China Energy and Emissions Trends – July 2026 snapshot

CO2 emissions dropped in July 2026, primarily due to a 3.5% decrease in combined coal and gas power generation, alongside declines in coal, cement, and crude steel output. Coal power generation fell for the first time this year, marking a shift after six consecutive months of growth. Power generation from coal and gas remains up 2% year-to-date, but this is attributed to poor wind conditions, increased curtailment of wind and solar, and rapid power demand growth in the first half of 2026. In the first six months of 2026, China added more wind capacity than in any full calendar year before 2025, with June alone seeing a record 13.6 GW of wind capacity added. Solar capacity additions remain depressed compared to 2025’s high baseline, due to policy-driven rush to meet price-support frameworks. Coal imports grew by 20% year-on-year in July, while crude oil imports fell by nearly 25% year-on-year, reaching a nine-year low, reflecting disruptions in the Strait of Hormuz. New energy vehicles (NEVs) accounted for over 60% of domestic vehicle sales for the first time, with over 1.5 million NEVs sold in July alone. NEV exports also exceeded 50% of all vehicle exports for the second consecutive month. Coal generation fell for the first time in 2026, with a 2.5% year-on-year decline after six consecutive months of growth. Gas power generation dropped by 13.9%, though its limited role in China’s power mix mitigated its impact on overall electricity generation. Solar generation rose by 10.4%, while wind generation fell by 4.5% due to poor conditions. Hydropower and nuclear power saw growth of 7% and 6.7%, respectively. Coal output fell 10.1% year-on-year in July, marking a full year without year-on-year growth. Crude steel output declined by 3.6%, and cement output fell by 11.6%, reflecting declines in China’s real estate sector. Pig iron production also dropped by 4.5%, while sulfuric acid output fell due to Strait of Hormuz disruptions. Tangshan blast furnace activity remained active, with utilization rates at multi-year highs, indicating ongoing steel production challenges. China’s energy system continues to adapt to the Strait of Hormuz crisis, with crude oil imports falling sharply. Despite these challenges, clean energy investments remain robust, with new wind and solar capacity installations leading in key provinces like Jiangsu, Henan, Yunnan, and Sichuan. Solar cell production declined but remained significantly higher than 2024 levels, while battery production surged by 45.5% year-on-year, driven by strong demand for energy storage and exports.