January 17, 2025 

A massive airship hovering 1,000 metres above a research base in Jiangxi province successfully generated over 100 kilowatts of electricity on 14 January, breaking two world records.

The airship, known as the “power station in the sky”, uses a helium-filled balloon to lift a lightweight generator into the sky, where it harnesses wind energy at high altitudes. The electricity generated is then transmitted back to the ground via tethered cables. It broke the industry world record for maximum launch height of a floating wind power system, as well as for maximum power generation by a single airship, reported Science and Technology Daily.

This innovative system holds potential for applications in emergency rescues, mapping, security for urban areas, and communication support, the newspaper reported.

Last October, a smaller version of the airship was launched which reached an altitude of 500 metres and successfully generated electricity. It broke the altitude record then held by an MIT startup, whose airborne wind turbine hovered 1,000 feet (305 metres) above ground for 18 months.

The availability of land to host traditional wind farms has been diminishing in some countries. Traditional wind farms require large amounts of space to generate a megawatt, and ideal locations get snapped up first. “The first [wind] farms are in the best spots, and the best spots are limited,” noted Cristina Archer, director of the University of Delaware’s Centre for Research in Wind. Given these limitations, high-altitude wind energy has been gaining attention as a possible alternative.

Globally, several countries are making strides in developing airborne wind energy systems (AWES), which use flying devices tethered to ground stations to harvest wind energy at high altitudes. The UK’s University of Bristol is conducting research on an AWES that uses drones to generate power. The system, in which drones fly in specific patterns against strong winds, requires precise control in order to prevent the drones from crashing back down to the ground. The research seeks to lower operating costs and improve AWES’ performance for commercial use.

In 2021, German company SkySails Power launched the world’s first fully autonomous commercial AWES in Mauritius. Taking the form of a large sail in the sky, the company claimed that the system nearly approached its target of generating 100 kilowatts – enough to provide power for 50 households – in two months. While this only meets a small portion of local demand, the company viewed it as a sign of the technology’s potential, noted the BBC.

(Sources: Dialogue Earth)

Amid accusations of fraud, lax auditors and problematic offset certifiers, is the carbon credit market still… credible? 

By Shi Yi, December 19, 2024

During the past few years, global voluntary carbon markets have been thrown into crisis by fraud and quality scandals. Verra, a major certifier of carbon emission offsets, announced in August that it was rejecting 37 Chinese rice cultivation projects and revoking issued carbon credits, due to quality concerns. Some of the credits from these so-called “phantom” projects had already been procured to offset greenhouse gas emissions by major companies, like Shell and China National Petroleum Corporation. But evidence seen by Dialogue Earth indicates something more serious than quality concerns: some of these projects never existed.

Experts say any forthcoming reforms of emissions-reduction methodologies and oversight processes should be accompanied by a return to the basic principles of carbon offsetting: it is a contribution to global action on climate change, not a way to offset a company’s avoidable emissions.

Farming in the dark

Three farmers in eastern Anhui province, China, could hardly have imagined their rice fields would be linked to some of the world’s largest energy companies. Shell, for example, used carbon credits from their fields to offset greenhouse gas emissions from “23 LNG [liquefied natural gas] cargoes between January 1, 2022, and December 31, 2023”. This enabled Shell to label the shipments as “carbon neutral.”

Rice farmers in Asia commonly grow rice in flooded fields – rice grows well in such conditions, weeds do not. However, these anaerobic soil conditions lead to the production of methane, a particularly potent greenhouse gas. In 2018, rice cultivation in China produced almost 9.33 million tonnes of methane – or 39.1% of the country’s total agricultural methane emissions. That made rice the second-largest agricultural source of the gas, after livestock farming.

Rice cultivation projects under carbon credit schemes aim to tackle this by promoting intermittent drainage, also known as alternate wetting and drying, which reduces methane emissions.

According to documents concerning the development of these projects, the rice fields of the three Anhui farmers were part of separate projects. The documents claim alternate wetting and drying was being used to reduce emissions. But the farmers tell Dialogue Earth that nobody had spoken to them about alternate methods to cut emissions, nor had they heard of carbon trading. Among the three, only one farmer (from the city of Tongcheng) had tried intermittent drainage, and only then in one small area while continuing with traditional methods elsewhere.

The farmer from Tongcheng says the local agricultural bureau tried to popularise alternate wetting and drying about a decade ago, but with a different type of rice: “It was voluntary then; they just said it could be tried in fields that are harder to irrigate.” But, he adds, the yields from the new type of rice were not so good, which would mean less income. “I tried the method on several mu [a Chinese measurement of area; 15 muis approximately one hectare]. The rice was tasty, and I still grow some for my family, but otherwise I stick to the old way.”

Anhui is one of China’s major rice-growing regions. In Tongcheng, the fields are spread across hillsides and plains. In this land of rivers and lakes, farmers do not usually fret about water supplies. However, the farmer told us shortages can occur in very dry seasons, which have been particularly bad in recent years. Local advocacy of alternate wetting and drying is mainly aimed at relieving those worries.

The 37 rice projects in question were all green-lit by auditing firms used by Verra. Each project supposedly started at some point between 2018 and 2020. Verra has said it started a quality control review at the end of 2022, the results of which were announced this August. In Verra’s words, it ultimately “applied strong censures to the auditors that had reviewed [the projects’] applications.”

According to a company spokesperson, the identified concerns about quality covered: the accuracy of baseline figures used; the activities that projects claimed had been undertaken, and the sufficiency of followed practices; and the evidence that Verra’s chosen independent validation and verification bodies (VVBs) provided when verifying projects. The spokesperson did not comment on how many projects were actually implemented.

Over the past two years, however, the carbon credit ratings firm Ecoptima spotted unusual patterns in these projects during big data analysis. Upon reaching out to over 70 agricultural authorities and other relevant departments, Ecoptima was told no Verra-registered, rice cultivation carbon credit projects existed in their jurisdictions. In some cases, no agencies had been authorised to carry out such projects.

Based on written governmental responses seen by Dialogue Earth and the outlet Climate Home News, at least 19 of the 37 rice cultivation projects rejected by Verra appear to be “phantom” projects. Beyond Shell, companies such as PetroChina International Company Limited and the United Kingdom’s OVO Energy also purchased credits from these projects. Furthermore, 87 other projects awaiting carbon credit certification raised similar concerns.

Together, these projects account for nearly 40% of all rice cultivation projects in China that are seeking Verra certification. They span 13 provinces and municipalities, with claimed annual emissions reductions exceeding 57,000 tonnes of CO2 equivalent per project.

A phantom project template

Project documentation reveals the offset schemes in question were all organised and managed in very similar ways. They were typically set up as a partnership between a local agricultural company and a carbon trading consultancy. They always claim cooperation with, or support from, the local agricultural bureau. The local agricultural company, or an agricultural technology research body, trains local farmers and monitors project quality. The new irrigation techniques require closer management of water, so there is also always a promise from the development company or local government to invest in improved irrigation systems – necessitated by China’s high rural development standards.

In the several cases mentioned above, the works to improve irrigation systems described in project documents did not exist either. A farmer in Tongcheng says they are still using the same irrigation system they have had for decades: knocking holes in dykes around the fields to flood them, filling the holes in again to dry them out. Another farmer tells Dialogue Earth that improved systems had been installed, but the dates did not match up with those claimed by the project.

The project documents indicate all these schemes have gone extremely smoothly. A single stakeholder meeting attended by local farmers has usually been enough to get the green light. For example, the Tongcheng project document says the meeting taught farmers about the benefits of alternate wetting and drying and – despite almost none of them being familiar with carbon trading or voluntary carbon standards – they were all supportive.

Rice farming realities

The farmers we interviewed all say their main concern about following different methods is whether it would affect their yield or income. Two farmers in Tongcheng point out that alternate wetting and drying has never been widely applied locally, because it makes less money.

The Pesticides Eco-Alternative Center is an NGO that works to popularise lower-emissions rice cultivation techniques in Yunnan, southern China. The group’s director, Zuo Zhi, says such techniques can provide stable and even higher yields. But sometimes, initial investment is needed.

Zuo has found that where good irrigation systems are lacking, farmers can be unsure of when to wet and when to dry their fields. Sometimes, after wetting the field, they prefer to leave it wet in case of water shortages later.

Furthermore, Zuo points out that because farmers face varying conditions across China, approaches and techniques need to be tailored to local needs.

Another complication is that, because younger members of the community have found work in the cities, much Chinese farmland (particularly in the south) is managed by older people. “For them, the idea of reducing emissions seems very distant from daily life. We usually talk to them in the context of achieving stable or higher yields as the climate changes,” explains Zuo.

Verification failures

On the voluntary carbon market, project developers run their projects according to methodologies certified by standard-setters, like Verra. Such firms rely on external VVBs to ensure the project is implemented to the required quality. These VVBs must be certified by Verra, submit to assessments, and strictly uphold standards to maintain the system’s credibility. However, this “two gatekeepers” system has been shown to have failed several times. Faith in the markets has duly tottered.

In early 2023, three news organisations, including the UK’s Guardian newspaper, published the findings of a nine-month investigation: ninety per cent of Verra’s rainforest carbon offsets had exaggerated their actual emission cuts.

In November this year, a synthesis study surveying over 2,300 carbon-mitigation projects worldwide found less than 16% of the associated carbon credits represented actual emissions reductions. Those project types included cleaner cookstoves, the destruction of the greenhouse gas sodium hexaflouride, and the abatement of another, hydrofluorocarbon-23. The synthesis covered carbon credits equivalent to almost a billion tonnes of CO2, which its authors claim is approximately one-fifth of all carbon credits issued globally to date.

The study’s authors point out that the quality of carbon credits is determined by the robustness of the standards used, the strict implementation of those standards during project implementation, and the strength of oversight from auditors and the carbon-crediting mechanism. Under the existing model, one potential problem is that project owners choose and pay auditors. This may lead auditors to take a more relaxed approach to obtain customers.

Last year, Climate Home News published its satellite imagery analysis of the rice fields where Shell’s carbon offsets originated. They discovered the fields had been divided up into smaller plots, which would avoid the tougher rules in place for larger projects.

One expert in carbon trading in China tells Dialogue Earth that, in the past, it was an open secret that auditors would work to find ways for projects to “meet” the requirements of the crediting body.

Rethinking carbon credits

Dialogue Earth consulted Jonathon Crook, a global carbon markets policy expert for the research organisation Carbon Market Watch. He points out that these risks could be reduced if the offset certifier – rather than the project owner – designated auditors.

After identifying problems with its rice cultivation projects, Verra attributed part of these mistakes to flaws in the methane emission-reduction methodology it was using. Named AMS-III.AU, the methodology is a part of the UN Framework Convention on Climate Change’s Clean Development Mechanisms methodology. In March 2023, Verra suspended all project development under AMS-III.AU and started developing a new methodology. Verra also instructed four of the implicated VVBs to generate corrective action plans.

As a result of Verra’s AMS-III.AU cancellation, over 200 further Chinese rice cultivation projects, all being processed for Verra certification, had their applications halted.

Responding to our request for comment, a Verra spokesperson said the four VVBs had failed to meet their required levels of independence and rigour: “This unprecedented situation was serious enough to warrant sanctions that could result in the suspension of Verra’s approval for the VVBs to continue auditing Verra projects.” Verra also said it is evaluating the response and action plans of the four bodies. To date, however, there has been no change to their certification status.

Chen Zhibin, senior manager for carbon markets and pricing at the Berlin thinktank, Adelphi, tells Dialogue Earth that improvements in carbon markets need to take place at both the supply and demand ends. The supply end could manage the continual improvement of emissions-reduction standards and project quality.

For example, in 2023, the Integrity Council for the Voluntary Carbon Market published its Core Carbon Principles, designed to assess if voluntary emissions-reduction mechanisms and related methodologies are up to standard. Those that meet the standard earn a CCP mark. Chen says this “dual assessment” (of both mechanisms and methodologies) could help the market identify more credible carbon credits.

At the demand end, meanwhile, businesses could be steered towards better use of carbon credits. Chen says that would entail “identifying which emissions can be avoided and only using carbon credits to offset those that cannot.”

According to Crook, the solution to current problems with the market lies in abandoning the unrealistic aim of quantifying the emissions offset by every project, which mainly leads only to corporate “greenwashing”.

“For companies and buyers, carbon credits would be purchased as contributions to global climate action rather than offsets for emissions,” he says. “The contribution approach … is a sorely needed replacement to the outdated and error-prone offsetting approach.”

Organisations have a mixed outlook on what the transition to electric vehicles, and an influx of Chinese imports and investments in factories, mean for workers. 

By André Duchiade, January 9, 2025

The rapid expansion of the market for electric vehicles in Brazil, particularly Chinese cars, is transforming the country’s automotive industry and could have an impact on workers and production chains, say Brazilian trade unionists in the sector.

The share of electric and hybrid vehicles among new registrations in the country has already grown from 4% between January and October 2023 to 7% in the same period in 2024, according to the National Association of Motor Vehicle Manufacturers (Anfavea). 

These EVs are imported into Brazil, but several automakers have invested in production within the country. In addition to established brands such as Volkswagen and Toyota, China’s Build Your Dreams (BYD) and Great Wall Motors (GWM) are preparing to open factories in Brazil.

In 2021, GWM acquired a plant owned by Mercedes-Benz in Iracemápolis, in the state of São Paulo, where it plans to start manufacturing hybrid vehicles in 2025. In 2023, BYD bought a factory that Ford had operated for two decades in Camaçari, in the north-eastern state of Bahia, and also plans to begin production this year, though controversies around the conditions for workers at its site led to construction being paused by Brazilian authorities in late December.

As well as relying on imported components, the manufacture of electrified vehicles uses far fewer parts than combustion engine models and requires specific skills. Chinese companies are promising thousands of new jobs in Brazil, but unions in the traditional automotive industry are expressing concerns.

To ensure a fair energy transition – with fewer combustion-engine cars, but without excluding those working in the industry – they say Brazil must take ownership of the production chain and invest in retraining its workers.

“We demand that production processes guarantee jobs and the development of [EV] technologies in Brazil. If not, we’re going to destroy our factories,” said Aroaldo Silva, president of IndustriALL-Brazil, an umbrella organisation bringing together two national trade union federations, CUT and Força Sindical, and representing ten million workers in manufacturing.

In contrast, trade unionists in the cities that will receive the new facilities are optimistic. “There have been the best expectations,” said Júlio Bonfim, president of the Camaçari Metalworkers’ Union.

According to Bonfim, BYD’s initial estimate was to produce 50,000 cars a year, generating 3,000 jobs. Later, the projections were increased to 5,000 jobs, then to 10,000, accompanied by an annual production of 300,000 vehicles. “This is what we produced at Ford’s peak [at Camaçari] between 2008 and 2009,” said Bonfim.

In its own communications, BYD affirms these projections and says it wants to turn Camaçari into a hub to attract suppliers from the entire electric vehicle production chain, including parts and accessories. It even promises to establish in the city the company’s first lithium battery production unit for EVs outside of Asia, with production initially scheduled to begin in 2025.

GWM, meanwhile, plans to create 700 jobs and produce 50,000 vehicles annually within three years. The operation in Iracemápolis will produce components such as tyres, windows, wheels, seats and wiring harnesses. The company says that its goal is to achieve 60% of these items being produced in Brazil in that same period, and then begin exports to other Latin American countries.

Rapid entry of imported EVs

The automotive sector is a notable contributor to Brazil’s economy and employment. The production of cars, vans, buses and lorries employs more than 107,000 people across the country, according to October figures from Anfavea. This is the highest figure in five years, but still below the national peak of 135,000 in 2013. More than ten factories, including operations run by Honda and Toyota, have closed since 2015.

Brazil’s economic crisis of 2014-16, and the shocks and stagnation that have shaken the country in the decade since, are seen as the main cause of the downturn, but unions also blame tax incentives for imported electric vehicles. In 2015, the Dilma Rousseff government (2011-2016) zeroed the import tax on electric cars and reduced the rate for hybrids. The exemptions created unequal competition with the Brazilian market, these groups claim.

“BYD came with a very aggressive proposal for low-cost electrics and hybrids,” said Wellington Damasceno, executive director of the ABC metalworkers’ union, which represents workers in the São Paulo metropolitan region. In 2022, BYD began selling its electric vehicles in the Brazilian market with the launch of the Dolphin model.

According to Anfavea, sales of Chinese cars in Brazil rose from 7,052 in 2022 to 41,288 in 2023, driven by electric and hybrid vehicles. And in May 2024, Brazil became the main overseas market for Chinese EVs, as Reuters reported.

“Although the volume is not that significant, in percentage terms, it is growing stratospherically,” said Warley Soares, an economist at the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese).

Chinese makers’ share of vehicle sales in Brazil jumped from 7% in the first half of 2023 to 26% in the same period in 2024. Among the five largest electric vehicle manufacturers that led sales in Brazil in the first quarter of 2024, three are Chinese, and one – Sweden’s Volvo – is now majority Chinese-owned.

“If production isn’t consolidated in Brazil, this volume, which today doesn’t affect jobs, will start to do so,” suggested Soares.

Following calls to protect the domestic automotive industry in the wake of this strong entry of Chinese vehicles into the Brazilian market, the national government announced at the end of 2023 a gradual resumption of import taxes for electric and hybrid vehicles, with rates set to return to 35% by July 2026.

Amid international tensions and increasing moves towards protectionism, raising tariffs on imported electric vehicles has been a prominent issue in international politics in recent months. In October, the European Union raised the import tariff on Chinese EVs from 10% to 45%, while Canada increased its own tax on these vehicles to 100%.

This is the same rate applied by the United States since May. The US President-elect Donald Trump has pledged to further tighten tariffs on Chinese products. Meanwhile, analysts believe that Beijing is preparing to retaliate against Trump’s policies, in an intensifying trade war which could have significant impacts on global production chains.

Between hopes and fears

For Brazil’s trade unions, doubts remain over the extent to which foreign carmakers will ultimately manufacture their EVs in the country.

“We’re a bit sceptical as to whether there will actually be domestic production, with the entire production process taking place on Brazilian soil,” said Silva, from IndustriALL-Brazil. He fears that companies will use what is known as complete knock-down (CKD), in which parts manufactured and supplied from abroad are assembled in another country. “It’s like a Lego. CKD creates unfair competition,” he suggested.

There are also concerns about the reduction in the parts needed for electric vehicles and the impact this may have on workers in their production. “An electric car has around 60% fewer components. They don’t have a timing belt, clutch, alternator, fuel pump,” said Soares, from Dieese, pointing out that a large production chain currently produces these parts for combustion vehicles in different parts of the country. “They will no longer be produced, and that will generate unemployment,” he argued.

In order to preserve jobs, Silva emphasised that it is essential to develop new production chains in Brazil: “We don’t produce anything in the battery chain, for example. What’s more, we’ve already got rid of the electronics chain in vehicles. EVs have more robust on-board electronics, and we need to reorganise this chain here.”

However, there remains no consensus on the impacts of fewer parts on the workforce in the electric vehicle industry. A study from the University of Michigan, published in September, indicated that assembling EVs may ultimately require up to ten times more workers compared to traditional vehicles. Another one, published in the journal Energy Policy in March, suggests that in addition to requiring more professionals, the manufacturing of EVs could absorb workers from the combustion engine industry.

Bonfim, from the Camaçari union, believes there will be progress in expanding Brazil’s industry’s presence in the EV production chain, and that BYD’s investment could be notable in this. “Ford’s plant is monstrous, it’s being completely redesigned, and the company [BYD] has even bought a 1.5 million square metre plot next door,” he commented. “Nobody makes an investment of this size to produce only CKD or SKD [semi-knock down].”

He adds that, so far, the union’s negotiations with BYD have been positive. But the company itself has encountered challenges. A report by Agência Pública, an investigative media outlet, revealed that Chinese workers from outsourced companies have been working up to 12 hours a day at the Camaçari construction site, without weekly breaks or protective equipment. There are also reports of physical abuse, lack of drinking water and degrading accommodation.

Following the complaints, BYD said it had cancelled the contracts and demanded action from those responsible. On 23 December, the national Labour Prosecutor’s Office said it had halted construction at the site and rescued 163 workers following its own investigation, with BYD and contractor firm Jinjiang Group reportedly now assisting in re-housing those affected in hotels until the end of their contracts. Jinjiang Group has contested the description of “slavery-like conditions” for the workers.

Speaking to Dialogue Earth in November, Bonfim declined to comment on the issue, saying that this was the responsibility of the construction union and not the metalworkers’ union. Regarding the presence of Chinese employees in the construction of the plant, Bonfim said that this usually happens in the early stages of the process. “When Ford started [operating in Camaçari] in 2001, it was full of Americans,” he said. “Nobody knows how to start up a hybrid and electric car factory, so Chinese people will have to do it.”

Urgent public policies

Damasceno, from the ABC metalworkers’ union, argued that the main strategy for a just transition in Brazil’s automotive sector is to diversify the vehicle technologies used in the country. He points out that Brazil already has a thriving biofuels sector, including combustion ethanol, biodiesel, biogas and biomass, as well as the possibility of incorporating green hydrogen – an area in which Brazil has already launched cooperation with China.

“The country has several options and can take advantage of their potential,” said Damasceno. “We would have a more gradual transition and a greater chance of converting current capacities to a new industry.”

Although the transition from combustion to electric vehicles could result in a model with fewer jobs and greater specialisation, low-carbon sectors can generate new jobs, said Amanda Ohara, a researcher at the Institute for Climate and Society.

“The transition leads to the generation of new sectors that we can’t see clearly today,” said Ohara. “There’s the solar and wind industry, biofuels themselves, green hydrogen, green steel. If the investment is done well, these sectors can house part of the workers.”

All those interviewed by Dialogue Earth emphasise the urgent need for bolder public policies than the current ones to protect and create new jobs in Brazil in the face of changes in the sector. According to Damasceno, the government’s Mover programme, which encourages the decarbonisation of the Brazilian vehicle fleet, should incorporate best practices, such as retraining, and encourage companies to promote the strengthening of their domestic production chains.

Warley Soares, for his part, considers the BRL 28 billion (USD 4.6 billion) a year earmarked for the programme to be insufficient. “This is far too little for the demand required. We need policies that have the ambition to make Brazil a major export player for Latin America,” he said. “We’re losing ground to China [as a regional exporter], but from a logistical point of view it’s much more complicated to bring a bus from there than to produce it here.”

Compared to its other export industries, China’s cleantech is much less vulnerable to Trump administration trade measures. 

By Lauri Myllyvirta, Hubert Thieriot, January 9, 2025

Clean energy technology, particularly the “new three” of solar power, batteries and electric vehicles, emerged as an important source of growth in China’s exports in 2023. Thanks to booming markets at home and abroad, clean energy has become a key driver of economic growth.

A lot of media and policymaker attention is focused on possible US and European tariffs on China’s cleantech exports, with the perception that these could be a major blow to the  industry.

What is missing from this picture is that half of all China’s exports of solar and wind power equipment and electric vehicles (EVs) now go to the Global South, according to UN Comtrade data. Emerging and developing countries have driven most of the recent growth in export volumes.

In 2024, the value of EV exports from China to the Global South overtook those to the EU, with China’s exports to developed markets falling and those to developing markets posting strong growth.

As we will see, Global South countries collectively have been the largest importer of solar and wind power equipment from China since at least 2015, but the gap widened in 2023, when the volume of these solar imports from China grew 70% year-on-year.

The US is a niche market for China’s cleantech

Solar and other clean energy have gone global in the past decade. In 2010-2015, 70% of solar and 50% of global wind installation occurred in developed economies. By 2023, these shares had fallen to just over 20%.

The US now represents only 7% of the global market for newly installed solar power plants, and even the European Union and the US combined make up less than 20%.

The US has imposed tariffs on imports from China for a long time and, as a result, most of its supply already comes from other producers. Only 4% of China’s total exports of solar power and wind power equipment and EVs go to the US, compared with 15% of China’s overall exports.

This means that China’s cleantech exports are much less reliant on the US in particular and western markets in general than its export industries overall. In a market where sales volumes are growing at 30% this year, the US is a footnote.

While the majority of solar, wind and EV exports already go to the Global South, the US and the EU remain the dominant importers of batteries. These are intermediate inputs into vehicle production and other manufacturing. Targeting them with high tariffs would hurt local manufacturing.

Cleantech exports to Global South are booming

The falling reliance on developed markets comes down to China’s cleantech manufacturing boom having catalysed rapid deployment of solar, wind and EVs in the Global South. Around 47% of China’s exports of these products went to the Global South in 2024, a record-high share and close to matching exports to developed countries for the first time.

From 2021 to 2024, emerging and developing markets drove 70% of the growth in China’s exports of solar, wind and EVs, with seven of the ten top growth markets located in the Global South.

Examples include solar power booms in South Africa and Pakistan, and strong growth in for example Brazil and Thailand. The five largest importers of wind power technology from China are all developing countries – South Africa, Egypt, Chile, Brazil and Uzbekistan – as are the five largest growth markets for solar: Saudi Arabia, Pakistan, Uzbekistan, Indonesia and India. Two Global South countries also feature on the list of the five largest importers of EVs – Brazil and Thailand.

This trend is expected to continue. Emerging and developing countries are expected to have a market share of 70% in solar PV and 60% in wind and in battery storage during this decade out to 2030, according to the International Energy Agency’s World Energy Outlook.

The US and other developed country markets are more significant in electric vehicles, due to high private car ownership. Yet, in the IPCC 1.5 and 2C pathways, the share of the US and the EU in global investment in electrified transportation falls from almost 50% in 2022 to 36% by 2035, with two-thirds of the market growth coming from outside these two regions. If Donald Trump’s policies slow down the electrification of the transport sector in the US, the significance of these markets will diminish further.

China’s increasing efforts to increase clean energy lending and co-operation will also stimulate demand from the Global South. Examples of this include recently announced new green energy deals with Indonesia, increased financing of renewable energy projects such as in Africa and Central Asia, and increasing share of renewable energy in projects under the Belt and Road Initiative.

Decoupling efforts will have a limited impact on China’s cleantech industry

China’s dominance in clean energy manufacturing has caused some major economies to try to diversify or decouple their supply chains from it. The US and India have clearly committed to slashing their dependence on China. Even those two markets have a very long way to go to meet their own demand without relying on the East Asian nation.

For example, the solar equipment production capacity in the world outside of China is barely sufficient to cater to the US market, meaning there is little possibility for other buyers to switch to non-Chinese supply. India is adding a significant amount of production capacity for solar cells and panels, but capacity additions in the key upstream input, polysilicon, are much more modest.

It’s entirely possible for the US and India to build their own supply chains for solar. Yet the impact on China’s cleantech industry will be limited, as the two countries’ strategy for doing this relies on high tariffs to shelter domestic production. This means that their producers won’t be able to compete overseas, surrendering this market to China.

While the US and India already have policies in place, the EU is torn between conflicting impulses. The bloc needs clean energy technology to meet climate targets, reduce reliance on imported fossil fuels and bring down energy prices. The EU is concerned about reliance on China but lacks the industrial policy framework to address the issue, and will find it hard to match the US on spending. The bankruptcy of Swedish battery maker Northvolt, dubbed “Europe’s best shot at a homegrown electric-vehicle battery champion”, made this evident. The industrial and supply-chain policies needed to reduce the EU’s reliance on cleantech imports from China could yet emerge, but the bloc can hardly afford to slow down clean energy deployment during the long period that such policies would take to yield results.

As other major economies pursue diversification, Beijing should have little to complain about. It has largely ringfenced its own domestic cleantech market – by far the largest in the world – to exclude imported products. How this has been done matters. Tariffs raise the cost of the targeted technologies and therefore have the potential to slow down the energy transition. While China has used trade barriers, the main thrust has been supporting and subsidising domestic supply of cleantech, in the process driving down prices and speeding up adoption not just in China but globally.

China has a strong self-interest in the global energy transition

Given the minor significance of the US market for China’s clean energy industry, the only real risk from the Trump administration to the industry would be if he succeeds in slowing down global climate action. This seems unlikely, as clean energy adoption is driven by economics more than altruistic global goals.

Given the important role that clean energy technology plays in the country’s economy and exports, China has a strong interest in making sure the global energy transition keeps accelerating. That will be seen in bilateral lending and diplomacy, and could also lead the country to take more forward-leaning positions in multilateral climate negotiations.

Lauri Myllyvirta

Lauri Myllyvirta is senior fellow at Asia Society Policy Institute, China Climate Hub. He is also the lead analyst of Centre for Research on Energy and Clean Air.