China’s Energy Transition Now Hinges on Greening Industry: Agora

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(Bloomberg) — China has reached the point where its climate goals now depend on cutting carbon emissions in some of its dirtiest industries.  

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The country has moved beyond its record-breaking buildout of clean power, and needs to focus on hard-to-electrify sectors to deliver on its green transition, according to a new report on Wednesday from climate think tanks Agora Energy China and Agora Energiewende.

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“China has largely solved the challenge of scaling renewables,” said Kevin Tu, managing director of Agora Energy China. “The priority now is to ensure that clean energy can transform industry, strengthen energy security and deliver sustained emissions reductions.” 

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The government’s 15th five-year plan for energy development due for release later this year “will be the first real test of this transition at scale,” he said.

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The shift comes at a critical moment. China’s emissions expanded by just 0.5% in 2025, suggesting a potential plateau, with coal-fired power generation falling for the first time in a decade. That leaves growth increasingly concentrated in heavy industries such as steel, cement and chemicals, which account for 14% of the country’s total emissions, the report said.

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Abating emissions using renewable hydrogen, electric heating and low-carbon materials “ultimately depends on access to abundant clean electricity and a more flexible power system,” Tu said.

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China’s success with renewables hasn’t been clear cut. While solar and wind more than doubled over five years to about 22% of total electricity generation in 2025, utilization fell to less than 95%. The wastage highlights a growing mismatch between expanded capacity and the grid’s ability to absorb all the extra power.

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Even if 2025 marks its carbon peak, China would still needs to cut emissions by as much as 1% a year to meet its 2035 obligations, underscoring the growing urgency to decarbonize industry, according to the report.

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On the Wire

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China’s central bank chief and top financial policymakers will take the stage Wednesday for the Lujiazui Forum, a gathering that could signal Beijing’s next moves to support the sputtering economy.

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Germany is considering backing the construction of an offshore wind power-conversion platform in the Baltic Sea as it looks to tackle China’s dominance in renewables infrastructure.

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After the Iran war, China has emerged as the world’s first oil “swing importer.”

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This Week’s Diary

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