China’s oil consumption projected to peak in 2025, boosting inclusivity in global green, low-carbon transition

On December 25, 1997, alongside the express road in Yumen city, Northwest China's Gansu Province, four 300-kilowatt wind turbines imported from Denmark began to slowly turn their blades.

This wind power test site marked the beginning of Gansu's renewable energy development. Due to their white color and petite size, these four turbines were affectionately dubbed the "Four Little Swans" by locals.

27 years later, travelers driving through Yumen city are often astonished by a different sight: Dense rows of wind turbines on both sides of the highway have formed vast white "wind turbine forests," stretching across the Gobi Desert into the distance. Today, locals call this massive wind power cluster the "Onshore Three Gorges."

Once upon a time, the Yumen Oilfield was the cradle of China's petroleum industry. In the decade before the founding of the People's Republic of China in 1949, Yumen Oilfield's cumulative crude oil production accounted for 95 percent of the national total, according to a report by the China Petroleum Daily.

Since the first oil flowed from Well No. 1 at the Laojunmiao site in the Yumen Oilfield in August 1939, 85 years have passed. Today, the Yumen Oilfield has evolved into a new development model integrating oil, gas, electricity, and hydrogen.

"This transformation is a microcosm of China's green and low-carbon energy transition," Wei Fulei, director of the Centre for Finance, Trade, and Industrial Development under the China Development Institute, told the Global Times.

Wei, a long-time observer of low-carbon economics, noted that China has become a global leader in energy transition and a pioneer in renewable energy technology innovation.

According to the 2024 Report on Oil and Gas Industry Development released by the CNPC Economics &Technology Research Institute in February 2025, China's oil consumption is projected to peak in 2025.

China's accelerated deployment of a sustainable and renewable energy ecosystem is expected to significantly stabilize the global energy supply chain and contribute to climate change mitigation efforts, according to the report.

In the eyes of Han Wenke, former director of the Energy Research Institute under China's National Development and Reform Commission, China has charted an effective green energy transition path suited to its national conditions - one of the most significant achievements in the country's low-carbon energy journey.

"China's resolve in its green energy transition is 'unshakable,' its policies are consistent, and its actions are increasingly forceful. It's a resolute and fearless march forward," Han told the Global Times.

Policy-led emission reduction

As global temperatures continue to set new records, addressing climate change has become a worldwide consensus, making the transition to green and low-carbon energy an inevitable path. But why has China emerged as a global leader in renewable energy?

An article published in 2024 by Yale University's School of the Environment sought to answer this question, identifying a key factor: The strong push from government policy.

"China's planners were looking for investments that would create an opportunity for a more advanced technological future, and this coincided with the need to clean up China's environment and the global effort to cut emissions," read the article.

Years ago, China began strategically planning its energy transition across policy, technology, industry, and consumption, consistently advancing its green transformation.

This has culminated in today's impressive achievements: The world's largest carbon market and clean power generation system.

China has committed to the dual carbon goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. Since 2016, control over both the total amount and intensity of energy consumption has become a binding requirement for economic and social development initiatives by local governments in the country, according to the Xinhua News Agency.

To achieve these goals, many companies, including petrochemical enterprises, are making concerted efforts.

For the Sinopec Jinan Company (formerly Jinan Refinery) in Jinan, Shandong Province in East China, achieving green production has become a major mission.

Established in 1971, the factory was originally located in the suburban industrial zone of Shandong's capital city. However, since the start of this century, Jinan's urban expansion has absorbed the refinery into the city proper.

In 2018, Sinopec - China's petrochemical giant and the parent company of the Jinan Refinery - released a plan to build a green enterprise focused on "clean, efficient, low-carbon, and recycling" principles, accompanied by related measures.

The Sinopec Jinan Company has been conducting clean production audits, promote oil quality upgrades, and implement its green enterprise action plan. Some of its production bases and equipment are sourced from Sinopec, according to a statement from the Sinopec Jinan Company to the Global Times. During the 13th Five-Year Plan (2016-2020), the company invested nearly 1 billion yuan (about $138 million) in pollution control and emission reduction and prevention.

"A few years ago, the refinery launched the 'green water and blue sky project,'" Han Xinying, a worker at the company, told the Global Times. "The treated wastewater, after clarification, meets standards suitable for sustaining fish."

A report released by the company in October 2024 showed that it had become one of Jinan's first "zero-waste factories." Measures included strengthening full-cycle management of solid waste, reducing waste at the source, maximizing resource utilization, and optimizing the operation of catalytic flue gas desulfurization and wastewater desalination systems.

Coal dominates China's energy mix, with oil and natural gas playing relatively smaller roles. However, oil still accounts for a significant share of energy consumption, making it critical to the energy transition, Ma Jun, director of the Beijing-based Institute of Public and Environmental Affairs, told the Global Times.

Policy has played a decisive role in the process of peaking oil consumption, Ma emphasized. This includes not only China's "dual carbon" commitments, but also its renewable energy industry deployment and capacity expansion.

"Moreover, China has synergized carbon reduction with pollution control and high-quality development. Sustained policy support has boosted industrial innovation, injecting momentum into high-quality growth. This multi-objective policy system has provided strong backing for peaking oil consumption," he said.

Blossoming renewable energy

Behind the peaking of oil consumption, another key reason is the vigorous development of the new energy industry.

On August 9, 2023, Shenzhen became the global focal point of the new energy vehicle (NEV) industry. That evening, NEVs from 13 Chinese automakers - including Hongqi, Dongfeng, Great Wall, NIO, and XPeng - gathered under the slogan "Together, We Are Chinese Automobiles" to witness BYD becoming the world's first company to roll out its 5-millionth NEV.

BYD's chairman and president, Wang Chuanfu, choked up at the event, saying, "It took BYD 20 years to solve a proof, demonstrating that BYD can, new energy can, and Chinese automobiles can."

A year later, data drew global attention: In July 2024, retail sales of new energy passenger vehicles in China reached 878,000 units, surpassing traditional fuel-powered passenger cars for the first time in monthly retail sales. This marked a significant milestone in the green transformation of the Chinese and global auto industries.

In 2024, China's NEV production and sales exceeded 10 million units for the first time, reaching 12.888 million and 12.866 million units, respectively, maintaining its position as the global leader for the 10th consecutive year, according to Xinhua.

The leapfrog development of China's NEV industry is not only a testament to the ascent of "Made in China" but also a major contribution to global emissions reduction.

Beyond transportation, industries such as manufacturing and construction are also major energy consumers and focal points for China's efforts to enhance energy efficiency.

Across China today, green landscapes and innovative solutions abound.

In Hangzhou, East China's Zhejiang Province, a desk lamp turned on by a local resident uses hydropower generated just 7 milliseconds earlier at the Baihetan Hydropower Station 1,700 kilometers away, the Zhejiang Daily reported.

In Dunhuang city, Gansu, this historic city relied entirely on wind and solar-generated green electricity for 247 consecutive days in 2024.

On the terraced fields of the Loess Plateau in Tongchuan, Northwest China's Shaanxi Province, rows of photovoltaic panels gleam under the sun, while cucumbers, tomatoes, peppers, and eggplants thrive in greenhouses below, showcasing a "new approach" to green energy.

The white paper on China's Energy Transition, released by the State Council Information Office in August 2024, states that China has made lasting efforts to replace outdated production capacity and drive energy-saving technological transformation. It has promoted innovation in production techniques, process reengineering, and digital and intelligent upgrading, and provided guidance for key enterprises to refine their energy management practices.

Over the past decade, the energy consumption per unit of added value of industrial enterprises of designated size - with an annual revenue of 20 million yuan and above - has dropped by more than 36 percent. Comprehensive energy consumption per unit of product in the steel, electrolytic aluminum, cement, glass, and other industries has lowered by more than 9 percent on average.

The newly installed capacity of renewable energy in 2024 accounted for 86 percent of China's total newly installed power capacity, while the cumulative installed capacity of renewable energy made up a record high of 56 percent of the nation's total, according to the National Energy Administration.

Meanwhile, China's renewable energy sector added a new installed capacity of 373 million kilowatts in 2024, representing a year-on-year increase of 23 percent. Hydropower and wind power contributed 13.78 million kilowatts and 79.82 million kilowatts, respectively, while solar power and biomass power increased by 278 million kilowatts and 1.85 million kilowatts.

Unwavering resolve

In achieving the carbon peak and taking the next step toward carbon neutrality, the perseverance of policies and actions is a valuable and necessary quality.

"No matter how turbulent the world becomes, China's resolve in its green and low-carbon energy transition has never wavered. Through continuous exploration and refinement, increasingly comprehensive energy transition policies and goals have become integral to China's mid- and long-term development plans," Han told the Global Times.

In contrast, the EU faces challenges in its energy transition due to the Russia-Ukraine conflict, while the US has seen significant uncertainty and policy reversals due to changes in government, he noted.

"Oil consumption entering a plateau phase, with absolute volumes no longer growing in the near future, can be seen as a pivotal milestone in China's green energy transition. But more milestones are on the horizon, such as coal consumption - a major carbon emitter - ceasing to grow, and renewable energy capacity reaching new heights," Han said.

Ma Jun explained that the oil industry faces challenges. The peaking and decline of oil consumption benefit the climate and public health, but also bring adjustment pressures, such as stranded investment risks and transition difficulties for small gas stations.

For the oil industry, exploring decarbonization pathways is essential. For instance, Carbon Capture, Utilization, and Storage (CCUS) is a critical tool. China needs to bolster R&D in this area, master advanced technologies, and leverage existing capabilities to drive emissions reductions.

Additionally, oil companies have expertise in pollution monitoring, chemical management, and prevention, which can be repurposed into consulting services to support decarbonization and environmental protection. Major oil firms are already diversifying, investing in renewables like solar and wind while shifting toward chemical feedstocks, Ma said.

In the pursuit of carbon neutrality, if carbon emissions persist, CCUS will be a key neutralization method for the oil industry, supplemented by carbon trading or carbon sink purchases, Ma added.

China's experience is also contributing to the world's energy conservation and emission reduction efforts.

A 2024 report from the International Renewable Energy Agency (IRENA) stated that China stands out as a global leader in exceeding its renewable energy ambitions, significantly driving the world's progress toward a sustainable future. It predicted that from now until 2030, 60 percent of the world's new renewable energy capacity will come from China.