China’s carbon dioxide (CO2) emissions for the second quarter of 2023 eclipsed the 2021 record levels by 1%; however, the picture is complicated by COVID and weather events, while renewable energy capacity continues its meteoric rise.

China’s CO2 emissions rose by a staggering 10% year-on-year in the second financial quarter of 2023, according to analysis by the Centre for Research on Energy and Clean Air (CREA) carried out on behalf of Carbon Brief.

The increase saw emissions surpass the record levels of 2021 by around 1%. However, as is often the case with China’s emissions profile, the picture is far from black and white.

The analysis by CREA cites two main drivers of the sharp increase in emissions: this data set is in comparison to Q2 of 2022, when COVID-19 lockdowns were in force in Shanghai and across much of the country, and droughts, which have caused a drop of 22.9% in hydropower energy production for the first six months of 2023.

At the same time, the analysis shows that China’s renewable energy capacity has continued to rise at an impressive pace, with solar power installations completed in just six months equaling the total installed solar power capacity of Germany.

Meanwhile, the world’s second-largest economy grew just 0.8% in the second quarter. Such a sluggish economic recovery post COVID-19 has raised expectations that a slew of carbon-intensive infrastructure and real-estate stimulus measures from the government could be just around the corner.

Coal power and transport drive carbon rebound, while steel and cement flounder

According to the analysis, the two largest sources of year-on-year emissions increases in Q2 were coal-fired power generation (up 15%) and oil consumption (up 18%).

National crude steel output and cement output both increased by 1.3% in the first half of 2023. However, June saw steel production stagnate and cement output fall compared with the same month in 2022, likely in response to a slump in property sector investment during the first half of the year. These two industries are the largest emitters in China after power generation but have consequently not driven emissions growth so far in 2023.

Oil consumption growth, a reflection of transport trends, was driven predominantly by diesel, indicating that emissions increases have come from freight and public transport. Petrol growth, a gauge of private car and light vehicle transport, is growing too but remains below the pre-pandemic trendline.

A partial reason for the diminishing growth in petrol consumption can be put down to the formidable growth in electric vehicle (EV) sales. 28% of all vehicles sold in the first half of 2023 were electric, up from 22% in 2022 and just 4% in 2020. The analysis estimates that EV adoption has shaved 3% off petrol demand growth.

The energy picture

Extreme weather events have gripped China this year. At the start of this month, flooding in the northeastern province of Hebei forced more than a million people from their homes, as the remnants of Typhoon Doksuri swept through the region. Despite this, extreme heat and flooding have caused the surge in energy related emissions.

Hydropower output has collapsed as a result of drought at the back end of 2022 and low levels of rainfall in the first half of this year, forcing a switch to coal-fired power. Meanwhile, demand has increased as the population has turned to air conditioning in the face of extreme heat. In fact, sales of air conditioning saw a 41.9% year-on-year increase for the first six months of 2023.

But while coal is an easy short-term fix, the trend towards renewable energy sources remains promising. In the first half of 2023, solar and wind installations increased by 154% and 78%, respectively, equivalent to 78 and 23 gigawatts (GW).

China also added 1.2 GW of nuclear and 5 GW of hydropower to its arsenal.

These additions to the grid mean that China should, in theory, be able to cover energy demand growth of 4% per year — equivalent to 380 TWh, or 1.5 times the total consumption of the UK — through low-carbon sources alone. Not bad, considering demand grew at a rate of 5% in the first half of the year.

It’s somewhat perplexing, then, that the rush to build new coal power plants is continuing. In the year to July, 50.4 GW of new coal power was approved across China, according to research from Greenpeace East Asia, roughly equivalent to two coal power plants per week.

“Continued coal deployment impedes the development of energy storage [for renewables] because they have virtually no supplementary application to one another,” said Gao Yuhe, a Beijing-based project leader with Greenpeace East Asia. “Energy storage enables flexible electric grids that coordinate frequent changes in the direction of electricity transmission among multiple electricity generation sources. Coal plants, on the other hand, take a long time to power up and cool down. They do not switch on or off efficiently in terms of emissions or costs.

“Coal plants engender an inflexible, unidirectional grid management where the coal plant remains on, even if demand momentarily dips. So long as provinces rely on coal, the application of energy storage is curtailed. This is a risk because China’s energy transition and the application of renewable energy at scale will require comprehensive development of energy storage.”

Many of these projects won’t be completed until the 15th five-year plan period (2026 – 2030), when China has committed to decreasing the use of coal. Unless approved projects are cancelled or the retirement of old ones speeds up significantly, the coal capacity in China will almost certainly increase during this period of supposed phasing down.

As ever, China remains a land of contradictions. Emissions are rising, as is the use of net zero-incompatible coal, but the growth in EV sales and renewable energy capacity is also happening on scales incomparable to anywhere else on the planet.

According to Climate Action Tracker, China’s emissions are expected to peak in 2025. The world will be watching closely over the coming financial quarters to see whether or not this materialises.