China is hitting record power demand while flattening emissions. Here’s what that shift means for green technology, smart cities and sustainable industry worldwide.
China’s power demand is heading for a new winter record, yet its carbon emissions barely grew in 2024 – just 0.6%. Those two numbers tell you almost everything about where green technology and climate policy are going next.
When the world’s largest emitter starts adding record amounts of clean power while keeping emissions growth essentially flat, every energy and manufacturing company has to pay attention. Supply chains move. Financing rules change. And the space for fossil-heavy business models keeps shrinking.
This matters because China is no longer just a big energy market. It’s the backbone of global clean technology: solar, batteries, EVs, and increasingly, low‑carbon power equipment. If you work in energy, heavy industry, transport, finance or smart cities, China’s current moves will shape your costs, your competition and your climate risks over the next decade.
In this piece, part of our Green Technology series, I’ll unpack what the latest developments in China actually mean for clean energy, smart infrastructure, and sustainable industry – and how you can respond strategically instead of just watching from the sidelines.
1. Record Winter Demand Meets a Cleaner Power System
China is heading into a winter where both electricity and gas demand are expected to hit the highest levels ever recorded. At the same time, coal plant output has recently dipped year‑on‑year and national CO₂ emissions growth has slowed to 0.6% in 2024, below the global average of 0.8%.
The reality? China is proving that you can keep electrifying the economy without letting emissions run away – if you build enough green technology fast enough.
What’s actually driving this?
A few trends are converging:
- Electrification of everything: More heat pumps, more data centres, more electric vehicles, and more industrial processes shifting from direct fossil fuel use to electricity.
- Aggressive renewables build‑out: China has been adding solar and wind at a pace that many analysts underestimated even three years ago.
- Grid modernisation and gas turbines: A new high‑efficiency gas turbine fully manufactured in China is designed to support the grid with flexible, lower‑carbon power while reducing dependence on imported technology.
From a green technology perspective, this is a textbook example of how countries can manage peak demand:
- Use AI‑enabled forecasting to predict local and national demand spikes.
- Combine variable renewables with efficient, flexible capacity (gas, storage, demand response) instead of over‑building coal.
- Deploy smart grid infrastructure so clean power can move where it’s needed most.
If you’re in the energy sector – utility, IPP, or tech provider – there are clear lessons:
- Flexibility is now a primary product. Storage, demand response, and high‑efficiency turbines have real value when demand peaks.
- Grid intelligence is a growth market. AI‑driven load management, predictive maintenance, and congestion management are no longer “nice to have”.
- Local manufacturing of clean tech hardware is strategic. China’s domestically built turbine underlines how governments now see clean energy equipment as economic security, not just climate policy.
2. Oil Plateaus, Heavy Industry Decarbonises
While power demand surges, Chinese oil demand is expected to stay subdued at least until mid‑2026, with some analysts expecting a plateau by 2030. At the same time, CO₂ emissions from building materials are projected to fall 25% in 2025 compared with pre‑2021 levels.
Here’s the thing about this shift: when the world’s biggest importer of oil and largest producer of cement and steel starts bending its curves, the rest of the world feels it.
Why this matters for sustainable industry
Several structural changes stand out:
- Slower oil demand growth means more space for EVs, electric trucks and synthetic fuels to gain share without crashing the system.
- 25% cuts in building‑materials emissions signal that green cement, low‑carbon steel and process optimisation are moving from pilot to practice.
- Flat emissions growth overall suggests that early investments in renewables and efficiency are finally offsetting growth in energy demand.
For businesses outside China, this isn’t an abstract macro trend. It changes competitive dynamics:
- If you’re in cement, steel, glass or chemicals, expect carbon intensity to become a core differentiator, not a CSR talking point.
- Buyers of construction materials and industrial components will increasingly face procurement rules tied to lifecycle emissions, driven by both domestic policies and border measures like the EU’s CBAM.
- Digital tools – from AI‑based process control to automated carbon accounting – are quickly becoming standard industrial kit.
Practical moves you can make now:
- Benchmark your product’s carbon intensity against emerging Chinese and EU competitors.
- Invest in energy management systems and process analytics that cut fuel use and provide auditable emissions data.
- Build internal capability around green procurement and lifecycle assessment; your biggest customers will ask for it sooner than you think.
3. Climate Diplomacy, Economic Security and the New Trade Rules
China’s climate politics are no longer just about domestic targets. They’re deeply entangled with trade rules, finance flows and technology standards.
Two threads stand out right now:
- China–France climate alignment
- The EU’s economic security and CBAM push
China–France: climate and green economy cooperation
China and France have issued a joint climate statement committing to accelerate renewable energy worldwide, improve cooperation on carbon pricing and methane, and support climate finance for developing countries. They’re also boosting cooperation on nuclear energy and the “green economy”.
For green technology companies, that means:
- More room for joint R&D in renewables, nuclear and grid tech.
- Potential for aligned signals on carbon pricing, which make it easier to plan long‑term industrial investments.
- A higher profile for climate finance, especially for infrastructure in emerging markets.
If you’re operating in Europe, this kind of bilateral alignment is a clue: climate‑aligned industrial policy isn’t going away, despite political noise.
EU economic security, rare earths and CBAM
The EU is tightening its economic security doctrine, aiming to reduce exposure to rare‑earth disruptions and foreign overcapacity, especially from China. New plans include:
- Restrictions on exports of recyclable rare‑earth waste and battery scrap to keep critical materials within Europe for EVs, wind and semiconductors.
- Stronger tools to respond to market distortions and capacity gluts.
At the same time, the EU is pushing ahead with its carbon border adjustment mechanism (CBAM), even as China, India and Saudi Arabia criticise it. EU officials are standing firm; Chinese commentators argue it exposes the lack of a globally accepted, fair standard for measuring carbon footprints.
This friction has a clear message for any company trading across borders:
- Carbon data is now a trade document. If you can’t credibly quantify your embedded emissions, you’re exposed.
- Material flows are politicised. Count on more scrutiny over where and how your batteries, motors and magnets are produced and recycled.
- Circularity is strategic, not just sustainable. Retaining and re‑processing critical minerals at home is becoming core policy for both China and the EU.
If you’re planning long‑term investments, you should be asking:
- Where will I get low‑carbon inputs that comply with future border rules?
- How do I build traceability into my supply chain now, not in 2030?
- Which parts of my product portfolio are most vulnerable to carbon‑linked tariffs?
4. Smart Cities and the Quiet Power of “Mid‑Level” Climate Leaders
Most discussions of Chinese climate policy focus on presidents, ministers and national targets. But the people turning those targets into real projects are often mid‑level bureaucrats in city governments.
Weila Gong’s research on “entrepreneurial bureaucrats” in Chinese cities is blunt: mid‑level officials, not just mayors, design and push through many of the most innovative local climate policies.
How mid‑level officials shape green technology adoption
Here’s how these officials operate in practice:
- They treat low‑carbon pilot programmes as career opportunities – if their city stands out, their bosses get promoted, and so do they.
- They design visible, unique projects: local emissions trading systems, green transport corridors, industrial parks powered by renewables.
- They build coalitions across agencies and companies, using the pilot label to attract finance and political backing.
The Shenzhen emissions trading scheme is a good example. What made it work wasn’t just top‑down orders; it was local officials with enough autonomy to:
- Select which companies to include,
- Negotiate data access,
- And iterate the rules when problems surfaced.
For anyone building smart city solutions or AI‑driven climate tools, there’s a clear takeaway: your end users aren’t only national energy ministries. They’re often mid‑career civil servants juggling air quality, transport, industrial growth and budget constraints.
If you want your green technology to scale in cities (in China or anywhere else):
- Design tools that reduce administrative friction – automated reporting, standardised dashboards, pre‑built compliance templates.
- Offer capacity building: short, practical training for city officials on data, policy design and implementation.
- Build pilots that create politically visible wins: measurable improvements in air quality, energy savings or traffic that can be shown within 1–2 years.
Gong’s research also highlights a major bottleneck: data.
Most Chinese cities still lack regular, high‑quality carbon accounting systems. Local agencies don’t always have access to granular data held at the central level, and a lot of company data is self‑reported.
That’s a giant opening for green technology and AI:
- Automated data collection from meters, IoT devices and billing systems.
- AI‑based data validation to flag anomalies and likely under‑ or over‑reporting.
- Citywide carbon dashboards that integrate power, transport, buildings and industry.
Whoever solves urban‑scale climate data in a reliable, affordable way will own a critical layer of the future climate infrastructure.
5. Policy Signals: Eco‑Policing, New Energy Systems and Global Capital Flows
Alongside the big headlines, several quieter policy moves in China point toward where green technology demand is heading.
Stronger enforcement and “eco‑police”
China’s environment ministry is drafting a grading system for “atmospheric environmental performance” in key industries, including explicit evaluation of carbon‑reduction results. On top of that, an “eco‑police” mechanism is planned for 2027.
Once you grade and police environmental performance, you create direct commercial demand for:
- Low‑emission industrial equipment (burners, kilns, motors, process controls)
- Monitoring tech (sensors, stack monitors, data platforms)
- Compliance software (reporting, verification, audit trails)
If you sell industrial or environmental tech, watching these enforcement trends is often more useful than reading speeches.
A new energy system mandate
The National Energy Administration has called for the preliminary establishment of a “new energy system that is clean, low‑carbon, safe and efficient” within five years.
That’s essentially a mandate for:
- High shares of renewables in the power mix
- Better integration of storage and flexible demand
- Stronger, smarter transmission grids
Add AI into that picture and you get a clear shopping list for utilities and grid operators: forecasting tools, optimisation engines, real‑time control systems and cybersecurity for highly digital infrastructure.
$180 billion in outbound cleantech investment
Since 2023, Chinese companies have committed around $180 billion to cleantech projects overseas. That capital is going into solar, wind, EVs, batteries and associated infrastructure across the Global South and beyond.
For host countries, that can be a chance to:
- Access affordable clean hardware
- Build local manufacturing and service jobs around it
- Pair physical infrastructure with digital layers: monitoring, billing, predictive maintenance.
For competitors, it’s a signal: cost curves will keep coming down, and the bar for cost‑effective, scalable green technology will keep rising.
Where This Leaves You: From Watching China to Using the Signals
Most companies get China wrong by treating it as a distant headline, not a live input into planning. Yet the signals are unusually clear right now:
- Power and gas demand are breaking records, while emissions growth flattens.
- Oil demand growth is slowing, and heavy industry is cutting carbon.
- Climate policy is moving through trade rules, finance channels and city administrations, not just national pledges.
If you work in energy, industry, transport, finance or urban planning and you care about green technology as a driver of growth, here’s what I’d do:
- Audit your exposure and opportunity against three axes: carbon intensity, data readiness and policy risk.
- Invest in climate data infrastructure – inside your factories, your fleets and your cities. This is becoming as fundamental as financial accounting.
- Align with the new rules of the game: border carbon measures, eco‑grading systems, and climate‑linked finance.
China’s trajectory isn’t a blueprint every country should copy. But it is a living lab for what large‑scale clean energy, smart cities and sustainable industry look like under real‑world constraints.
The question now isn’t whether this shift continues. It’s how fast you can adapt your own strategy before the next set of climate‑driven trade and technology shocks lands on your desk.