China is the world’s largest emitter of greenhouse gases, but it is also the biggest investor in clean energy on the planet, spending $625 billion in 2024 alone. That tension defines China’s climate strategy: massive buildouts of solar, wind, and electric vehicles running alongside continued coal use, all under a national pledge to peak carbon emissions before 2030 and reach carbon neutrality before 2060.
The Dual Carbon Goals
President Xi Jinping announced China’s two-phase climate commitment at the United Nations General Assembly in September 2020. The first goal is to peak CO2 emissions before 2030, meaning total annual emissions stop growing and begin declining. The second is to reach carbon neutrality before 2060, where any remaining emissions are offset by carbon removal through forests, technology, or other means.
These targets shape virtually every climate-related policy in the country. They drive coal plant retirement schedules, renewable energy targets, electric vehicle subsidies, and industrial regulations. Whether China hits these marks will significantly influence whether global warming stays below 2°C, given that the country accounts for roughly 30% of global CO2 emissions.
Renewable Energy at Unprecedented Scale
China’s renewable energy buildout is staggering in scale. Utility-scale solar capacity reached more than 880 gigawatts in 2024, more than any other country. To put that in perspective, the 277 gigawatts of solar China installed in 2024 alone is more than twice the total solar capacity the United States had at the end of that year. Wind power has followed a similar trajectory, with China leading global installations for over a decade.
Grid investment hit an all-time high of roughly $85 billion in 2024, up 25% from 2019. Much of that money goes toward ultra-high voltage transmission lines that carry electricity from solar and wind farms in western China to population centers along the eastern coast. Without these long-distance lines, renewable energy generated in remote deserts and highlands would have no way to reach the factories and cities that need it.
Clean energy’s footprint in China’s economy is now enormous. Investment and production in the sector contributed about $1.9 trillion to the national economy in 2024, equivalent to roughly one-tenth of China’s GDP, or the entire GDP of Australia. The sector is growing three times faster than the broader Chinese economy.
Electric Vehicles Dominating the Market
Nearly half of all cars sold in China in 2024 were electric, representing about two-thirds of all electric vehicles sold worldwide. Starting in July 2024, electric car sales actually overtook conventional car sales on a monthly basis, a milestone no other major auto market has reached. This shift cuts tailpipe emissions directly and creates a growing source of electricity demand that, as the grid gets cleaner, compounds the climate benefit over time.
China also leads in charging infrastructure, with millions of public and private charging points installed across the country. The combination of affordable domestic EV brands, government subsidies, and dense charging networks has made the transition happen faster than most analysts predicted even a few years ago.
The Coal Problem
Coal remains China’s biggest climate contradiction. The country still relies heavily on coal-fired power, and new coal plants continue to be approved, partly as backup capacity to ensure energy security during periods when solar and wind output drops. But reaching the 2030 and 2060 targets requires phasing out a significant portion of existing coal capacity.
Research estimates that roughly 23% of China’s coal-fired power units, about 679 plants, will need to be retired by 2030 to stay on track for the carbon peak. Analysts have found that closing these older, less efficient units would not cause electricity shortages, though it would affect urban heating systems that currently rely on waste heat from coal plants. Solving that heating gap is one of the practical challenges that makes coal retirement politically complicated.
Carbon Trading and Methane Controls
China launched a national emissions trading scheme, creating the world’s largest carbon market by coverage. It initially applies to coal- and gas-fired power plants and is set to expand to seven additional industrial sectors. When fully operational, the system will cover roughly one-seventh of global CO2 emissions from fossil fuels. The market works by capping total emissions from covered industries and allowing companies to buy and sell permits, creating a financial incentive to cut pollution.
On methane, which traps far more heat per ton than CO2 in the short term, China released a national action plan in late 2023. The plan targets methane from coal mining and oil and gas extraction. By 2025, the coal mining sector was expected to capture 6 billion cubic meters of coal bed gas (which contains methane) for productive use rather than venting it into the atmosphere. This matters because China’s coal mines are among the world’s largest sources of methane emissions.
Green Hydrogen and Alternative Fuels
For industries that are difficult to electrify, like steelmaking and heavy shipping, China is investing in green hydrogen produced using renewable electricity. The country has already exceeded its 2025 target, installing more than 200,000 tonnes per year of green hydrogen production capacity. While that is still a small fraction of total hydrogen use in China (most is still made from fossil fuels), it signals a rapid ramp-up in a technology that could decarbonize some of the hardest sectors to clean up.
Reforestation and Carbon Sinks
China planted 4.45 million hectares of trees in 2024, part of decades-long reforestation campaigns that have pushed the country’s forest coverage above 25%. These forests act as carbon sinks, absorbing CO2 from the atmosphere as they grow. While tree planting alone cannot offset China’s industrial emissions, it contributes meaningfully to the carbon neutrality equation and addresses other environmental problems like desertification and soil erosion that have plagued northern and western China for generations.
The Bigger Picture
China’s climate approach is not a single policy but a sweeping industrial transformation. The $625 billion invested in clean energy in 2024 represented 31% of the global total. The country manufactures the majority of the world’s solar panels, batteries, and electric vehicles, which means its domestic policies ripple outward, driving down costs for every other country trying to decarbonize. At the same time, China’s continued coal buildout and rising total emissions mean the gap between ambition and current trajectory remains real. Whether the rapid growth of renewables overtakes fossil fuel use fast enough to meet the 2030 peak target is the central question of global climate progress right now.