China’s Wildly Complex Energy Transition, Explained in 8 Charts
The world’s biggest polluter is also the world’s top generator of renewable energy.
Ahead of President Biden’s meeting with Chinese President Xi Jinping in San Francisco on Wednesday, the U.S. and China released a joint statement that represents a breakthrough in the two countries’ climate change negotiations. Most notably, the Asian superpower has finally agreed to set concrete targets to reduce emissions across its economy.
The statement asserts that the U.S. and China will work together and with other parties at the upcoming United Nations climate summit in Abu Dhabi, known as COP28, to “rise up to one of the greatest challenges of our time for present and future generations of humankind.”
Underlying the summit is a stark reality: The world will not be able to limit global warming to internationally agreed-upon levels if China, the world’s largest producer of greenhouse gases, does not increase its ambition. The country is now responsible for about a third of annual global carbon emissions. China’s combustion of coal alone accounts for 25% of all energy-related emissions in the world.
Yet China is also the world’s top generator of renewable energy and the foremost manufacturer of much of the technology undergirding the transition. Come with me on a tour of the complex, contradictory state of China’s energy transition in eight eye-popping charts.
China’s climate pledges to date have been vague. The country has said its carbon emissions will peak before 2030, for instance, but has not set a firm target for when or at what level — and the target does not apply to other planet-warming gases like methane. But according to an analysis by Climate Action Tracker, under current policies, China’s annual emissions will peak around 2025 and then plateau for the rest of the decade. That’s primarily due to a projection that the country will continue to rely heavily on fossil fuels as its total energy demand grows. But as we’ll see, this is also one of the key uncertainties around China’s transition.
The biggest source of emissions in China is the power sector. More than 60% of its electricity generation came from coal-fired power plants last year. At COP26 in Glasgow, China said it would “phase down coal consumption” beginning in 2026, but unlike the U.S., which hasn’t built a large coal plant in 10 years, China is growing its coal fleet. Last year, the country greenlit the construction of two new coal plants per week on average, according to Global Energy Monitor, and the trend continued into 2023.
China’s coal permitting spree is the result of rising anxieties among leadership over energy security in light of the COVID-19 pandemic, war in Ukraine, and now the Israel-Hamas war, Kevin Tu, a non-resident fellow at Columbia’s Center on Global Energy Policy, told me. He said China “undoubtedly” overemphasized security in its energy decision-making and that these plants were at risk of becoming stranded assets.
But as Cornell University professor and Heatmap contributor Jeremy Wallace wrote earlier this year, China’s coal plants haven’t even been running at full capacity, and are “shifting to a role of backing-up renewables.” The International Energy Agency predicted last month that China will “gradually use its coal-fired power more to provide flexibility and less to deliver bulk energy.”
China may also begin trying to capture the carbon emitted from its coal plants, with the help of the U.S. One of the points of agreement reached this week was an aim to “advance at least 5 large-scale cooperative [carbon capture, utilization, and storage] projects each by 2030.”
Even though China is building coal plants like there’s no tomorrow, the proportion of its overall energy consumption coming from fossil fuels is actually dropping quite rapidly — at a much faster rate than in the U.S. The country has reduced fossil fuels to about 82% of its energy mix, and plans to get no more than 75% of its energy from fossil fuels by 2030.
The analysis by Climate Action Tracker shows China “significantly overachieving” that goal, primarily because the country is building wind and solar farms at a truly wild pace.
China will build more solar generation this year than the U.S. has built, period. The country’s 2023 additions of low-carbon resources — solar, wind, nuclear, and hydroelectric — are enough to meet the annual electricity needs of the entire United Kingdom.
Critics of China’s climate commitments look at the country’s unbelievably fast progress on renewables and argue it could easily raise its ambition. The country will most certainly exceed the 1,200 gigawatts of wind and solar it has outlined in its current policy plans.
China is even doing what has become impossible in much of the Western world and growing its nuclear fleet. “This will be the largest expansion of nuclear capacity in history, by far,” Jacopo Buongiorno, a professor of nuclear science and engineering at MIT, told CNBC recently.
China has already won the race when it comes to manufacturing clean technologies. Even though the U.S. is pouring billions of dollars into building up its own manufacturing capacity, it’s hard to imagine we’ll ever put a real dent in China’s market dominance for lithium-ion battery and solar module production.
It’s much more likely that the U.S. and other developed countries will continue to rely heavily on China for their own energy transitions. Earlier this year, Group of Seven leaders admitted as much when they described their approach to relations with China as “derisking, not decoupling.”
China’s manufacturing prowess could also benefit a far wider swath of the globe. “China has an opportunity to leverage such capabilities to facilitate deploying clean energy globally,” said Gang He, an assistant professor of energy and climate policy at Baruch College, in an email. “Especially in the world's least developed and most vulnerable countries.”
That’s not happening yet. In September 2021, China committed to ending its overseas financing of coal-fired power plants and to support renewable energy development abroad. But while its coal finance came to an abrupt halt, its investment in wind and solar has not gone up accordingly, according to the World Resources Institute.
But in the new joint statement with the U.S., China agreed to “pursue efforts to triple renewable energy capacity globally by 2030” in addition to accelerating the “substitution” of renewables for fossil fuels in their own countries.
How to make sense of all of this?
Earlier this week, CarbonBrief had quite an optimistic take on the data. It found that China’s rate of low-carbon energy expansion is on track to outpace the annual increase in electricity demand — telling a different story than Climate Action Tracker projected about that first key uncertainty I mentioned. This could push emissions “into an extended period of structural decline,” the authors wrote. But it all depends on whether wind and solar interests can overcome China’s powerful coal lobby.
“What China really needs is to conduct some serious institutional reform to make its power system more friendly toward renewables,” Tu told me. “The problem in China is that the coal interest group makes such reform very difficult.”