Facts v. opinions: understanding China’s climate performance amid a polarised debate

China is frequently labelled as both a climate leader and a climate laggard. Cutting through the noise, Mathias Larsen argues that it is critical to recognise that China’s emissions may already have peaked and could fall rapidly, despite continued investments in coal.

When considering the facts of China’s climate performance, it is perhaps no surprise that opinions diverge. The country’s record-breaking development of green industries and equally record-breaking greenhouse gas emissions are well known and with good reason. For example, China dominates all key green industries and installs more renewables annually than the rest of the world combined. Simultaneously, China burns more than half of the world’s coal and is home to 90% of additional emissions since the landmark 2015 climate change summit in Paris, COP21.

Some researchers emphasise the country’s green credentials: for example, Jeffrey Sachs argues that “China is undertaking a rapid transformation in energy structure” and “making the transformation possible around the globe”. At the other end of the opinion spectrum, US President Trump has said, “It costs much more to do things environmentally clean. China doesn’t do anything.”

If looking only at either the clean or emissions-intensive side of China’s economy, one might indeed conclude that China is either a climate saviour or sinner. Added to that, broader political opinions on China are perhaps even more polarised, leading many to view China’s climate performance through pre-existing political opinions. Of course, while there might be clear reasons for this polarisation, this is not a fact-based way of comprehensively understanding China’s climate performance.

The question of whether King Coal is being dethroned

The dynamics of China’s coal consumption are both a source of and a solution to the polarised debate. Most fundamentally, coal accounts for 79% of China’s emissions. Roughly two-thirds of coal consumption is in power generation, with the remaining third being industry, such as steel, cement and fertiliser. Simultaneously, the dynamics within the coal industry are arguably some of the most misunderstood in the discourse on China’s climate performance. Consequently, they are a central piece in the currently polarised debate.

Dissecting the latest statistics provides the nuance needed for a clear picture. The key is to be able to accurately capture coal capacity and coal consumption and then be able to distinguish between the two.

On the capacity side, China continues to invest in new coal-fired power plants. In 2024, China started the construction of 95GW of new coal power capacity, and another 100GW is already in the pipeline.

On the consumption side, according to China’s National Bureau of Statistics, volumes fell during the first four months of 2025 compared with the same period last year, and were higher than in 2024 over the second quarter, leaving the total unchanged between 2024 and 2025. In combination, increasing capacity and stable consumption imply a lower utilisation rate (the proportion of the capacity actually used). The rate has indeed fallen from around 70% two decades ago to 40% today. Looking forward, it is the official policy of the Chinese government to further reduce the utilisation rate until coal merely ‘supports’ renewables by responding to fluctuations in supply and demand.

Within industrial usage, coal consumption is stagnant, as usage for steel and cement has fallen alongside the slump in the real estate sector. On the other hand, coal consumption for petrochemicals has increased.

Analysing the same data, leading researchers and non-governmental organisations have recently made several related findings:  

• According to a new report by Greenpeace East Asia, China is in a position to peak its coal power emissions in 2025, which will entail almost RMB 1 trillion in savings in the long term.
• Researchers at the Centre for Research on Energy and Clean Air argue that while China is scaling up coal capacity, the utilisation rate has been falling. As that is likely to continue, overall coal consumption may have peaked.
• Ember’s China Energy Transition Review finds that China’s emission peak is in sight and that rapid electrification means that fossil fuel consumption is poised to start falling.
• Data scientist Hannah Ritchie finds that “China’s emissions are now falling. I don’t want to be the one who calls ‘this is the peak’, but I think there is a chance China’s peak emissions are coming very, very soon.” 

These researchers all agree that while China is unquestionably scaling up coal capacity, this does not necessarily entail increasing coal consumption and, hence, higher emissions. From both the primary data and other researchers’ assessments, a clearer picture emerges. The important nuance that the statistics show is that coal reflects both the negative and positive sides of China’s climate performance: while increasing coal capacity suggests carbon lock-in, the decreasing utilisation rate indicates that renewables are outcompeting even new coal plants.

The nuance needed for an informed opinion

How should these dynamics around coal consumption inform opinions about China’s climate performance? The keyword here is uncertainty: the dynamics reflect the uncertainty around how China’s emissions will evolve over the next decade. The fundamental situation is that renewables increasingly meet the entire increase in energy demand. In 2024, 84% of China’s energy demand increase was met by renewables, while this reached 102% in the first half of 2025, consequently reducing fossil fuel consumption. This is a key reason why coal consumption has fluctuated at around the same level for a decade. Specifically, emissions from coal consumption only increased by 8% between 2013 and 2022, while the size of China’s economy doubled over the same period.

Looking into the future, based on this situation, two dynamics are central. First, if renewables installation continues at the present or higher pace while the pace of the increase in energy demand stays around the past decade’s average of 5%, then renewables will begin to rapidly cut into coal consumption. This seems likely, as renewables installation has continuously broken records year after year, and the China Electricity Council and State Grid expect this to continue in 2025, in spite of recent pricing reforms that some believed would slow down installations.

Second, suppose prices of renewables and battery storage continue to fall. This has indeed been the case in recent years, in part, due to China’s rapid scale-up of manufacturing capacity, fierce industrial competition, and technological progress. In that case, their combined costs become cheaper than the marginal cost of burning coal in an existing coal plant, also leading to a rapid reduction in coal consumption. These two dynamics are uncertain, but entirely possible. If they do not happen, China might experience a peak and then a long stagnation in emissions. With 31% of global carbon dioxide emissions coming from fossil fuels in 2022, this is incompatible with the Paris Agreement.

Tying these points back to the concern about how to understand China’s climate performance, the uncertainty, by its nature, suggests that China could be on the verge of either a plateau or a rapid decline in emissions. Grasping how to understand likely future trends should be a central research topic when investigating China’s green transition.

I cannot provide here a clear answer to the question of whether China is a climate leader or a laggard – but really, that is not the right question to ask in the first place. I do aim, however, to have provided at least part of the nuance needed to hold an informed opinion on the topic. From this, it follows that an informed opinion cannot be at either end of the currently polarised spectrum. Rather, such an opinion needs to put uncertainty at its core.

This article was first published by the LSE Business Review.