China's carbon emissions slip as oil use plummets in Q2
China's carbon dioxide emissions dropped by 1% in the second quarter of 2026, driven by a 9% fall in oil use amid the Strait of Hormuz crisis. Transport fuel demand fell 16%, with electric vehicles and public transport absorbing the impact. This marks the first time oil consumption, rather than coal, was the main factor behind an emissions decline.
The second-quarter decline marks the first time oil, rather than coal, drove a drop in China's overall emissions. Transport fuel demand fell 16% after Gulf supply disruptions, while electric vehicles and public transit absorbed much of the shock. Notably, EVs displaced more oil than their growing fleet numbers alone would suggest, as existing vehicles were driven more intensively.
Coal generation actually rose during the quarter, partly due to curtailment of wind and solar output and a power market still favoring coal. Growth in coal use for chemicals slowed sharply to 8% from 15% in 2025. Emissions have now plateaued for over two years, remaining below their March 2024 peak.
This shift could signal a structural turning point for global climate efforts, as China's oil demand becomes more responsive to transport electrification rather than economic growth alone. If sustained, falling oil consumption may ease pressure on global oil markets and reduce emissions from the world's largest polluter. However, continued coal growth from curtailment and new capacity could offset these gains, leaving the overall trajectory uncertain for communities and industries dependent on either fuel.