China’s carbon dioxide (CO2) emissions fell by 3.1% in the third quarter of 2026, as the Hormuz crisis continued to hit oil demand and coal use also dropped. This guest post is by: Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air This was the largest quarterly reduction since the 2022 Covid lockdowns and means that China’s CO2 emissions have now fallen by an estimated 0.5% in the year to date. The new analysis for Carbon Brief, based on official figures and commercial data, shows that coal use fell by 3% year-on-year in the third quarter of 2026, while oil was down 4%. The main drivers were a fall in power-sector coal consumption, a continued sharp reduction in transport oil consumption and slowing growth in the coal-to-chemical industry. The sharp decline in China’s CO2 emissions extends a ‘flat or falling’ trend that began in March 2024 and has now lasted more than two years, as shown in the figure below. Data sources as listed in previous iterations of this analysis. The outlook for China’s CO2 emissions depends on the balance between rising energy demand, clean-energy growth and the government response to a GDP slowdown. Decline drivers Key drivers of the fall in CO2 in the third quarter of 2026 included a 3.3% drop in coal-power generation, after demand growth slowed and the amount of ‘wasted’ wind and solar fell. Power generation from solar, wind and nuclear increased by 110 terawatt hours (TWh) year-on-year, more than twice as much as the growth in total electricity demand. This added clean-power generation equal to Germany’s total power output in the same time period. The fall in coal-power output and CO2 emissions came despite the fact that China continues to build new coal-power capacity at near-record rates. This means that average running hours for coal plants are falling even faster than total generation, eroding their profits. Meanwhile, transport oil consumption continued to fall sharply, down 9% year-on-year in the third quarter of 2026. Electric vehicles (EVs) continued to gain market share, hitting a record 67% of passenger car sales and 50% of heavy trucks in September. The amount of electricity used by EVs grew by 53%, much faster than the number of EVs on the road, showing increased usage of the existing fleet in preference to fuelled vehicles. Elsewhere, growth in the coal-to-chemical industry continued to slow down in the third quarter of 2026. The sector has been a key source of emissions growth, but high coal prices have weakened profitability and higher output prices hurt downstream demand. Finally, CO2 emissions from cement and steel production continued to fall in the third quarter, as the contraction in construction volumes accelerated. Outlook for emissions Energy consumption growth has been falling after a period of exceptionally high growth during Covid, while clean-power growth has been robust. This makes it likely that the growth in clean-power generation will exceed total energy demand growth this year, maintaining the structural fall in fossil-fuel use. Looking ahead, this balance also relies on progress in removing barriers to new solar and wind power being added to the grid, which result in some clean electricity being ‘wasted’. The recent slowdown in energy demand growth is partly – but not fully – explained by exceptionally mild weather in the third quarter. Another key factor is weaker GDP growth. Since reported GDP growth remains within target, however, there is reduced pressure for further stimulus policies. The focus of the economic stimulus announced to date is ‘six networks’, which includes the power grid and the transportation network. These networks are highly relevant for energy and emissions – and they are already covered by policies that emphasise ‘green’ and zero-carbon solutions. Interactive: Tracking negotiating texts at the COP31 climate summit 05.11.2026 COP31 Antalya Q&A: What is the Brazil-led ‘deforestation roadmap’? 04.11.2026 UN climate talks Q&A: What is in the global ‘roadmap’ for transitioning away from fossil fuels? 04.11.2026 International policy CB Live: Carbon Brief’s team at COP17 on the nature talks’ key outcomes 04.11.2026 COP17 Yerevan The post Analysis: China’s quarterly CO2 falls 3% in largest drop since Covid appeared first on Carbon Brief.