China's oil demand falls, driving first oil-led emissions drop

China's carbon dioxide emissions fell by 1% year-on-year in the second quarter of 2026, marking the first time that reduced oil consumption—rather than coal—was the primary driver of the decline. The drop was fueled by a 9% decrease in oil use, as consumers shifted toward electric vehicles and rail transport amid high crude prices.

According to an analysis by the Centre for Research on Energy and Clean Air (CREA), electric vehicles displaced 36 million tons of oil in the first half of the year—more than the UK's total six-month consumption—accounting for roughly one-third of the fall in oil demand. The pace of displacement accelerated in Q2, with EVs replacing 19 million metric tons, up 50% year-on-year.

Electric trucks were the fastest-growing source of displacement, with alternative fuel use in trucks jumping 90% in January–June. Slower growth in the chemical industry and a shift to electric equipment in construction and mining also contributed.

The analysis estimates that lower oil use helped China avoid 35 million tons of CO2 in Q2, or 1.3% of total emissions, even after accounting for emissions from EV charging. Power sector emissions rose 3% due to increased coal use, but overall emissions are on track to fall for the full year.

China remains the world's largest emitter, though it has taken a prominent role in climate diplomacy since the U.S. withdrew from the Paris Agreement. The decline follows a 0.3% drop in 2025, the first annual fall since 2022.