The IOE&IT Daily Update today explores a raft of environmental trade news frrom the world’s second largest economy – and its biggest global polluter – with special attention on how the nation’s dominance in solar power is shaping trade relations in the renewables sector.
EU solar shortage?
The leader of the world’s biggest solar technology company has bit back at EU plans to dramatically cut the bloc’s use of Chinese parts in solar manufacturing.
Speaking to the FT, CEO of Longi Green Energy Technology Dennis She suggested that the plan to scale back so significantly was unrealistic, and said that the bloc should “at least slow down” its reduction in fossil fuel production if it plans to move away from Chinese solar suppliers.
China accounts for almost 80% of the world’s solar wafer and module capacity – with Longi representing 20% of global market share for photovoltaic modules – while the EU is currently only able to produce 3% of the products required for its solar energy.
Last week, the bloc agreed to manufacture at least 40% of the products required to lower greenhouse gases domestically, including solar panels.
It also pushed ahead with the Net Zero Industry Act, legislation which will encourage local production by simplifying permit granting for projects that promote manufacturing, while also introducing non-price criteria for 30% of their renewable energy project auctions.
This comes amid ongoing, unfavourable comparisons between the EU’s Green Deal and broader industrial policy, as well as the US Inflation Reduction Act, which effectively gave away $350bn in tax breaks.
Solar flair
Elsewhere, China has also received external praise for its roles as a driver in the development and production of solar panel technology.
The International Banker pulled together renewables stats and found that China’s solar power had significantly boosted global renewable capacity. In 2023 this rose by 50%, with three quarters of this increase attributed solely to solar capacity rises.
This is a key component of its strategy to achieve net zero, reaching peak emissions by 2030 and becoming carbon-neutral by 2060 – targets it’s already ahead of schedule to meet.
Not only is output up, but costs are down on production. UK-based research firm Wood Mackenzie found that the parts produced in China tend to be 50% cheaper than those made in the EU and 65% cheaper than those made in the US.
Australian collaboration
After ironing out their food and drink spat over recent months, could the two countries be set to engage on environmental issues?
The Australian Institute of International Affairs’ Dr Nedopil-Wang certainly believes they could.
Given China’s increasing economic and geopolitical influence, and increasing dominance as a renewable energy products supplier, Nedopil-Wang said it was likely Australia would adapt its green policy towards China in the future.
Examining the intersection of its ‘green transition’ with international policy at the Institute’s ‘Green China and Sustainable Asia in 2024’ event, he highlighted the substantial investment solar energy is likely to secure from China.
Connecting renewables growth to its Belt and Road Initiative – the foreign policy initiative which has seen it invest in infrastructure projects across Africa, Asia and some parts of Europe – Nedopil-Wang suggested China could be set to plug the “trillion-dollar gap” in Asia’s domestic industries in much the same way that it had addressed a lack of development in transport infrastructure.
He also noted the growth of China’s electric vehicle market, and attributed GDP growth of 5.3% to China’s ‘green transition’.
Coal resurgence
A smog-filled cloud to blight the otherwise sunny picture: analysts have speculated that China’s latest bid to revive its flailing economy could reverse a historic trend in CO2 emissions.
Reuters reports that anticipated stimulus from Beijing next month – a slew of incentives including tax breaks and loans – could lead to industrial output that reverses the global dip in C02 emissions normally observed between March and April.
Once an engine of global economic growth, China’s economy has stalled in the past year with leading firms in some of its key industries, such as property giant Evergrande, facing liquidation.
China, the world’s biggest polluter, accounts for 60% of coal-fire emissions, with its output rising in 2023 – up 6% on 2022 figures.