According to an analysis by the Center for Research on Energy and Clean Air (CREA) published by Carbon Brief, China’s CO2 emissions fell 3.1% in the third quarter of 2026, the fastest pace since the Covid-19 pandemic.

The war in the Middle East and the disruptions to maritime traffic in the Strait of Hormuz have severely affected oil supplies to China, the world’s second-largest economy and largest importer of crude. They’ve pushed prices up and have accelerated the emissions decline.

Oil consumption declined, transport oil consumption fell sharply, down 9% year on year in the third quarter of 2026, and electric vehicles continued to gain market share.

Renewables

Coal use also fell 3.3% year on year, despite China’s construction of new coal-fired power plants. “Maintaining a downward trend in coal-fired power generation is a key factor for the future development of renewables,” said Gao Yuhe, Beijing-based project manager at Greenpeace East Asia.

“At the same time, we need to see an increased adoption of renewable energy as well as the marketing of renewable energy and energy storage systems,” Yuhe added.

Meanwhile, structural changes in China’s energy and transport sectors were already underway. The country has seen tremendous growth in renewable energy capacity.

Solar, wind and nuclear generation provided 110 TWh more electricity than a year earlier, more than doubling the growth in electricity demand. At the same time, coal’s share of its energy mix has declined only slightly in recent years.

Hormuz crisis

The Hormuz crisis has certainly accelerated the shift toward electrification and away from oil. For the first time, new-energy vehicles (NEVs) made up 67% of new car sales in China in September, according to the latest data from the China Passenger Car Association (CPCA).

NEVs, including battery electric cars and plug-in hybrids, captured a record share of sales, even though fewer were sold than in the same month last year. EV electricity consumption increased 53% year-on-year, illustrating the rapid electrification of transport.

Sales of fuel-only cars fell 31% year-on-year in the first nine months of 2026, with plug-in hybrid sales down 26%, while battery EV sales fell only 4%.

In the United States, battery-electric vehicles represented only 6.4% of new-vehicle sales in Q3 2026, according to Cox Automotive. China’s electric transition is visibly reducing oil dependence on a scale the US has not yet matched.

China vs. US

Despite the encouraging trend, China still accounts for about 32% of worldwide fossil CO₂ emissions, compared with roughly 13% for the United States. The United States also remains the largest historical cumulative emitter, although China’s annual emissions are now more than double the US’s.

US emissions increased in 2025 partly because of higher electricity demand, greater coal-fired generation, and colder weather. However, the US Energy Information Administration forecasts that American energy-related CO₂ emissions will fall approximately 1.5% in 2026, equivalent to around 71 million tons.

US greenhouse gas emissions remain about 18% below their 2005 level, reflecting longer-term reductions in coal dependence, efficiency gains, and rising renewable generation.

Temporary decline or structural turning point?

Energy consumption growth has been falling after a period of exceptionally high growth during Covid-19, while clean-power growth has been robust. This makes it likely that clean-power generation growth will exceed total energy demand growth this year, maintaining the structural decline in fossil-fuel use.

Oil consumption is expected to rebound if prices fall, but China’s oil demand may already have peaked before the crisis. The key question is whether China’s current emissions decline represents a temporary consequence of the Middle East oil crisis or a structural turning point.

The Chinese authorities have pledged to step up efforts to reduce CO2 emissions and accelerate the energy transition to achieve carbon neutrality by 2060. The country’s current progress is significant, but its absolute emissions remain enormous.

China’s fossil-fuel dependence is beginning to weaken structurally, but coal, industrial activity, and a possible post-crisis oil rebound will determine whether emissions continue to fall.