China CO2 emissions fell in Q2 2026 as oil use dropped

China's carbon dioxide emissions fell in the second quarter of 2026, driven by a sharp decline in oil consumption that marked a new phase in the country's energy transition. According to an analysis by the Centre for Research on Energy and Clean Air (CREA) published by Carbon Brief, the country's CO2 emissions dropped by 1 percent from April through June compared to the same period last year. This decline was primarily caused by a 9 percent overall drop in oil use, with consumption in the transportation sector plummeting by 16 percent. The analysis indicates this is the first time a reduction in China's emissions has been driven by lower oil consumption rather than coal. Previous dips in the country's carbon output were typically linked to reduced coal burning. The significant drop in oil demand occurred despite a 2.4 percent increase in coal use for power generation during the same quarter. The CREA report attributes the oil consumption decline to accelerated electrification, particularly in transportation, which has been spurred by disruptions to Middle East shipping routes linked to the ongoing U.S.-Iran war.