China can meet most 2025 climate targets, except carbon intensity goal: report

China is on track to meet most of its climate-related targets set under the 14th five-year plan, but meeting the carbon intensity reduction goal of 18% from the 2020 level remains challenging, a recent report by S&P Global Commodity Insights showed(opens in a new tab).

The five-year plan is one of the most important policy documents in China as it sets the overarching guidance and targets for the country's economic development and energy transition. During the 14th FYP period (2021-2025), the Chinese economy experienced various challenges. Hence, the international community has been closely watching whether the world's largest greenhouse gas emitter can still meet its climate targets due in 2025.

During this five-year period, China's emissions reduction progress was interrupted by rigorous COVID-19 controls during the first two years. The drought in 2022 led to severely underperformed hydropower and a surge in coal-fired power consumption. Most recently, the US-China tariff dispute has made China's 2025 GDP growth shrouded in uncertainty.

Among all the FYP targets, the two most challenging ones are associated with GDP, the Commodity Insights report said.

The 18% reduction in carbon intensity, namely CO2-equivalent emissions per unit of GDP, seems challenging as China has only managed to reduce its carbon intensity by 7.8% in 2021-2024, the report showed.

"This shortfall indicates that even doubling government efforts over the past four years may not suffice to meet the target," according to the report.

Despite the significant gap, the report noted that China managed to achieve a 3.4% reduction in energy intensity year on year in 2024, much improved from the annual reductions in 2021-2023. The key drivers were expedited electrification, the power sector's decarbonization, and curtailed cement, steel and non-ferrous metals production amid the property sector's turmoil.

Energy intensity controversies

China aimed at reducing its energy intensity, namely energy consumption per unit of GDP, by 13.5% from the 2020 level. Initially, meeting this target has also been widely considered quite challenging. However, the government has announced to adjust its calculation method for energy intensity, excluding incremental renewable energy use and fossil fuel consumed as feedstocks.

The report showed that after tuning the calculation method, China has reduced its energy intensity by 10.8% from the 2020 level, which means the country can meet the FYP target by cutting its energy intensity by another 3% in 2025.

Notably, China's energy intensity reduced by 3.8% annually in 2024, so the 3% target seems within reach.

The report pointed out that revising the energy intensity calculation aligned with China's high-level policy direction, which shifted focus from controlling energy consumption to controlling emissions. However, such a calculation could also trigger controversies, as it might delay the feedstock substitution in heavy industries and overlook lifecycle emissions in cleantech sectors.

Renewable's boom

China is not only the world's largest emitter but also owns the world's largest renewable generation capacity. Hence, despite the challenges associated with intensity targets, all renewable targets are likely to be met successfully, the report showed.

The most important, mandatory FYP target is for non-fossil fuels to account for 20% of China's primary energy consumption. As of 2024, non-fossil fuels have already occupied 19.68% of the country's energy consumption mix, indicating smooth progress toward meeting this target, the report showed.

The FYP target of having 3,300 TWh of annual renewable generation capacity has already been met ahead of schedule. In 2024, the annual generation capacity already reached 3,470 TWh, the report showed.

The national-level Renewable Portfolio Standards targets are also easy to be met. RPS refers to the target percentage of renewable electricity in the country's total electricity consumption.

Under the 14th FYP, China has targeted to have 33% of its power consumption from renewables and 18% from non-hydro renewables by 2025, the report showed.

In 2023, 32% of the country's electricity consumption was already from renewables and 18.1% was from non-hydro renewables, based on the latest available statistics.