The clean energy sector will add 320 billion dollars to the world economy in terms of added value in 2023, which represents another 10% of world GDP growth.

According to Allianz Trade, Europe and China have been leading the green transformation. However, while China's green investments continue to grow, reaching 676 billion dollars by 2024 (3.7% of its GDP), Europe's investment levels have begun to stabilize at around 500 billion dollars. They have even fallen in relation to their GDP from 1.9% to 1.8% in the last two years, after the start of the global energy crisis, the analysis reveals.

China, according to the study cited by Negócios newspaperAs a result, the company is able to achieve economies of scale and low costs of energy, capital and human resources, which allows it to increase the level of investment and therefore secure a dominant position.

In the case of photovoltaics, China is responsible for around 80% of the world's production of polysilicon, solar cells and modules, as well as 97% of silicon solar wafer production.

The current dominant position in the market is reinforced by recent developments in increasing production capacity. Estimates in this study suggest that, by 2030, China's ecological manufacturing capacity is likely to be 74% greater than that of the rest of the world. Of this amount, domestic demand is expected to account for only a third, meaning that the remainder will be destined for foreign markets, further strengthening China's position as the world's clean technology manufacturing powerhouse.

Faced with China's performance in manufacturing and trade, Europe has taken some green protectionist measures. The Allianz Trade study shows that in Europe the percentage of green imports from China has increased from 2.3% in 2014 to 13.6% in 2023. In contrast, in the USA this percentage remains much lower, at 4.6% last year, reflecting the protectionist policies adopted by the US authorities. Against this backdrop, Europe has been introducing customs measures to protect its green industries. Tariffs on Chinese electric vehicles are the latest example.

On the other hand, the European Union is also working to strengthen its green industrial policy with the aim of stimulating national production and safeguarding strategic competitiveness. In response to the US Inflation Reduction Act, which promised more than 360 billion dollars in tax credits, grants and loans to strengthen the production of clean technologies, recalls Allianz Trade, the EU's Green Deal Industrial Plan aims to increase the competitiveness of European net-zero emissions industry, with REPowerEU allocating more than 250 billion euros to approvals, tax incentives and workforce retraining.

However, protectionist measures aimed at supporting local industries can also pose risks for the energy transition and international relations, analysts point out. Isolationism could limit the production and export of goods essential to the global energy transformation, leading to higher prices and potential delays in the decarbonization objectives of economies.

For sustainable green growth, the study indicates, Europe must carefully assess which sectors can compete globally, where protection measures are justified and where creating barriers to green trade would do more harm than good. Wind energy and hydrogen are two key sectors in which Europe already has a strong position and can capitalize on the opportunities for green growth, especially if it starts to think beyond its borders, the study indicates.

(Photo DR)