Overview
- China's carbon dioxide emissions fell about 1% in the second quarter of 2026, a decline CREA attributes mainly to a 9% drop in overall oil use and a 16% slump in transport fuel demand.
- Shipping disruptions through the Strait of Hormuz linked to the US–Iran war tightened crude supplies and pushed up prices, which encouraged drivers and fleet operators to switch from petrol and diesel to electricity.
- Electric vehicle deployment and use surged in Q2, with the EV fleet growing roughly 33% and charging volumes rising about 60%, meaning existing EVs were used much more and plug-in hybrids likely favoured electricity over fuel.
- State refiner Sinopec's chairman said it is very likely China's oil consumption peaked in 2025, but coal use at power stations continued to rise and overall emissions were marginally higher across the first half of 2026 after a 2% increase in Q1.
- If higher fuel prices keep consumer and fleet behaviour tilted toward electricity, the change could be persistent and reshape refining, import flows, and charging infrastructure needs even as rising coal generation tempers near-term climate gains.