China's CO2 emissions fell 1% in Q2 2026
China's carbon dioxide output declined by 1% in the second quarter of 2026, driven by a sharp 9% drop in oil consumption, according to an analysis by Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air.
China's carbon dioxide output fell by 1% in the second quarter of 2026. The decline was driven by a 9% overall drop in oil consumption, with transport fuel use plummeting by 16% amid supply disruptions from the Strait of Hormuz crisis, according to an analysis by Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. This is the first instance where reductions in oil consumption, rather than coal, have been responsible for a fall in China's overall carbon dioxide output.
Total carbon releases decreased despite a 2.4% rise in coal-fired power generation. The analysis, published on Carbon Brief, notes that structural shifts in transportation and changes in public behavior were key factors behind the oil demand collapse.
Oil use plummeted while coal grew
Within the overall emissions decline, trends diverged sharply by fuel. The largest fall in CO2 output came from petrol, diesel, and jet fuel. Crude oil processing volumes fell 11%, and China cut oil imports by 32% in the quarter. National Bureau of Statistics data indicates a large part of the import reduction was covered by drawing down the country's vast oil stockpiles, with the remainder due to genuine consumption cuts.
In contrast, the power sector saw the largest increase in carbon releases. Coal use for power grew 2.4% even as gas-fired generation fell 1.2%. This occurred despite strong growth in wind and solar capacity, a significant rebound in hydropower, a small increase in nuclear output, and a slowdown in electricity consumption growth. The report attributes the rise to increased "curtailment," or wasting, of solar and wind generation due to grid and market limitations.
In other sectors, cement production fell 9% in the second quarter, accelerating from an 8% drop in the first quarter, driven by declining construction. Crude steel output fell 1%, and pig-iron production fell 3%. Growth in coal use for chemical production slowed to 8% in the second quarter, down from 15% in 2025 and 19% in the first quarter of 2026.
What drove the fall in oil consumption?
The dramatic reduction in oil demand stems from both structural changes and the price shock of the Hormuz crisis. A significant contribution comes from the ongoing electrification of transport. Sinopec sales fell 9% in the first half of the year. Remarkably, transportation levels did not collapse. Cross-regional passenger trips were 0.1% higher year-on-year, urban passenger trips rose 2.9%, and commercial freight tonnage increased 2.4%. This indicates a shift to cleaner transportation modes, not a drop in mobility.
Electric vehicles and public transport became key factors. The total number of EVs on the road grew 33% year-on-year, with 12.1 million new EVs added. The impact on oil consumption was nearly twice as large as expected from the increased EV count alone, because usage of existing EVs surged. Charging volumes increased 60% in the quarter.
| Metric | Q2 2026 Change (year-on-year) |
|---|---|
| Total CO2 Output | -1% |
| Overall Oil Consumption | -9% |
| Transport Oil Use | -16% |
| Coal-fired Power Generation | +2.4% |
| Gas-fired Power Generation | -1.2% |
| Cement Production | -9% |
| Crude Steel Output | -1% |
| Pig-iron Production | -3% |
| Coal Use for Chemicals (Annual Growth) | +8% |
| EV Charging Volumes | +60% |
Electric heavy-truck sales rose about 77% year-on-year in the second quarter, with their market share exceeding 45% of all new truck sales in June. One factor enabling higher EV utilisation was the increased use of electric taxis, where intense competition pushed prices down.
Carbon output still flat
China's carbon dioxide output from fossil fuels and cement have now plateaued for over two years, following a peak in March 2024. After a 2% increase in the first quarter of 2026 and the 1% decline in the second, carbon releases are up marginally across the first half of the year but remain below their 2023-24 peak.
The government released numerous energy-related five-year plan documents in the quarter. These plans list new measures to address solar and wind curtailment and signal a higher bar for approving new coal-power plants, but add few new quantitative targets. Given structural pressures on oil demand, continued declines in real-estate construction, and slower growth for coal-chemicals, China's carbon dioxide output could still fall this year. The emission trend, the analyst concludes, remains a race between slowed energy demand growth and slowed clean-energy growth.
