The green technology market is growing

The International Energy Agency (IEA) is probably right. Green technologies, in particular six of them (photovoltaic energy, wind power, electric cars, batteries, electrolysers and heat pumps) will be the driving force of the industrial revolution of the 21st century.

In a recent studythe IEA shows that these six sectors, which weighed 700 billion dollars in 2023, will reach more than 2000 billion in 2035, “a value close to the global crude oil market”. Sales and purchases of clean technologies already represent the equivalent of half of global gas trade.

Chinese green oil

China dominates the industrial scene, with market shares reaching between 70 and 90% of these future technologies. If Joe Biden’s European policy and investment plans should shake Chinese supremacy, China will nevertheless manage to maintain a market share of around 50%, according to IEA experts; Europe and the United States will each share a quarter of the pie.

China has come a long way. It is more than ten years ahead in its energy transition and has a formidable industrial base. According to the IEA, China’s clean technology exports are expected to exceed $340 billion in 2035, roughly equivalent to the projected oil export earnings of Saudi Arabia and the Emirates combined in 2024!

And, just this year, China has just inaugurated a new solar cell manufacturing plant whose production capacity is equivalent to the needs of all of Europe…

Customs tariffs won’t change anything

Of course, Washington and Brussels are trying to protect themselves by increasing taxes at the border, particularly on batteries and cars from China. Although these protectionist measures are now making headlines, their effectiveness is questioned by many experts.

“China’s technological rise will not be hindered, and may not even be slowed, by U.S. restrictions,” according to Adam Posen, president of the Peterson Institute for International Economics, a Washington-based institute that conducts research for governments and central banks around the world.

China is not only competitive in terms of labor costs but controls each stage of manufacturing, from raw materials to finished products. No other state in the world has invested as much in R&D as Beijing.

A considerable advance

We have forgotten that China entered the race for electric cars in 2001. For the first generation of lithium batteries for cars, the Middle Kingdom has all the patents and unrivaled know-how. The customs tariffs do not seem to impress him.

Thus, the world’s leading producer of electric vehicles BYD predicts that its overseas deliveries will soon represent almost half of its total sales. “Which suggests he does not view US tariffs (currently 102.5%) as a major obstacle. The car manufacturer already has a factory in Thailand and is building similar factories in Hungary, Brazil and Turkey,” explains the Bloomberg agency, which has just devoted a report to Chinese technological supremacy.

Just a few days ago, Volvo, owned by the Chinese group Geely, acquired the entire capital of the Novo Energy joint venture that it holds with one of the few European battery manufacturers, Northvolt, in serious financial difficulty. and who aimed to build a second factory. As for the European states which supported the idea of ​​an increase in tariffs on cars manufactured in China, Beijing has just threatened them: they will be on the blacklist of countries which trade with China.

If China’s supremacy can no longer be fought with customs barriers, except at the risk of triggering a global recession, the best response lies in research and development.

The decisive battle for batteries

Without a doubt, after the solar decade, the next will be that of investments in batteries. A new generation is emerging, one offering a so-called “solid” architecture, which aims to free itself from lithium-ion. This new generation, which uses graphite-free lithium-metal anodes – a material over which China has almost total control – should be marketed in the coming years. The expected performances are spectacular, allowing rapid charging and a range exceeding 1000 kilometers, while greatly reducing the risk of fire.

According to researchers from the Carnegie Foundationa think tank which encourages diplomatic exchanges and international cooperation, Europe or the United States retain every chance of developing and industrializing this new generation of batteries. In the United States, QuantumScape has joined forces with the VW Group; BYD and CATL were brought together in a consortium by the Chinese government to accelerate the pace. Toyota and Nissan are targeting production by 2028, while Samsung promises mass production from 2027 for high-end cars. And that is perhaps the good news: competition in the race for a technology described as disruptive will certainly be tough but very open.

According to the company Benchmark Mineral Intelligence, a consulting firm specializing in strategic materials, China should only occupy a minority share in the production of these new generation batteries. The reason? The country would take small steps, fearing losing control of its industrial base based on the first generation of batteries. Is the wheel of fortune turning? No doubt, but on the condition that the United States and Europe finance new generation projects and refrain from subsidizing technologies where they have definitively lost their footing.

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