For a long time now, Europe has been asserting its ambition to be a climate leader, an ambition defended by the Member States but above all by the European Commission. This process is linked to the strength of environmentalist movements in the major European countries, in particular the northern countries, Germany and France. Since the Kyoto Protocol, Europe has called for a multilateral approach to the climate within the UN framework. Today, this leadership is provided by the Commission’s very proactive action: Green Deal, Fit for 55, EU taxonomy, non-financial standardisation. Moreover, the European Union’s Global Gateway strategy announced on 1st December by President Ursula von der Leyen is a recognition of this interaction and of the need for large-scale investment, capital flows to support the energy transition, and a new way of thinking about relations between the EU, Africa, Asia, Latin America and especially China.
Within Europe, German’s position is hegemonic but singular, since it turned its back on military nuclear power very early on and, by contamination and political calculation, also on civil nuclear power. The country has developed renewable energies massively while remaining heavily dependent on coal and gas. The automotive industry is one of Germany’s weak points, with a head
on confrontation between the German industry and the Franco-Italian industry. Generally speaking, the fact that Europe banked on cheap energy based on Russian gas, combined with the “bazaar” economy set up with Eastern European countries and a strong trade dependence on China, has considerably weakened Europe’s autonomy and its climate commitments.
Germany’s target of carbon neutrality by 2045 is not very credible at the moment, as the Constitutional Court has pointed out: maintaining the energy-intensive industrial base while providing energy to cities whose density and therefore energy efficiency are low seems extremely challenging. Germany is thus dependent on transitional energies and, more fundamentally, on an economic model based on growth.
For Germany, the success of its exports is linked to social inequalities with an elite and professional manual workers who are the beneficiaries. In this context, as elsewhere, the rhetoric asking everyone to make sacrifices, to change their lifestyle, without tackling inequalities, is devastating.
In this way, German contradictions amplify European ambiguities.
All things considered, Europe is neither an energy power nor a climate power. Unlike the US, Europe is not an energy power and has no resources of its own, which sheds a cruel light on the question of its dependence: it is subject to higher energy costs than elsewhere and is dependent on critical materials, foreign technologies and Chinese producers. It is currently highly uncertain, contrary to the Commission’s assertions, whether the energy transition will be accompanied by a reduction in the continent’s dependence and strategic autonomy. That said, the total weight of emissions remains relatively low compared with the US or with the large emerging countries such as China or India.
All in all, the proactive European transition, by being too little concerned with social and strategic constraints, may result in further deindustrialisation and energy insecurity, leading to protest movements opposing the transition. Moreover, a strategy that cannot be applied elsewhere, with high carbon leakage and limited contribution to innovation, may ruin European efforts to chart a globally feasible course and thus further reduce its global impact in a tripolar world. Does this mean that Europe is not justified in its climate leadership project? The answer needs to be qualified because Europe still has strong assets: the level of European savings, which could be invested more massively in the Green Pact, significant know-how, the capacity to experiment with negotiations and balances which could then be exported, and its long-standing ability to combine social and development issues.
China or the desire to secure its resources to defend its growth model
Growth has been a priority in China and has helped to eradicate poverty, but this has come at the cost of dependence on fossil fuels. China now burns more than half of the world’s coal production and has been the largest emitter of CO2 (30% of total emissions) since 2006. This helped to drive the emergence of the middle class by offering them access to a consumerist and modern lifestyle, modelled on that of the West, thereby stabilising the political regime.
Without coal, Chinese coal, China would not be the world’s second largest economy. Coal was virtually irreplaceable (58% of the energy mix in 2019!).
The contradiction between the social dimension, and therefore growth, and the climate issue is even stronger than elsewhere. The power cuts of 2021 are a clear example of this. As the economy and the world’s workshop restarted, more electricity was needed. Rationing measures were put in place and some industries had to be shut down, which affected notably Apple and BASF.
But the problems of pollution, flooding and water stress have become a growing concern. More generally, China will be strongly impacted by climate change.
China now presents itself as the responsible leader of the emerging countries : the G77 and the BASIC group (made up of Brazil, South Africa, India and China). It does so by seeking a balance between development and responsibility: it multiplies its commitments in favour of the climate (peak CO2 emissions by 2030 at the latest, and carbon neutrality by 2060, end of funding for coal
fired power stations); and it also defends the pursuit of a right to development, considered as non negotiable. In this fragile balance, it announced it would drop coal-fired power plant projects along the Silk Road.
Even more than Germany, its growth model is based on the need to supply energy to its industrial sector and to export, hence its obsession with energy security. Unlike the US, China relies heavily on imports for its energy security. With one exception, however: it has abundant coal resources that it uses massively in all ways: electricity production, oil synthesis. The only way of limiting the use of coal would be to secure international relations, but clearly this is not on the agenda today. China has a very strategic approach to the transition: it has been able to exploit the opportunities it offers and take control of the energy industries of the future (control of rare earths, integration of the battery and photovoltaic sectors, use of dumping rules, investments concentrated in critical technologies).
By way of illustration, 75% of the global production of batteries for electric vehicles is in China. ATL is by far the biggest company in the world, even though (far behind) there are some Koreans and Japanese. The entire value chain, including commodities, is controlled by China; it is at the centre of gravity of commodity production after having taken control of mines in Africa, in Congo, Mozambique, and Tanzania. It controls 80% of the refining of all the commodities needed to build batteries: for example, 66% of anodes and cathodes and 73% of fuel cells. Of the 200 mega battery factories in the world, 150 are in China.
For solar panels, the figures are equivalent. The production of solar panels amounted to 110 GW in 2019, for a global total of 144 GW.
More generally, this is leading to targeted takeovers in technologies critical to the transition, while China has already made acquisitions of or gained access to arable land in Africa and elsewhere. If China were to face food security problems in the future, it might well want to buy all the agricultural production of countries in which it has land investments.
China thus has a clear objective and is acting in a very determined manner in line with this objective: to use the energy transition in order to emerge as a winner and ensure its global leadership.
Its weaknesses, however, are significant: relatively weak technological innovation, energy dependence, strong impact of climate change…
Read more (Part II)