• China’s CO2 emissions were flat year-on-year in Q3 2025, marking 18 months of stagnation or decline.
• Renewable power met nearly 90% of rising electricity demand, offsetting coal use.
• Growth in the chemical sector prevented a broader decline in total emissions.

Stability in China’s Carbon Output Extends Into 2025

China’s carbon dioxide emissions remained unchanged year-on-year in the third quarter, extending an 18-month period of flat or falling emissions, according to analysis by Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief.

The data indicate that the world’s largest emitter may be entering a new phase of structural decoupling between economic growth and carbon output. The trend, which began in March 2024, suggests overall CO2 emissions could fall in 2025—provided there is no sharp year-end rebound in energy demand.

The findings follow a 0.8% rise in emissions during 2024, largely attributed to post-pandemic economic recovery. With this year’s stability, analysts are now questioning whether China’s long-declared 2030 emissions cap could arrive sooner than expected.

Policy Commitments and International Positioning

Beijing reaffirmed in September its pledge to peak carbon emissions by 2030 and cut them by 7–10% by 2035 from that future peak. Though described as modest by global peers—the EU climate commissioner called the target “disappointing”—the move marked China’s first quantitative commitment to reducing emissions after the peak year.

The policy comes as geopolitical dynamics shift. With the U.S. scaling back climate diplomacy under President Donald Trump, China has sought to project itself as a stabilizing actor in global climate governance. Its position is expected to feature prominently at the U.N. COP30 climate summit in Brazil, now underway, where global negotiators are focusing on aligning national pathways with the Paris Agreement’s 1.5°C target.

Renewables Dominate Power Growth

Power-sector data from the third quarter show renewables carried much of the load in meeting China’s rising electricity demand. Total demand grew 6.1% year-on-year, but power-sector emissions were flat as wind, solar, hydro, and nuclear generation provided roughly 90% of that incremental demand.

Natural gas also edged up in the power mix, further cutting into coal’s share—a development consistent with China’s ongoing shift toward lower-carbon energy systems. Transport-related emissions fell 5%, driven by rapid adoption of electric vehicles and reduced fuel consumption.

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Industrial Growth Offsets Gains

Despite clean power gains, growth in the chemical sector continued to offset progress elsewhere. Plastic production expanded 12% year-on-year between January and September, buoyed by surging domestic demand for packaging materials linked to e-commerce and food delivery.

Beijing’s push to bolster domestic polyethylene production—partly a response to trade tensions with the United States—has intensified this effect. The government has also encouraged refineries to convert more output into chemical feedstocks, compensating for the structural decline in transport fuel demand amid the EV transition.

While this rebalancing supports industrial resilience, it raises concerns about the carbon intensity of China’s manufacturing base. Chemicals and petrochemicals now account for a growing share of emissions even as heavy industry and power generation decarbonize.

Implications for Global Climate Strategy

For global climate policymakers and investors, China’s 18-month plateau offers both optimism and caution. On one hand, the data highlight the scale of renewables deployment and energy efficiency gains achievable through centralized planning and state-backed investment. On the other, they underscore the complexity of sustaining national emissions reductions in an economy still anchored in high-carbon industrial sectors.

As COP30 negotiators assess progress toward global net-zero goals, China’s trajectory will remain pivotal. If the current trend continues into 2026, analysts suggest the country could reach its emissions peak earlier than the 2030 target—potentially altering global carbon forecasts and the pace of investment in clean technologies across Asia.

For investors, the picture is increasingly nuanced: stable emissions paired with rapid energy transition growth signal near-term policy continuity, but also ongoing volatility in industrial emissions. The next test will be whether China can translate this plateau into an enduring downward trend while maintaining economic momentum.

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