Jakarta — Europe risks falling behind in the global race to lead the net-zero industrial era as China and the United States gain momentum, warns a new report by Strategic Perspectives, a pan-European think tank, the group said in a statement on Monday, October 14. The report, titled “The Global Net-Zero Industrial Race Is On: A Wake-up Call for a Powerful Clean Industrial Deal,” urges the European Union (EU) to adopt a more aggressive strategy to maintain its competitive edge.
The analysis, released as the new European Commission and Parliament shape their priorities for the next five years, underscores the urgent need for a coordinated Clean Industrial Deal to counteract increasing competition from China and the US.
According to the report, the EU remains the second-most attractive destination for net-zero investments, securing USD334 billion in 2023, or USD76 billion more than in 2022. While Europe is still ahead of the US, it faces growing pressure from China, which accounted for 39 per cent of global net-zero investments (USD654 billion) this year.
China has not only dominated the solar industry but now controls 60 per cent of the global wind energy value chain. The report highlights that Beijing’s plans to multiply battery production fourfold by 2030 could further flood the market with Chinese-made green products, threatening the EU’s industrial ecosystem.
“Europe is trailing in a three-way race with two giants,” said Neil Makaroff, Director at Strategic Perspectives, adding that without decisive collective action, Europe risks losing its leadership position in cleantech to China’s manufacturing dominance and the US’s technology-driven growth.
The report reveals that the US is emerging as a leading force in clean energy innovation, attracting over one-third of global investment in clean energy start-ups. This technological advantage, combined with more affordable energy prices, widens the gap between Europe and its transatlantic competitor.
While some European countries are making significant strides, such as Poland becoming a hub for cleantech manufacturing and Spain and Denmark leading in wind energy, the report warns of growing disparities. Germany and France captured 45 per cent of the EU’s total net-zero investments, raising concerns about a “two-speed Europe” where some nations pull ahead while others struggle to keep pace.
“No single EU member state can win this race alone,” the report argues, emphasising the need for a unified strategy.
EU Commission President Ursula von der Leyen’s recent proposal for a Clean Industrial Deal is highlighted as a timely response to reposition Europe’s industries in the net-zero era. This plan, which combines regulatory reforms with a new Competitiveness Fund, aims to boost strategic investment, innovation, and the production of EU-made products.
“Opening cleantech factories in Europe and decarbonising existing industries are one of the most important missions of the Clean Industrial Deal,” Makaroff stressed. He said, “this can only be delivered through massive strategic EU investments, innovation, and support for EU-made products”.
Strategic Perspectives also highlights the EU’s energy vulnerability as a key concern. According to Aymeric Kouam, an energy analyst at the think tank, Europe’s dependence on fossil fuel imports has kept energy prices significantly higher than those in the US and China, hampering competitiveness.
He said that to close the gap with global competitors “zero-emission electricity should be a pillar of a Clean Industrial Deal to ensure the EU’s competitiveness and economic resilience”.
The report concludes that unless the EU mobilises sufficient investments and adopts a coordinated industrial strategy, its position in the net-zero race will weaken. With China and the US surging ahead, the report calls for European leaders to safeguard the continent’s economic future decisively. (nsh)
