Sign Up for My Free Newsletter Subscribe

China and Green Electricity: The Origins

01.26.25 | Blog | By:

The West is increasingly concerned about China’s dominance in green electricity production and electric vehicle (EV) technologies. Could this signal the return of geopolitics and protectionism after decades of globalization? Or is it because the capitalist, profit-driven West failed to recognize early enough the value proposition—at least for a planet under severe climate change—of the electrification of the economy?

China’s role in green electrification cannot be denied: 80% of solar cell exports, 50% of lithium-ion battery exports, and 60% of wind-based power generation equipment worldwide are produced by Chinese manufacturers. However, this role cannot be reduced to a simple expansion of the country’s industrial catalog. This status began a few decades ago when China opened up to free trade, flooding global markets with cheap, low-tech products, but it quickly climbed the technological ladder. A strategic agenda underpinned this development: namely, addressing critical issues of energy security and air quality in large cities.

Though China is named and shamed for its reliance on coal, ranked first for imports and power generation (see chart below), and the subsequent massive GHG emissions, the country has an agenda to become a net zero emitter by 2060, drastically reducing fossil reliance across the next decades and increasing electrification.

Source: DNV, 2024

The Role of Renewables

As for electricity, increasing the role of renewables, mostly solar- and wind-based, provides diversification, but does not exactly lead to full energy autonomy and security. Production equipment requires materials, like cobalt or manganese, that must still be imported. Now, it seems China has to an extent secured the supply chains to procure those essential parts of the future energy system, through the Belt & Road Initiative, for instance. And these supply chains seem to involve countries a bit less geopolitically problematic than those involved with fossil fuels, or easier to deal with, at least for today, geopolitics being notorious for shifts and changes.

Source: DNV, 2024

Electric Vehicles in China

What about EVs? Supporters of electromobility, such as the International Energy Agency and carmakers that have invested hundreds of billions in Renminbi, Euros, or Dollars to produce EVs, frequently highlight their enthusiasm for the EV penetration rate on Chinese roads—projected to reach 45% of new car sales in 2024, as shown in the graph below—and wish Europe and the U.S. would embrace a similar surge in EV adoption. However, this has yet to happen, with the early 2020s’ enthusiasm waning by 2024.

Source: DNV, 2024

One key reason for this disparity lies in differing political and societal contexts.

In China, up to ten years ago, air quality in large cities was becoming a major source of resentment, causing health acute problems, for affected populations, an intolerable unstable situation for the government. The EV proved a comprehensive solution, cleaning air first and foremost, but also providing administrative burden relief to green license plate holders (EV owners) in quite car-crowded cities, and relegating noxious emissions from coal-based electricity production in the more remote areas. This eventually provided satisfaction to millions of urban citizens, promotion to politicians having met such objectives, thus helping the survival of the political regime.

In Europe or the U.S., the air quality in main cities may not be as good as wished, or even as required by regulations, but is nowhere close to a major issue on the scale of social discontent at large. The political agenda is rather dominated by such subjects as inflation-related loss of spending power, unemployment and insecurity, end-of-the-month centered.

In democracies, politicians come and go according to the whim of voters, these days wooed by populists for which climate change, end-of-the-world matter, is not that popular. No surprise the EU Green Deal is challenged, not even mentioning what may happen in the U.S. in 2025. And no surprise either that pricey EVs are not the immediate choice of the motorists wishing to buy a new car. Even politicians, all of a sudden realizing globalization has rhymed with de-industrialization in the West, with related unemployment and supply insecurity, both socially sensitive, start placing hurdles in the way with regards to imports of cheap Chinese EVs.

Fragmentation Is the New Normal

Low-carbon solutions, such as electromobility, may be applicable everywhere on the planet, but the conditions for their fast development depend on the local context, societal acceptance and social justice being key for policy and behavioral changes of this scale. Gone are the times when new technologies, like electricity or internal combustion engines, could become naturally hegemonic. Fragmentation is the new normal for the 21st century. Even though climate change does not recognize borders.

Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and  Innovation Platform (ETIP).