By Mitchell Beer, Corporate Knights
New analysis found fossil fuels and cement emissions fell 3% in March, driven by expanding solar and wind generation, as well as declining construction activity.
China saw its carbon dioxide emissions from fossil fuels and cement fall 3% in March, 2024 after a 14-month run of increases, adding weight to projections that the country’s emissions may have peaked in 2023.
The analysis for Carbon Brief by Lauri Myllyvirta, senior fellow at the Asia Society Policy Institute and lead analyst at the Centre for Research on Energy and Clean Air, cites “official figures and commercial data” to call an end to the emissions increase that began when China reopened its economy after the COVID-19 pandemic.
January and February still saw “large increases” in year-over-year emissions from “the low base of 2023,” the analysis states, enough to produce a significant, 3.8% increase over the first three months of the year.
“The drivers of the CO2 drop in March 2024 were expanding solar and wind generation, which covered 90% of the growth in electricity demand, as well as declining construction activity,” Myllyvirta writes. “Oil demand growth also ground to a halt, indicating that the post-COVID rebound may have run its course.”
Last November, Myllyvirta projected that China’s CO2 emissions were poised to decline this year thanks to a surge of clean energy investments that exceeded targets. Six months later, “a 2023 peak in China’s CO2 emissions is possible if the buildout of clean energy sources is kept at the record levels seen last year,” he says. “However, there are divergent views across the industry and government on the outlook for clean energy growth. How this gap gets resolved is the key determinant of when China’s emissions will peak—if they have not done so already.”
The key factors in the CO2 decline include: Wind and solar pushing fossil fuels down from 67.4% in March, 2023 to 63.6% in March, 2024 as a share of China’s electricity generation, “despite strong growth in demand”; An 8% drop in steel production and 22% decline in cement due to a slower real estate sector; Electric vehicles now accounting for 10% of the country’s fleet and “knocking around 3.5 percentage points off the growth in petrol demand”; and 45% of last year’s solar growth coming from smaller, distributed energy systems.
“These trends seem set to continue, as real-estate investment continued to contract—for the third year—as a result of a government clampdown on excess leverage and financial risk in the sector, and sizable supply resulting from booming construction in the past,” Myllyvirta says.
Get the rest of Lauri Myllyvirta’s analysis here.