Analysis: China’s CO2 emissions in Q2 2023 rebound to 2021’s record levels

By Lauri Myllyvirta, Lead Analyst, CREA; and Qi Qin, China Analyst, CREA

China’s carbon dioxide (CO2) emissions grew 10% year-on-year in the first quarter of 2023, rising approximately 1% above the record levels seen in 2021.

The new analysis by CREA for Carbon Brief, based on official figures and commercial data, shows the increase was driven by two factors.

First, the comparison is being made with the second quarter of 2022, when emissions were still suppressed due to the Covid lockdowns which had shut down Shanghai and much of the country.

Second, the ongoing drought has seen a plunge in the output of China’s large hydropower fleet.

Without these one-off factors, China’s emissions would likely now have stabilised.

Looking ahead, China’s economic recovery after the lifting of Covid controls has been sluggish, raising expectations of a new round of carbon-intensive stimulus measures.

China is also continuing a surge in coal power construction that started last summer, with investments in coal-based steel capacity continuing at a high rate. Much of this will be completed in the “15th five-year plan” period (2026-2030), when China has pledged to reduce the consumption of coal.

On the other hand, investment in low-carbon energy continues to grow at a staggering pace. If low-carbon capacity growth meets forecasts, it would be sufficient to cover expected electricity demand growth and could even put China on track to peak its emissions within two years.

Overall, the latest quarterly analysis shows:

  • Emissions rebounded forcefully from the Covid lockdown lows of 2022, rising slightly above the record levels of 2021.
  • The rebound in emissions was driven by major increases in coal-fired power and transportation.
  • The increase in coal-fired power is due to weather-related factors. Without this weather variation, coal-fired power generation would remain below its peak.
  • Low-carbon energy additions have reached the level where they can now cover all of the expected growth in electricity demand, if maintained.
  • China’s sluggish economic recovery from the “zero-Covid” period has built up expectations of government stimulus for carbon-intensive sectors.
  • The push for new coal power and steel plants continues.
  • The rapidly rising use of electric vehicles is, for the first time, substantially curbing petrol demand growth.

Read the full article on Carbon Brief.