China’s waning appetite for oil is keeping emissions in check
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Drivers in China started turning to charging stations instead of petrol pumps as the Iran war drove fuel prices up.
PHOTO: REUTERS
BEIJING – The millions of Chinese drivers who turned to charging stations instead of petrol pumps as the Iran war drove up fuel prices have helped shift the country’s climate trajectory.
China’s oil consumption fell 9 per cent year on year in the second quarter of 2026, driven by a 16 per cent slump in the transport sector, according to a report from the Centre for Research on Energy and Clean Air (CREA).
Crude oil processing dropped 11 per cent. Electric vehicles (EVs) were a major beneficiary as petrol and diesel became more expensive.
Although coal use at power stations continued to rise, the decline in oil demand helped trim total emissions by 1 per cent – the first time that oil rather than coal has been responsible for a drop in China, CREA said.
“The rise in oil prices has caused a stronger shift in China’s transportation sector than anyone anticipated, with EV deployment and use accelerating from an already high base,” said Lauri Myllyvirta, lead analyst at CREA.
“This trend is unlikely to be reversed.”
The government’s drive to electrify the economy is upending calculations on energy demand.
The chairman of state-owned Sinopec, China’s top refiner, said last week that it is very likely that the country’s oil consumption peaked in 2025, which would be five years ahead of target.
The shift is significant. If the marginal drop in emissions in 2025 can be sustained, it would put Beijing well ahead of its commitment to peak carbon before 2030.
Electric heavy-duty trucks in particular are having a breakout year as elevated diesel prices drive a sales boom.
The total number of EVs grew by a third in the second quarter, while charging volumes increased by 60 per cent.
The discrepancy indicates that EVs already on the road were used much more than before “with plug-in hybrid drivers likely favouring electricity over fuel”, CREA said.
In the first half, the volume of oil displaced by EVs in China exceeded the UK’s total oil consumption over six months, according to CREA. BLOOMBERG
