As the world panics over the lack of fossil fuels, the numbers in the Chinese renewable sector they are vertigo. Shares in battery giant CATL have soared 29.5% on the Hong Kong stock exchange since the conflict began. For its part, electric vehicle leader BYD has seen its sales abroad skyrocket by 65% year-on-year in the month of March.
This wave of buying is not new, but it has accelerated dramatically: last year, Chinese exports of solar panels to Africa increased by 48%, sales of electric vehicles rose by 27%, and sales of wind turbines grew by almost 50%.
Survival and a career already over. The global turn to renewables at this critical moment is not driven solely by climate promises, but by a need for “energy security”. Fuel shortages in Asia have led vulnerable countries to take drastic measures: Indonesia’s president has announced the construction of 100 gigawatts of solar power over the next two years, while the Philippines is offering state loans of up to $8,300 to install home solar panels.
As an analysis by my colleague Javier Lacort points outthe West has been promising alternatives for years, but China “is not winning the battery race; it has already won it,” controlling more than 80% of global manufacturing. Companies like CATL and BYD have already announced or built 68 factories outside China, investing more money abroad than in their own country.
The rise of the “Electrostates.” The global landscape is being redefined. We are witnessing a contest between the traditional “Petrostates”, led by the United States, and the new “Electrostates”, anchored by China, which supplies more than 70% of all the green hardware in the world.
Excluded from the United States and Europe by protectionist measures, the Chinese solar industry has found its salvation in the Global South. Last year, Chinese manufacturers shipped 18.8 gigawatts of solar panels to Africa. Diplomatically and economically, the war will cement China’s superpower status. The disconnection of Middle East crude oil could even erode the dominance of the “petrodollar” and catalyze the beginnings of the “petroyuan”as countries like Iran negotiate the passage of ships in exchange for payments in Chinese currency.
Side B. Despite this overwhelming dominance, Beijing’s path has significant obstacles. In Africa, although cheap technology is welcome, alarm voices are growing about the creation of a new “dependency syndrome.” Some experts lament that while African countries see China as a savior, Beijing considers them a “dump” to get rid of its industrial overcapacity.
In the West, mistrust is even greater for reasons of national security. The UK recently vetoed Chinese manufacturer Ming Yang’s plans to build a wind turbine factory in Scotland, alleging risks of espionage or sabotage in critical infrastructure. At the same time, Donald Trump’s US administration has decided from the beginning to withdraw fiscal support for green energy and prioritize fossil fuels so as not to depend on supply chains controlled by foreign adversaries.
China is not invulnerable either.. Despite its renewable leadership, the country still imports 78% of oil that it consumes, and the Persian Gulf supplies almost half of those imports. The rise in the barrel is causing havoc due to cost inflation in its vital steel, aluminum and petrochemical factories, reducing its competitive margins.
A geopolitical choice. Precisely because this dependence on fossil fuels punishes everyone equally, the green transition has become a race of pure economic survival to shield national economies. The crisis triggered by the war in Iran shows that resilience is today the main driver of global change. As Fatih Birol of the International Energy Agency points outclean energies will accelerate not only because of emissions, but because they are a “national energy source.”
However, adopting this technology means choosing which side of the scale you want to be on. The energy transition is no longer a simple choice between fossil or renewable fuels. Today, the degree to which a country decides (or not) to rely on China will define its ability to decarbonize, making an environmental debate the most defining geopolitical decision of the next decade.
Image | Unsplash
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