China’s waning appetite for oil is keeping emissions in check

Millions of Chinese drivers switched from petrol pumps to charging stations as higher fuel prices made electric vehicles more attractive. That change helped push China’s oil consumption down 9% year on year in the second quarter of 2026.

Transport oil use fell 16%, while crude processing dropped 11%, according to the Centre for Research on Energy and Clean Air. Electric vehicles benefited as petrol and diesel became more expensive. Coal consumption at power stations continued to rise, but the fall in oil demand still helped reduce total emissions by 1%.

The result marked the first time, CREA said, that oil rather than coal drove a decline in China’s emissions. “The rise in oil prices has caused a stronger shift in China’s transportation sector than anyone anticipated, with EV deployment and use accelerating from an already high base,” said Lauri Myllyvirta, CREA’s lead analyst. “This trend is unlikely to be reversed.”

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The rise in oil prices has caused a stronger shift in China’s transportation sector than anyone anticipated, with EV deployment and use accelerating from an already high base.

The government’s push to electrify the economy is also changing expectations about future energy demand. The chairman of state-owned Sinopec, China’s largest refiner, said last week that oil consumption had probably peaked in 2025, five years earlier than the official target.

Electric heavy-duty trucks are having a particularly strong year as high diesel prices drive sales. The number of EVs rose by a third in the second quarter, while charging volumes increased 60%. CREA said the gap suggested that vehicles already on the road were being used more often, with plug-in hybrid owners likely choosing electricity over fuel. In the first half of the year, EVs displaced more oil in China than the United Kingdom consumed over six months.

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This trend is unlikely to be reversed.