China Invests $546-Billion in Clean Energy

In 2022, China topped the world in investments in clean energy once more, which may pose a challenge to American efforts to increase domestic manufacturing. A recent study found that China was the location of nearly half of the world’s spending on low-carbon projects. In 2022, the nation will have invested $546 billion in solar and wind energy, electric vehicles, and batteries.

This is nearly four times as much as the $141 billion in investments made in the United States. With investments in clean energy totaling $180 billion, the European Union came in second to China. According to the report, China also dominated low-carbon manufacturing, receiving more than 90% of the $79 billion invested in that industry last year.

The findings come at a time when the United States and Europe are working to increase domestic manufacturing capacity. The benefits of the Inflation Reduction Act, which includes $369 billion in incentives to grow the U.S. clean energy industry, have begun to be implemented in recent months.

China has successfully fostered these highly integrated and productive value chains for the production of solar panels and battery cells. Both now account for a significant portion of China’s export earnings. However, China is also making significant investments in its domestic supply chains, including components for wind turbines, in preparation for a significant expansion of offshore wind deployment.

By providing subsidies worth billions of dollars to domestic manufacturing, the Inflation Reduction Act intends to combat China’s dominance. For instance, a significant provision stipulates that consumers will be eligible for tax credits totaling tens of thousands of dollars when purchasing an electric vehicle, but only if the majority of battery components are produced or assembled in North America.

Strong international criticism, particularly from the European Union, has been leveled against these incentives. However, President Joe Biden has made it abundantly clear what he intends to accomplish, stating that supply chains will begin here.