China’s carbon emissions will likely hit a new record in 2023 on the back of an economic rebound, but a rapid expansion in green energy will enable its emissions to peak soon, a global energy think tank said on Friday.
China, the world’s largest emitter of greenhouse gas, saw its carbon dioxide emissions rise 4% in the first quarter of this year compared to the same period in 2022, reaching more than 3 billion tonnes, according to a new report by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief. That’s the highest first-quarter number on record.
The increase was driven by an economic rebound after the end of China’s zero-Covid policy, economic stimulus measures and weak hydro generation due to an ongoing drought, the Helsinki-based think tank said.
“Looking at the rest of the year, the government’s focus on economic growth means that China’s emissions are likely to reach an all-time high in 2023, topping the previous peak in 2021,” said Lauri Myllyvirta and Qi Qin, analysts at CREA.
However, the emissions could peak soon, as China has accelerated its clean energy push and installed record amounts of solar and wind power capacity, the analysts pointed out.
“The rapid expansion in low-carbon energy, if sustained, could enable emissions to peak and enter structural decline, once the post-Covid recovery has played out,” they said.
China’s economy rebounded in the first quarter of 2023, with GDP growth accelerating to 4.5%, according to official statistics released last month. The government previously set a growth target of “around 5%” for 2023, although many investment banks have raised their forecasts to above 5.5%.
Coal production surge
The largest contributor to rising emissions was electricity generation. Power output from coal increased by 2% from a year ago, the report showed. Coal is the main source of energy in China and is widely used for heating, power generation and steelmaking.
The country has ramped up coal production since last summer when the worst heatwave and drought in decades hit hydroelectricity, the country’s second biggest source of power. Coal production surged 11% in 2022 from 2021, according to the National Bureau of Statistics.
To boost coal imports, China scrapped its restrictions on Australian coal earlier this year, effectively ending an unofficial ban that lasted for more than two years. In the first quarter, China’s total imports of coal soared 96% from a year earlier.
The second biggest reason for rising emissions was the higher production volumes of construction materials, mainly steel and cement, the CREA analysts said. That’s mainly because of government stimulus measures for the manufacturing and construction industries.
“Emissions are likely to grow this year,” the analysts said, as the government is pursuing a broad-based approach to economic recovery that seeks to boost exports, manufacturing output and construction, in addition to consumption.
This will lead to a sharp increase in bank lending and investment, particularly for manufacturing, transportation and energy production, they added.
However, China still sees clean energy as its future. President Xi Jinping restated his vision for a “green” and “beautiful” China in February and called for an energy revolution to achieve carbon neutrality in the longer term.
Solar installations increased to a record 34 gigawatts (GW) in the first three months of the year, nearly tripling the previous high of 13GW in the same period of 2022, according to latest figures released by the National Energy Administration.
New wind power installations also reached a record high. The 10.4GW added in the three months to March 2023 was an increase of 32% over the period in 2022, the NEA figures showed.
These sources of power, including renewables and nuclear, exceeded 50% of China’s installed power capacity in the first quarter, overtaking fossil fuel-based capacity for the first time in history, the CREA analysts said.
“When low-carbon power growth matches — and then exceeds — the annual increase in electricity demand, the sector’s CO2 emissions will peak,” they said.