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The View | How China is becoming the Saudi Arabia of renewables
China’s declining demand for fossil fuels and increased clean-energy capacity could usher in a new shift in global wealth distribution
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China’s consumption of fossil fuels has been declining this year due to the rise of electric vehicle use and surging capacities in renewable energy sources. With capacity of renewables potentially growing faster than the likely growth in energy demand, China’s consumption of hydrocarbons is entering a path of secular decline.
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China may have already peaked its carbon emissions seven years ahead of the deadline for its Paris Agreement commitments. China’s petrol consumption increased by 0.32 per cent on the whole in the first half of 2024, year on year, but consumption actually fell in the latter four months. Meanwhile, diesel consumption declined by 3.52 per cent in the first half of the year.
The trend would appear to be continuing – China saw a 3.1 per cent decline in crude imports during the first eight months of the year. One likely reason is the rapid increase in new-energy vehicles.
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The maintenance costs of these vehicles are about half that of cars with internal combustion engines, according to an analysis by non-profit organisation Consumer Reports. In China, the number of new-energy vehicles reached 20.4 million, or around 6 per cent of all vehicle ownership.
China is on track to reach 10 million sales of such vehicles this year, according to the International Energy Agency. Hence, the automotive energy consumption is sharply shifting to electricity away from hydrocarbons.
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