If in the sixties the great economic powers of the time, the United States and the Soviet Union, launched the space race in the middle of the Cold War, today the race is different: that of the zero-emissions industry. In this league, the large blocs of the multipolar world play: in addition to the Americans and Europeans, China, India and Japan. Each one has put on the table an ambitious plan to achieve leadership in the energy transition: just think of the United States Inflation Reduction Act, the EU Green Deal, the fourteenth Chinese five-year plan, the Japan Green Growth Strategy or the India Conservation Act.
Investments in zero-emission economic sectors, thanks to renewables and electric mobility, will exceed the total that receives fossil fuels this year: more than one trillion euros worldwide. Who is left behind will continue to depend on gas or oil, an option with high economic and strategic costs. Which of these announced projects is yielding the greatest results?
“The future energy system will be rebuilt on clean energy, with solar and wind as the backbone. These five big economies account for two-thirds of global electricity demand and will be the engine of the success of the electricity transition around the world”, commented Dave Jones, principal analyst at the consultancy Ember. “The EU has an advantage: its transition began earlier and has accelerated as it tries to become energy independent from Russia. But China is building renewable energy even faster, and the US has unleashed a torrent of investment that will soon begin to transform its economy,” he added.
And it is true: at the moment this great economic race of the 21st century has a clear winner: China. Despite going through recent economic difficulties, with its increasingly questioned model and weakened growth and although the Asian giant is still one of the most polluting countries in terms of emissions (it accounts for 30% of the world total, a record), For years, Beijing has been clear that decarbonization had to be a priority. And a business. The growing presence of Chinese electric cars at the Munich show (see next page) is much more than a mere anecdote. It is the symbol of this strategy.
A new study published this week by the Brussels think tank Strategic Perspectives, which handles data from the consulting firms Bnef and Ember, titled Competing in the new zero-carbon industrial era, confirms that China is one step ahead. 55% of the renewable capacity installed in the world in 2023 comes from the country of the great wall. Half of the world’s electric cars circulate in China. In addition, Beijing monopolizes 60% of manufacturing technology in zero-emission sectors, creates millions of jobs and controls almost the entire battery supply value chain, with 74% of total battery manufacturing. lithium.
The bet is a state policy that attracts financial flows: Chinese investments in decarbonized technologies have increased by 71% between 2021 and 2022. China will double its capacity and produce 1,200 gigawatts of wind and solar energy between now and 2025, thereby that will reach its 2030 goal five years ahead of schedule, according to a report by Global Energy Monitor,
For Li Shuo, global policy consultant at Greenpeace Asia, “this battle to lead zero-emission industries is highly politicized. But the Chinese can count on a great advantage: by having such a large market share in some sectors, they are not obsessed with profitability and they also have great domestic demand.”
Does the EU have the possibility to stand up and compete for this new leadership? This is the question. Europe is not so bad, according to the study. It is the community block that can boast of having the highest percentage (22%) of electricity from solar and wind, above gas and coal. In investments in renewables, it ranks second in investments, with more than 180 billion euros and 1.3 million jobs created, just behind China. It also has the highest ratio of electric cars per capita and strong leadership in the development of heat pumps, with investments of more than 20 billion in 2022.
According to Linda Kalcher, CEO of Strategic Perspectives, “in a world where you are either ahead or risk being left behind, manufacturing low- or zero-carbon technologies becomes a precondition for industrial growth, innovation and competitiveness. “This will define the legacy of Ursula Von der Leyen.” Until now Brussels has focused more on regulatory aspects, but the EU needs fresh capital to consolidate an advanced manufacturing fabric.
A clear example comes from the solar energy sector. Chinese factories produce 75% of the world’s honeycomb wafers. The EU imported 84% of its solar modules installed between 2017 and 2021. The United States, 77% and India 75%. “The high dependence on China for the delivery of its strategic technologies exposes other countries to supply risks, from delays, bottlenecks or even disruptions,” the study states. “Everyone is in love with solar energy now. But dependence on solar technology is a risk for Europe,” warned Dries Acke of the influential organization SolarPower Europe. “It is true that supply is becoming more and more diversified, but some European solar companies are also going bankrupt due to lack of capital.”
In the presentation of the report, the French energy expert Neil Makaroff recalled that the coming energy transition “is like a strategic start-up.” Therefore, Europe has to be more attractive to attract investments and improve both innovation and manufacturing processes in its territory. In this sense, “the Green Deal is clearly insufficient to compete in this race. There is a risk of missing opportunities. To maintain its position in the global race to net zero, it is time to turn the European Green Deal into a grand reindustrialization plan, keeping in mind that to achieve the climate goals of the Paris Agreement, investments would have to be increased by up to 10 % annual”. For her part, Ana Barreira, founding director of the International Institute of Law and Environment (IIDMA) recalled that, in the case of the EU, it is demonstrated that policies alone, without greater investments and correct incentives, will make it difficult to achieve their goals. climate change mitigation objectives.
In this long race, Japan and India are still far behind, while the US spares no resources in research and development, bent on its personal rivalry with China. One thing is certain: whoever will reach the goal first will dominate the economy that comes on Earth, without necessarily having to go to space.
