Can US and EU unseat China as the dominant supplier of green energy tech globally? Highly unlikely, experts say
- Policies by the US and EU could catalyse their green tech industries, but they are unlikely to change the current global supply chain dynamics, EIU says
- Reshoring of businesses will inevitably increase the costs of solar panels and other mass-produced green commodities
China will dominate the global green tech industry well into the 2030s even as developed nations introduce policies to promote their domestic supply chains to cut reliance on the Asian nation, according to analysts.
“Despite attempts by the US, EU and other advanced economies to spur domestic manufacturing in green technology, China’s lead in many of these areas – particularly solar, wind and battery technology – will [see it] remain a key supplier for the technologies powering the green transition for at least the next decade,” said Matthew Oxenford, senior analyst at the Economist Intelligence Unit (EIU) in a study released this month.
The Inflation Reduction Act passed by the US Congress in August last year is widely regarded as a game-changer in global climate policy for not only providing large subsidies for green industry but also for incentivising domestically sourced raw materials and equipment to secure America’s position as a world leader in the clean energy supply chain.
The bill has prompted a spate of developed countries to approve similar legislations to enhance and protect the competitiveness of their own green tech industry, including the Green Deal Industrial Plan proposed by the EU early this year, and Australia’s National Reconstruction Fund passed in March.
The US and its allies’ subsidy programmes could catalyse their green tech industry development and boost domestic jobs, but are unlikely to change the current global supply chain dynamics, which China has dominated for so long, Oxenford said.
