China’s Clean Energy Boom and Its Global Impact

How the World’s Largest Energy Consumer Is Reshaping Global Markets

China is now the epicenter of the global energy transition. Over the past few years, the country has scaled clean energy with unprecedented speed, transforming its power system, industry, transportation, and international influence. This article offers a clear overview of what is happening in China today, and what it means for global markets, industry competitiveness, and climate progress.

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1. A Decade of Transformation

China’s clean energy story began with efforts to tackle air pollution and industrial overcapacity, but it has since evolved into one of the most ambitious industrial transformations ever undertaken. The Center for Research on Energy and Clean Air (CREA), now operating across three continents, has documented this shift in depth. Today, China’s economy is structurally reorienting toward clean technologies.

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2. Clean Energy Deployment at Unprecedented Scale

China’s renewable energy build-out is unmatched. In the early 2020s, the country produced slightly more than one Germany’s worth of wind and solar power. By 2024, this had risen to four Germanys’ worth. Solar capacity is now three times that of the EU, wind capacity is twice that of the EU, and nuclear capacity will soon overtake the EU as well. In 2023, clean power additions exceeded annual electricity demand growth, marking a structural peak in fossil-fuel generation.

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3. Electrification Across Transport, Industry, and Buildings

Electrification is accelerating across the economy. Around 50% of new passenger vehicles are now EVs or plug-in hybrids. Heavy-duty electric trucks have grown from under 10% to over 20% of sales. Buildings and industry are electrifying quickly, with only Nordic countries having a higher electrification rate.

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4. Emissions: A Plateau with Structural Drivers

China’s emissions have been stable or falling for 18 months, even as energy demand grows. Emissions from cement and steel are declining, the power sector has seen 15 months of reduced emissions, and oil consumption is falling thanks to EV uptake. The chemical sector remains the key source of emissions growth.

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5. Manufacturing Power: China’s Clean-Tech Bet

Battery, EV, and solar module production has expanded more than tenfold in a decade. After Xi Jinping’s carbon neutrality pledge and the collapse of the real estate sector, investment shifted dramatically toward clean technology manufacturing. This supply-side strategy aims to make clean technologies so affordable that the market naturally displaces fossil fuels.

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6. Global Price Shock and Export Boom

China’s manufacturing boom has cut prices for solar, batteries, and EVs by over 50%. Despite falling prices, export values are at record highs. Europe is the fastest-growing market, while the Global South is accelerating clean-tech adoption. North America remains slower to adopt Chinese imports.

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7. China’s Role in Global Supply Chains

Much of China’s production is consumed domestically, so global dominance figures can be misleading. Europe remains strong in wind turbines, electrolyzers, and heat pumps. But China dominates upstream materials such as polysilicon and permanent magnets.

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8. BYD: The New Automotive Powerhouse

BYD has become the world’s largest EV producer by volume. With deep vertical integration, it produces batteries, power electronics, and vehicles in-house. Its Blade battery technology is reshaping global standards for safety and performance. BYD’s expansion is rapid across Southeast Asia, Latin America, and parts of Europe, driven by competitive pricing and manufacturing scale.

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9. Energy Security and Geopolitics

Countries worldwide are reassessing their dependence on Chinese supply chains. The US, Japan, and India are actively diversifying, while Southeast Asian nations aim to hedge rather than decouple. Europe’s tariff-heavy approach has been insufficient; clear industrial policy is needed.

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10. Has China Already Peaked Emissions?

China may have already peaked emissions, but uncertainty remains. Near-term risks include a policy gap for renewables, pricing changes, and the addition of new coal and chemical capacity. A bumpy plateau is likely in the next 1–2 years before a sustained decline.

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Conclusion

China’s clean energy expansion is reshaping global markets, accelerating the global energy transition, and redefining industrial competition. While challenges persist—from coal expansion to grid constraints—the momentum appears strong and irreversible.

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