Analysis: China’s quarterly CO2 falls 3% in largest drop since Covid

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 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 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.