China's Dominance in Clean Energy Investment and Research Challenges US and EU to Accelerate Efforts
China, the world’s second-largest economy and the biggest greenhouse gas emitter, has solidified its dominance in investment and technological advancement within the renewable energy sector. According to a study published by the European Commission in January 2024, China outpaced EU in research on clean technology. The study revealed that China led the number of peer-reviewed publications in the areas of solar, wind, lithium battery, heat pump and carbon capture technology in 2021. This marks a reversal from 2010 when the EU led publications in all these fields except wind. The US ranked third in this ranking of peer-reviewed journal publications on clean technology.
China's "30-60" Targets Drive Ambitious Energy Transformation:
In 2020, China announced the target to peak emissions by 2030 and achieve carbon neutrality by 2060 (the 30-60 targets). To achieve this goal, China is actively promoting energy conservation and electrification to meet demand. The country aims to reduce fossil fuel consumption and increase the use of renewable energy sources. China is also diversifying its energy supplies and enhancing its smart grid for improved energy security. Furthermore, China is emphasizing the growth of renewable energy in transportation, including the advancement of electric vehicles, and enhancing energy efficiency in its transportation network.
China Leads Global Investment in Clean Energy Projects:
In 2022, China accounted for nearly half of the world’s low-carbon spending, investing a staggering $546 billion in clean energy projects. The EU came in second position with $180 billion in clean energy investments, nearly 3 times lower than China. U.S. investments totaled $141 billion which is nearly four times lower than China’s. In the low-carbon manufacturing sector, China accounted for over 90% of the $79 billion invested globally last year.
Clean Energy Booms in China, Contributing 40% to Economic Growth:
An analysis published by the Centre for Research on Energy and Clean Air (CREA) revealed that China's investment in renewable energy infrastructure totaled $890 billion in 2023, nearly matching global investments in fossil fuel supply for the same year. According to a report published by Global Research agency, China’s clean energy sector contributed to 40% of its economic growth in 2023. Clean energy, including renewable energy, nuclear power, electricity grids, energy storage, electric vehicles (EVs), and railways, contributed 9.0% to China's GDP in 2023, up from 7.2% the previous year. The growth was primarily driven by the solar, EV, and energy storage industries. China's solar sector expanded by 63% to reach $350 billion in 2023, while EV production increased by 36%. This expansion of clean energy was further bolstered by a shift in capital from the slowing property sector to high-end manufacturing, marking a significant change in China's overall economic strategy, according to CREA.
EU Aims to Reduce Reliance on China with Boost in Clean Tech Production:
On February 6, 2024, EU states and lawmakers reached a deal to boost Europe's production of clean technologies, including solar, wind, and carbon capture, aiming to reduce reliance on China and attract more investment. The agreement sets a target for producing at least 40% of green tech used in the EU within the bloc by 2030. The deal includes "strategic" technologies such as nuclear and renewables, aligning with the EU's goal to become carbon-neutral by 2050. It also aims to streamline permit processes and give preference to European companies in public tenders, mirroring similar efforts by China and the US. The law is set to take effect after formal approval by EU states and the parliament.
US Inflation Reduction Act Targets China's Dominance in Clean Energy:
The Inflation Reduction Act, signed by President Biden on August 16, 2022, boasts the largest US investment in climate action to date, injecting $370 billion into clean energy and climate initiatives. The act seeks to reduce China's dominance by providing substantial subsidies to domestic manufacturing. One key aspect of the act involves offering consumers significant tax credits when they buy an electric vehicle, however, these credits are only available if the majority of the battery components are manufactured or assembled in North America.Top of Form
China's leadership in renewable energy investment and research highlights its strategic vision. As the world moves towards a greener future, China's influence on the global energy landscape will remain significant. To catch up, the United States and Europe must quickly strengthen their domestic manufacturing capacities. Despite challenges, collaboration, open markets, and a strong commitment to sustainability are crucial for achieving a truly green and fair energy future for everyone. This transformation will benefit the entire planet.