China's emissions are dropping due to its stunted state of its economy, which has been hampered by an enduring construction sector credit crisis and more lately by the new trade war with the United States.

Lower output by industrial plants and factories in turn reduced demand for power by the commercial sector, and allowed utilities to reduce output from fossil fuels by 4% during January to March from the same period in 2024.

Going forward, however, China's manufacturers are likely to boost production following the recently announced 90-day trade truce between China and the United States.

Higher factory activity will directly trigger more power demand, and will likely force Chinese power firms to lift output from fossil fuels to ensure adequate power supplies over the coming months.