China could reduce its emissions by 1.6 billion tons by 2030 by mobilizing 17.5 trillion yuan ($2.5 trillion) in green investments over the next five years, according to an analytical note from China International Capital Corporation cited in a report.

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The investment bank forecasts that the country’s emissions will peak in 2028 at 11.3 billion tons. Achieving this goal requires a 40% increase in annual green investment to 3.5 trillion yuan by 2030 to meet the target of reducing carbon intensity by 65% compared to 2005 levels. Data from the IndexBox platform underscores the scale of the required industrial shift, particularly in heavy industry.

The energy transition faces headwinds from a resurgence in coal production and economic pressures from declining demand and trade tensions, which complicate political efforts to decarbonize heavy industry. The analysis suggests steel production may be capped at around 900 million tons, significantly below its 2020 peak of 1.1 billion tons.

Renewable Energy Expansion and Sectoral Targets

To support the transition, China plans a massive expansion of renewable capacity. Wind and solar power are projected to grow from 1,700 GW by 2025 to over 2,800 GW by 2030, with non-fossil fuel sources adding 230 GW annually. Hydropower and nuclear capacity are also set to increase by 38 GW and 57 GW, respectively, over the next five years.

New regulations will require industrial sectors, including steel, cement, and polysilicon, to source between 25% and 70% of their energy from green sources by 2025 and 2026. China is expected to announce its broader 2035 climate targets ahead of the COP30 negotiations in Brazil, which will address the economy-wide carbon footprint and include greenhouse gases beyond CO2.

Source: IndexBox Market Intelligence Platform