China could reduce emissions by 1.6 billion tons by 2030 – research

China could cut emissions by 1.6 billion tons by 2030 if the country manages to mobilize 17.5 trillion yuan ($2.5 trillion) in green investments over the next five years.

This is according to an analytical note from leading investment bank China International Capital Corporation, Bloomberg reports.

The bank predicts that emissions in the country will peak in 2028 at 11.3 billion tons.

China’s energy transition is expected to face significant challenges. The resumption of coal production is affecting efforts to control emissions. In addition, declining demand and trade tensions are affecting the economy and, therefore, political plans to support heavy industry in decarbonization.

To achieve its goal of reducing carbon intensity by 65% by 2030 compared to 2005, China needs to increase green investment by 40% to 3.5 trillion yuan per year by the end of the decade. Support will be needed in areas such as renewable energy, electrification, and industrial restructuring.

As noted in the analytical note, steel production in the country may be limited to approximately 900 million tons, compared to a peak of 1.1 billion tons in 2020.

Wind and solar power capacity will grow from 1,700 GW by 2025 to more than 2,800 GW by 2030. An annual increase of 230 GW is expected from non-fossil fuel sources. Over five years, hydropower and nuclear power could grow by 38 GW and 57 GW, respectively.

China is expected to announce its climate targets for 2035 ahead of the COP30 negotiations in Brazil this year. These will address the carbon footprint of the country’s economy as a whole, including greenhouse gases other than CO2.

It should be noted that China is setting green energy targets for a larger number of industrial sectors. For example, steel, cement, and polysilicon producers will be required to use green energy to cover 25% to 70% of their demand in 2025 and 2026.