{"id":13113,"date":"2023-10-09T06:30:44","date_gmt":"2023-10-09T06:30:44","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=13113"},"modified":"2023-10-16T13:21:16","modified_gmt":"2023-10-16T13:21:16","slug":"chinas-essential-role-in-green-transition-supply-chains","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/chinas-essential-role-in-green-transition-supply-chains\/","title":{"rendered":"China\u2019s essential role in green transition supply chains"},"content":{"rendered":"

Global affairs writer and researcher Timothy van Gardingen<\/strong> explores China\u2019s major role in the world\u2019s renewable energy infrastructure<\/h2>\n

At the 75th General Assembly of the UN, China announced that it was committing to reaching peak carbon emissions by 2030 and carbon neutrality by 2060. President Xi Jinping called for all countries to commit to innovative green development, stating that exploiting the environment with little concern for conservation was no longer an option.<\/p>\n

Beijing is still thought of outside of China as one of the most polluted places on earth, but PM2.5 emissions \u2013 the main issue for the city \u2013 are a third of what they were a decade ago, with the falling trend continuing. The skies have turned blue, and we can, in part, attribute this improvement to China\u2019s huge investment in green energy, a field in which the country has rapidly become a world leader. This has resulted in it becoming effectively essential to global green energy supply chains.<\/p>\n

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PV energy supply chains<\/h4>\n

No sector highlights China\u2019s centrality to global renewable energy more than the solar energy industry. China currently supplies around 90% of the world\u2019s photovoltaic modules, giving the country tremendous leverage over future energy markets globally.<\/p>\n

If you need tangible evidence of China\u2019s investment in renewable energy, look no further than Golmud Solar Park in Qinghai province. With a capacity of 2.8 gigawatts, it is the largest solar power plant in the world. It is, however, not the only mega solar power plant in the country. The Tenger Desert Solar Park in Ningxia province has a capacity of 1.5 gigawatts and spreads across 43 square kilometres.<\/p>\n

China is the world\u2019s largest exporter of renewable energy infrastructure, responsible for 90% of the global photovoltaic cell supply\u00a0and 50% of wind turbines. This means that China is absolutely essential to the global renewable energy market. With increasing pressure from international organisations such as the IPCC to take the climate crisis more seriously in at least the short to mid-term, China is effectively the green energy transition factory until other countries grow their renewable energy manufacturing sectors.<\/p>\n

The pace at which China has become the key player in global PV supply is as startling as its current scale. A report from the International Energy Agency<\/a> (IEA) shows how, between 2010 and 2021, China\u2019s share of global demand skyrocketed from 3.5% to 36%. Meanwhile, former spearhead Europe toppled from representing 80.4% of global demand to a mere 16.8%. Over the same period, the share of every core element in the supply chain has become concentrated in China.<\/p>\n

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Source – IEA<\/p><\/div>\n

This pole position was achieved through a number of factors, the first of which is huge investment. China was responsible for nearly half of global clean energy investment in 2022, investing US$ 546 billion. The EU, as the second largest spender on clean energy, invested US$ 180 billion, less than a third of China\u2019s total.<\/p>\n

Then comes economies of scale. China has fulfilled a role as \u2018the world\u2019s factory\u2019 for decades now and has formidable manufacturing expertise. It also has the space to build infrastructure at a scale unfeasible for most countries, as proven by its PV mega projects.<\/p>\n

China\u2019s geographical size and characteristics mean it has an abundance of the raw materials essential to PV components. The charts above from the IEA show, for example, how China has increased its production of polysilicon to over three quarters of the global supply. Data from Statista show that 98% of Europe\u2019s rare earth imports (which it does not produce itself) originated from China in 2021.<\/p>\n