Europe must be ready to pay more to lessen green tech dependence on China – utilities

Europe is heavily reliant on China in realising its green ambitions and must be prepared to pay more for the shift to climate neutrality if it wants to increase independence, German utilities said. "If we want to achieve strategic sovereignty for the energy transition, we must be prepared to pay a kind of insurance premium," said Kerstin Andreae, head of industry association BDEW. She said Europe had many options to lessen its dependence, including local content regulations and targeted investment subsidies; strategic raw material partnerships; and the establishment of a European “raw materials bank,” which purchases important raw materials. “A revitalisation of raw materials extraction in Europe and a consistent focus on a circular economy based on recycling and reparability could also make important contributions to increasing resilience," Andreae added.

In a discussion paper, BDEW said Europe’s dependence on individual supplier countries for crucial energy transition technologies was particularly evident in the case of photovoltaics. “Here, China is dominant at all stages of the value chain.” But the lobby group said China also controlled large parts of the value chain for permanent magnets for wind turbines and electric drives, for batteries used in electric vehicles and storage, as well as for cables and control technology. To reduce the “worrying and critical” dependencies was a task for society as a whole, not just for the energy industry alone, the group argued. “Accordingly, the costs should not be borne by the energy industry and its customers alone, but should be distributed in solidarity as part of an insurance solution for society as a whole,” BDEW added.