EU/US will not be able to overcome China’s dominance in ‘Green Technologies’ race

By Olga Ivanova

Europe has set its sights on ousting China from the position of a monopoly in the production of green technologies. But she has more fears than ambitions
In May, renewable resources – wind and solar – for the first time gave Europe a record amount of energy, almost a third of the total.
Cross-country competition for dominance in the green economy and the desire for independence in the supply of appropriate technologies have become a new goal for a number of global players. The United States has taken a hardline stand against China and has openly announced that it is going to compete to protect its economic interests. Europe is fighting for the title of the greenest region and is trying to balance between continuing the old course for a carbon-free future with the help of Chinese technologies and a new course of restricting supplies from China, which will allow domestic production to develop to equip industries with a green economy. The countries of the East are joining forces and capacities to approach a carbon-free future, and Africa is reconsidering diplomatic relations with long-standing partners from the European Union in favor of China.

Will the EU and the US be able to reduce their dependence on China and how many years will it take? So far, the answers to these questions are disappointing: today, China dominates almost all links in the international supply chains of green technologies.

“Green Push” promises to be impressive
Analysts predict that by 2030 the global market for key mass-produced clean energy technologies will be worth $650 billion a year, more than three times the current level. However, this is only possible if all countries fully fulfill their commitments in the field of energy and climate. The number of green energy jobs will more than double by now, from the current 6 million to almost 14 million, and industry and employment are expected to grow further in the coming decades.

Analysts also expect a significant increase in corporate investment in the implementation of climate-friendly technologies in the field. Although recently everyone is only talking about artificial intelligence and the growth of investment interest in this topic within global corporations, as early as 2025 the direction of corporate investment will change: if funding for artificial intelligence is $ 1 trillion, then investments in “climate-friendly” technologies will reach 1.5–2 trillion. The next five years will be decisive for determining the vector of development of critical areas of green technologies; the same time may be needed to outmaneuver key market players and redistribute spheres of influence in the new, green economy.

And many countries are striving to occupy a prominent place here. They compete to develop their own industrial strategies, redefine global diplomatic and economic ties. The Clean Energy Technology Era brings millions of new jobs in solar panels, wind turbines, electric vehicle batteries, hydrogen electrolyzers, heat pumps, and more.

In the United States, for example, the Joe Biden administration embarked on a $2 trillion program to transform the American economy. The money will be used to stimulate investment in battery technology and green hydrogen. In Europe, 670 billion euros have been allocated for climate goals – and this is only for the next few years; over the next decade, at least a trillion euros is planned to be spent for the same purposes.

But if the Western world has taken care of financing this area only recently, while China has been investing phenomenal sums there for many years. There are worrying protectionist aspects to this competition, but there are also upsides: for example, analysts believe that the race for subsidies and competition for dominance in green energy is boosting the clean-climate technology sector.

However, if the West wants to overtake China, it will have to seriously accelerate. The PRC invested $546 billion in the green economy in 2022 alone, almost four times as much as the US ($141 billion). The EU came in second in this rivalry, spending $180 billion in cleantech last year.

Why should Europe break off relations with China?
The intention to separate economically from China and achieve maximum autonomy in supply chains by blocking the eastern stream was discussed by the US and the EU on the eve of the pandemic. But China still leads the way in green technology and global supply.

Europe joined the race unleashed by the United States. But what will it lose and what will it gain if it refuses to import most of its imports from China, will the region cope with the implementation of plans to decarbonize the economy and develop renewable energy?
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EU/US will not be able to overcome China’s dominance in ‘Green Technologies’ race

By Olga Ivanova Europe has set its sights on ousting China from the position of a monopoly in the production of green technologies. But she has more fears…