What's Happening?
China's clean energy initiatives are significantly impacting global carbon emissions, with exports of clean-energy technologies in 2024 reducing emissions outside of China by 1%. The country's extensive supply chains and large market have positioned it as
a leader in solar power, wind power, electric vehicles, and energy storage. This leadership has contributed to a decrease in global average costs of electricity from solar and wind, making clean energy more affordable worldwide. In 2024, global renewable energy investment reached $807 billion, with China accounting for 80% of global investment in manufacturing facilities for solar, wind, battery, and hydrogen technologies. Despite a 7.3% slowdown in clean power growth, investments in battery factories nearly doubled to $74 billion, reflecting rising demand for storage in grids, electric vehicles, and data centers.
Why It's Important?
China's role in the global green transition is crucial as it helps reshape carbon trajectories in multiple regions, supporting their move toward carbon neutrality. The affordability and accessibility of clean energy technologies are vital for developing economies, which often face high upfront costs for green technologies. China's innovation and large-scale manufacturing have broken barriers, allowing these countries to benefit from the global green transition. The reduction in global emissions due to China's exports highlights the importance of international cooperation in addressing climate change. As China continues to invest in clean energy, it sets a precedent for other nations to follow, potentially leading to more sustainable global energy practices.
What's Next?
China's green trade is evolving from single-product exports to full supply-chain greening and integrated green solutions. Chinese green tech firms have pledged over $210 billion in foreign investment to expand their supply chains abroad and capture new markets. This includes investments in overseas factories in more than 50 countries, such as battery plants in Germany and green hydrogen projects in Uzbekistan. However, the rise of green trade faces challenges from growing protectionism, which could slow the spread of green technologies and limit access for developing countries. Experts call for expanded international and multilateral engagement in the green sector to leverage China's clean-energy technologies for global benefit.
Beyond the Headlines
The global governance of green trade is closely linked to achieving sustainable development and addressing climate change. Despite strong momentum in the green transition, trade barriers and protectionism pose significant challenges. Tariff peaks on environmental goods remain high, and overly strict environmental standards may act as trade barriers. Expanding international cooperation and technical exchanges are essential to overcome these hurdles and ensure that all countries can benefit from the global green transition.
