Later this week, the European Commission will find out if member states support the just-announced European Union green industry deal. The plan is a direct response to recent steps by the United States to become a global green energy hub that allies feel are protectionist. The rivalry isn’t just transatlantic. The US and the EU are also trying to cut their reliance on China – a dominant force in the production of electric vehicles (EVs) and batteries, solar panels, wind turbines and the raw materials to make these items. China is the world’s top renewable energy investor and exporter and wants to keep it that way.
The danger, though, is a trade war that fragments the global green industry and sets back the much-needed green energy transition. In truth, there’s enough for everyone. The International Energy Agency said last month that the global market for green technologies – including EV batteries, heat pumps and electrolysers for green hydrogen production – will be worth about US$650 billion (S$860 billion) a year by the end of the decade. And that is bound to grow as nations race to reach net-zero emissions by 2050 and hasten the switch away from fossil fuels.