Red lights flash over China’s green tech in Europe

Red security lights are flashing in Europe over “Made in China” green exports. Solar panels, wind turbines, batteries, and electric vehicles all carry a “renewable risk.” The threat is a clear and present danger, according to a report released by the Loom Strategy Centre this week.

Critical components embedded in energy tech expose networks to “cyber attacks, coercion and espionage.” The pitfalls are mapped out in a research paper co-authored by Michael Collins, a former deputy head of national security strategy in the UK Cabinet Office.

“Europe’s dependence on Chinese low-carbon technologies is growing rapidly … Yet it is striking how poorly recognized the risks and their impact appear to be,” the London-based think tank pointed out in a 32-page study.

Key to understanding the challenges Europe faces is China’s clean energy dominance. It manufactures 90% of the world’s solar modules, and more than 80% of the planet’s wind turbines and battery cells. Beijing also has a chokehold on critical minerals and supply chains.

“[Countries risk] sleepwalking into a scenario where you’re suddenly confronted with a big security problem. We don’t want to replace one set of dependencies on fossil fuel imports with a dependency on Chinese technology,” co-author Collins told the Financial Times.

China will have no choice but to take countermeasures.

China’s Ministry of COMMERCE

Critical calculations:

• The report for the British government has simply highlighted the simmering tension between Europe and China. Lurking in the background are the perils of a trade war.
• Relations between the European Union, or EU, and the world’s second-largest economy are now at a “crossroads,” according to a report released by the European Policy Centre.

Delve deeper: “So has Europe been asleep at the wheel? To a certain degree, [it] has failed to recognize the effectiveness of China’s policies. Brussels has tried to level the playing field created by Chinese industrial practices,” the Loom Strategy Centre study stated.

Between the lines: “But the appeal of lower costs and efficient supply chains in China was seen to outweigh the risks to European manufacturing. Equally, globalization and competitive advantages were the organizing principles of global trade,” the research paper added.

Big picture: The mood has changed since then. In a bid to stem the flow of Chinese state-funded green exports, the EU launched the “Made in Europe” policy last month. The name was not lost on Beijing, sparking condemnation from the Ministry of Commerce.

Bottom line: “If the EU … presses ahead with legislation, and harms the interests of Chinese companies, China will have no choice but to take countermeasures to safeguard the legitimate rights and interests of its enterprises,” the ministry warned in a statement this week.

China Factor comment: Brussels is unlikely to fold under Beijing pressure. Crucial to the “Made in Europe” blueprint is that firms accessing public funds in sectors such as green tech, must “meet minimum thresholds for EU-made parts.” The red lights are finally flashing.