For the first time, a decline in China's carbon dioxide emissions has been driven by a drop in oil consumption rather than coal, according to new analysis from the Centre for Research on Energy and Clean Air (CREA), published by Carbon Brief. In the second quarter of 2025, China's CO2 emissions fell by one per cent compared with the same period last year, with oil use down nine per cent overall and 16 per cent in transport.
The shift follows severe disruptions to shipping through the Strait of Hormuz, a chokepoint that previously carried about 20 per cent of the world's oil and gas. The US-Iran war has curbed crude deliveries to China, the world's largest importer, forcing a rapid adjustment in the country's energy habits.
Electrification as a strategic response
Lauri Myllyvirta, co-founder and lead analyst at CREA, said the crisis has "very clearly validated China's energy security strategy and especially the role of electrification as a part of that strategy." The disruption has accelerated the adoption of electric fleets in sectors that have traditionally relied heavily on diesel, such as construction and mining.
Electric heavy-truck sales rose by about 77 per cent year-on-year in the second quarter, while the number of electric vehicles on the road grew by 33 per cent. Charging volumes increased by 60 per cent, indicating that existing EVs are being used more intensively. Myllyvirta said these changes are "highly likely to prove sticky," suggesting that the shift to electricity may outlast the immediate crisis.
Previous reductions in China's emissions were primarily the result of lower coal consumption. This time, the oil-driven decline marks a new pattern, even as the power sector continues to lean on coal. Emissions from electricity generation rose between April and June due to increased coal use, while gas-fired generation fell, despite strong growth in wind and solar capacity.
China remains the world's largest emitter, responsible for over 30 per cent of global greenhouse gases. Its leaders have pledged to peak emissions before 2030 and achieve carbon neutrality by 2060. The second-quarter dip, however, only partially offsets a two per cent rise in the first quarter, leaving emissions "up marginally across the first half of the year," according to CREA.
Earlier this week, Chinese authorities reported that installed solar capacity has surpassed coal-fired power for the first time, a milestone in the country's renewable expansion. Yet the power sector's continued reliance on coal underscores the challenges ahead. As renewables alone may not suffice to cut emissions, China's experience offers a cautionary tale for other economies, including those in Europe, that are betting on clean energy to replace fossil fuels.
The European Union, which has been pressing China for concrete trade and climate commitments, will be watching closely. The bloc's own green transition depends in part on global supply chains and energy markets, and any lasting shift in Chinese oil demand could have ripple effects on prices and emissions worldwide.
For now, the question remains whether the oil-driven emissions drop is a temporary blip or the beginning of a structural change. The war-induced shock has forced China to accelerate its electrification push, but the underlying reliance on coal in power generation persists. As Myllyvirta noted, the crisis has provided a real-world test of China's energy strategy, and the results so far suggest that electrification can deliver both security and climate benefits.
However, the durability of these changes will depend on whether the shift to electric vehicles and machinery continues once oil imports normalise. If the war ends and shipping routes reopen, Chinese consumers and industries might revert to cheaper oil, undoing some of the gains. The coming quarters will reveal whether the crisis has permanently altered China's energy trajectory or merely provided a temporary reprieve.
