The world’s biggest polluter is cleaning up its act

By David Fickling

Start steering around an oil tanker, and you’ll find it slow, almost imperceptible work. When such a vast vessel begins to shift, however, the momentum is almost unstoppable.

It’s the same situation with the most important destination for the world’s LNG carriers, coal ships and oil tankers over the past few decades: China. The biggest consumer of carbon, and the source of a third of annual greenhouse emissions, is finally turning a corner to a cleaner future. China’s size is so overwhelming that when its fossil fuel consumption peaks, as it’s doing now, it will shift the direction of the whole planet.

Take oil demand. The country’s usage may have hit a ceiling already in 2023 before falling 1.2 per cent last year, the Energy Institute wrote last week in its Statistical Review, a huge annual compendium of data on power markets. That’s earlier than some other analysts have estimated, but not by much. The internal think tank of state-owned China National Petroleum Co. reckons the top will be this year.

The International Energy Agency sees decline setting in only after 2027, but points out that almost all the incremental growth since 2019 has been for petrochemicals — largely a matter of onshoring processing rather than adding fresh demand to the global market.

Coal is facing a similar moment. Production of pig iron and cement, which used to consume about a quarter of China’s total, is down around 18 per cent since 2020. Demand for solid fuel has only grown because of an immense increase in electricity consumption over the past five years. Between 2019 and 2024, power from China’s grid rose by nearly a third, equivalent to adding the generation of India, or Russia plus Japan. The country now consumes more electricity, per capita, than the European Union.

The headlong rollout of renewables is finally catching up with that. In December, the capacity of China’s wind and solar plants overtook that of its fossil fuel generators for the first time. Peak power from the 1.08 terawatts of solar installed at the end of May would be equivalent to that provided by a thousand nuclear reactors.

Coal production is still rising, but instead of getting consumed it’s all being added to a vast stockpile as cheaper clean power is used instead. January to May sales by the biggest miner, China Shenhua Energy Co., fell 12.3 per cent relative to the same period a year earlier, while generation by its own plants was down 10 per cent. The electricity produced by all fossil fuels in the first five months of this year was 3.1 per cent lower than the same period of 2024.

Much of this is the result of specific policies that have favored electric vehicles, high-speed rail and electricity-intensive manufacturing, causing oil consumption to slow more rapidly than expected while coal remained persistently high. But it’s also a sign that the long story of the nation’s development is reaching its endgame. China is now, to all intents and purposes, a high-income country, on the brink of overtaking the likes of European Union member Bulgaria in terms of economic output per person. That means the most energy-intensive phase of its growth is ending. So long as it keeps up the recent pace of renewables deployment there will be no more drivers left to keep emissions rising.

One pessimistic response to this is that China’s emissions won’t so much peak as hit an endless plateau. That’s certainly possible — but it goes against what we’ve seen in other industrialized countries on the same path in recent decades. US pollution fell by 10 per cent within five years of topping out in 2007, and is now about 22 per cent below that level. Japan is down by about the same amount since peaking in 2008. South Korea has fallen 13 per cent after hitting its maximum level in 2018.

Look at the pace of the clean energy rollout in China, and a rapid decline like we’re currently seeing in its oil use seems more plausible. Nearly 53 per cent of car sales in China this year came with a plug, and the EV industry has only just begun yet another brutal price war that's bringing the cost of electric vehicles well below that of their gasoline-powered competition. On a recent trip to Guangzhou, well over 80% of cars I saw on the streets had the green number plate and lack of a tailpipe that marked them out as plug-in vehicles.

At a time when the US Congress is trying to pass a law to subsidize fossil fuels and penalize clean energy, there’s reason to be downbeat about the prospects of the world hitting net zero. But about two-thirds of the increase in global emissions since the year 2000 has come from China alone. The endless rise in its carbon footprint has been a major rhetorical justification for richer countries trying to slow down their own energy transitions.

The tide is finally going out on that vast wave of pollution. The world will remember 2025 as the moment it turned a corner.