China’s carbon footprint starts shrinking despite economic growth 

For the first time, China’s CO2 emissions have fallen due to clean energy growth rather than an economic slowdown. In the first quarter of 2025, emissions declined 1.6% YoY, with power-sector emissions down 5.8%. The driving force was record additions of solar, wind and nuclear capacity that outpaced demand growth and curbed reliance on coal. The shift signals a potentially decisive moment in China’s climate trajectory. Yet, while momentum is building, long-term uncertainties remain – especially with a new renewable pricing regime and the looming question of whether China can meet its 2030 Paris climate goals. (Carbon Brief) 

Why does this matter? This may mark the beginning of a structural decoupling of economic growth from carbon emissions in the world’s largest emitter. For the global climate effort, it is a rare sign of hope that an industrial superpower can invest and innovate its way towards sustained emissions reductions. For commodity markets, the implications are also significant. Companies such as Rio Tinto could see strategic value for low-carbon enablers – aluminium, copper, lithium – that are central to the energy transition. The shift from fossil-driven growth to electrified expansion is both a disruption and an opportunity. 

The numbers tell the story. In March alone, China installed 23 GW of solar and 13 GW of wind – up 80% and 110% over previous records. Despite electricity demand rising 2.5%, coal-fired generation dropped 4.7%, as renewables and nuclear filled the gap. Efficiency gains also helped with coal use per unit of electricity falling nearly 1%. Outside the power sector, emissions ticked up 3.5%, driven by industrial activity, yet longer-term trends – such as a 28% decline in cement-related emissions and falling oil demand, suggest structural change is underway. While not yet a full decoupling, the shift in trajectory is clear. 

Underlying this shift is what the Financial Times has dubbed China’s “electricity revolution”. Launched under Xi Jinping’s directive in 2014, Beijing has poured hundreds of billions into electrification, clean technology and ultra-high-voltage grid infrastructure. Electricity now accounts for 30% of China’s energy mix – well ahead of the US and Europe. Clean energy sectors now make up 10% of GDP and a quarter of all growth. China leads globally in solar, wind, EVs and battery storage, positioning itself not just as a clean energy superpower, but as a geopolitical one, more resilient to supply shocks and trade disruptions. 

China’s dominance isn’t confined to its borders. Through state-backed finance and technology, Beijing is reshaping energy trajectories in emerging markets. In Azerbaijan, recent deals include a 100 MW floating solar plant, a 160 MW regular solar project and a 2 GW offshore wind farm. These projects will help Baku meet its 2030 targets and redirect gas exports to Europe. Further south in Zambia, the Xinjiang region is spearheading investment discussions following President Hichilema’s visit to Beijing. Amid severe load-shedding, Chinese-backed solar and wind infrastructure could stabilise the grid and drive economic growth. But in both regions, questions persist over technological dependence and geopolitical influence, especially as nations reassess their post-Russia alliances. 

As clean energy infrastructure spreads and Beijing exports its model of electrified development, the implications for global industry will only grow. China’s clean energy transformation is not just a domestic pivot – it is becoming a global realignment.