Does clean energy make China immune to fossil fuel price shocks

Shockwaves have reverberated around the world in the month since the US and Israel launched attacks on Iran and then Lebanon. People in the Middle East are again paying with their lives for wars fuelled by fossil interests and geopolitical power plays.

And around the world, we feel the secondary shocks, as the fallout impacts the normal movement of people, and trade of commerce, energy, and resources. Today, we share in uncertainty, anxious about the end of the violence and the depth of the crisis, as we continue to watch horrors unfold in short-form video, and endless scroll through our days, and in nervous texts and calls from colleagues and friends.

Greenpeace Netherlands projection action onto the Eye Filmmuseum in Amsterdam.

Greenpeace is calling for an immediate end to military violence, a return to international law, and diplomatic solutions.

Concern around the secondary impact in China of the US and Israel's strikes on Iran is rising, as the imported inflation is causing some anxiety. The shockwaves on energy systems have felt buffered, in part by the prevalence of renewable energy in China and the widespread use of electric vehicles, which are not dependent on oil.

But overall, China's energy mix remains fossil fuel-dependent. And this crisis has shown how dependence on fossil fuels is a risk. As illegal wars continue to devastate innocent lives, degrading the global geopolitical mandate for peace that emerged from the ashes of World War II, the fossil fuel interests that have instigated so much of the violence become increasingly volatile in any country.

How wind, solar and electric vehicles help shield China from oil price shocks

"You can't blow up the sun," my colleague Julien Jreissati, Programme Director at Greenpeace Middle East and North Africa, wrote in the days after the US and Israel's first strikes.

A photovoltaic and solar thermal power generation base in Dunhuang, China.

And in China, the widespread electrification of transportation - there are more than 30 million electric vehicles (EVs) on the road in China , offsetting an approximate 430,000 barrels of gasoline every day - and expansive development of wind and solar has been clearly stabilizing. China has built more wind and solar than any other country. And recently, new planning documents have put committed focus into the advancements of a new power system that will enable them to displace reliance on fossil fuels, such as grid-scale energy storage and smart grids.

At the pace of renewable energy growth and grid updates, China could generate 33% of electricity from renewables by 2028, and 40% of total electricity by 2030.

But this geopolitical crisis now puts China at a crossroads, putting more pressure on a decision that Beijing has delayed for some time: when to systematically leave coal behind and make renewable energy the backbone of China's energy system.

EV boom and falling oil demand in China

The expanding electrification of transportation has decreased China's reliance on fossil fuels.

Greenpeace East Asia has an office in Beijing, where almost one in every six vehicles on the street is a new energy vehicle. The booming of EVs has reduced fossil fuel consumption in China's transportation sector. Since 2018, oil consumption (including gasoline and diesel) in China's transportation sector has begun to decline, and EVs are the major driver of that trend. And it is set to accelerate. The 430,000 barrels of gasoline per day now offset by EV adoption could quadruple by 2040.

Solar power plant in Dunhuang, Gansu Province, China.

The true cost of internal combustion engine (ICE) vehicles is staggering, and oil price shocks underscore the continued risk of these vehicles. This is just one of a number of trends shifting consumer preference toward EVs. The skyrocketing oil prices should be a wake-up call to the automakers, too, both in China and globally.

How effective can this "clean energy shield" be in protecting China from future fossil fuel price shocks?

My answer is: yes, but China's renewable energy transition is just kicking off, and coal presents a systemic barrier to stronger adoption of wind and solar..

Since 2022, increased calls for "energy security" have been paired with increased build-out of coal power plants. And today, coal still accounts for more than half of China's energy consumption, relegating wind and solar to only 10% of consumption, even as these renewable energy sources account for 22% of total electricity generation available.

However, I see huge potential from renewable energy to replace coal. China achieved its coal power emission peak in 2025. In the same year, the total power generation from wind and solar was able to meet 100% of China's total increase in power demand. This means that China already does not need to build more coal power to meet growing power demand.

An opencast coal mine near the headwaters of the Yellow River.

Dependence on coal is a critical risk. And it is clear to see that concern around this risk is shared by policymakers in the Chinese government, who have tried to decrease China's reliance on imported coal.

One clear lesson we should see clearly in the oil price shocks that have emerged from this crisis is that dependence on limited, contested, combustible, and corrupting fossil fuels puts us at risk no matter how much we stockpile.

Together, more renewable energy and the expanding electrification of key sectors like transportation create a shield that protects China's economy from the fossil fuel price shocks that many other countries are living through right now. But we can also see how a cautious reliance on coal and outdated ICE automotive manufacturing can actually undermine this shield's effectiveness.

From Iran to Europe and China, the message is the same: fossil fuel dependence is a permanent risk, and building renewable, decentralised energy systems is the only way to protect people from the next war-driven energy shock.

Yuan Ying is the Programme Director and Chief China Representative at Greenpeace East Asia, based in Beijing.