China's CO2 emissions fall by 1% in the second quarter of 2026 thanks to lower oil prices

China's CO2 emissions fell by 1% in the second quarter of 2026, driven by the sharp decline in oil consumption following the Strait of Hormuz crisis. It is the first time in China that a reduction in overall emissions is driven by oil rather than coal.

According to an analysis by the Center for Research on Energy and Clean Air (Crea) carried out for Carbon Brief, Chinese oil consumption fell by 9% overall in the quarter, with a 16% contraction in transport, after interruptions in supplies from the Persian Gulf.

However, behind the decline there is not only the Hormuz crisis. Electric vehicles and public transportation are structurally changing China's oil demand, allowing mobility to increase while fossil fuel consumption declines.

The impact of EVs was almost double what could have been predicted considering only the increase in the number of electric cars in circulation, thanks to the greater use of vehicles already on the roads. In the first half of 2026, oil replaced by EVs in China exceeded the entire oil consumption of the United Kingdom over a six-month period.

However, these structural factors, the analysis underlines, do not in themselves explain such a marked decline in oil consumption. Part of the contraction would therefore also be attributable to changes in consumer behavior triggered by the supply crisis.

The picture on coal is more contradictory. Electricity generation from this source has started to grow again, despite the increase in solar and wind capacity, strong hydroelectric production and the slowdown in electricity demand.

Curtailment, i.e. the limitation of the potential production of wind and photovoltaic energy due to network or system absorption problems, had an impact above all. Added to this are the strong expansion of coal-fired capacity and an electricity market that continues to favor this source, reducing the amount of fossil generation replaced by new renewables.

However, the use of coal in the chemical industry is slowing down: growth has fallen to 8% per year, from 15% in 2025 and from the 19% recorded in the first quarter.

Overall, after +2% in emissions in the first quarter and -1% in the second, the balance sheet for the first six months of 2026 remains slightly positive. However, Chinese emissions remain below the 2023-2024 peak.

China is also expected to install enough new wind, solar, nuclear and hydroelectric capacity this year to cover the surge in electricity demand. For Crea, also considering the structural weakness of oil demand, the real estate crisis and the slowdown of coal in chemistry, emissions could therefore still close 2026 in decline.