China's emissions fall because of declining oil use

 From Gavin Mooney

China’s emissions fell again in Q2, but for the first time it was falling oil use that drove them down.

That matters because until now China’s emissions story has tended to be a coal story.

According to Lauri Myllyvirta’s latest analysis for Carbon Brief, China’s CO₂ emissions fell 1% year-on-year in Q2 2026. When emissions have fallen previously, lower coal consumption was the main driver. This time, it was oil doing the work.

Oil use fell 9% overall and 16% in transport amid the Strait of Hormuz crisis.

But this is also not just a temporary shock. Transport activity was broadly stable or still growing, which means the fall in fuel use was enabled by structural changes already underway.

A few things are happening at once:

✅ EVs are now displacing enough oil to matter at national scale
✅ Existing EVs were used more, with charging volumes up 60% in Q2
✅ Rail, metro systems and electric trucks are reducing demand for petrol and diesel

The less rosy part is coal.

Coal use in the power sector still rose 2.4%, partly because more wind and solar output was curtailed due to grid and market constraints. Recent five-year plan documents include measures to improve clean-power utilisation, but this remains one of the key bottlenecks.

So this is not yet a clean “China’s emissions have peaked” moment.

It is more nuanced than that. China’s emissions have really been on a plateau since early 2024, with small moves up and down.

What is significant is that the pressure is now coming from more than one direction.

Until recently, the key question was whether clean electricity could reduce coal use fast enough to bring emissions down. Now oil demand is starting to pull in the same direction.

If coal and oil eventually start falling together, China’s emissions plateau could become a much clearer decline.

Read the Carbon Brief article here.