemical fibres grew by 11 per cent,” and “Express parcel volumes grew… 17 per cent.” These metrics quantify the scale of production of materials that often become single-use waste.

4. Summary Table of SDGs, Targets, and Indicators

Source: eco-business.com