The Quadrilateral Security Dialogue (Quad) Member States have announced “individually and collectively” programmes, initiatives, and plans to support clean energy transition i.e. shift from hydrocarbon to renewable energy sources such as wind and solar energy, in the Indo-Pacific region. The US is promoting clean energy transition in Asia through the Clean EDGE Asia program; India has announced the International Solar Alliance; Australia and the IEA hosted the Sydney Energy Forum in July 2022 to accelerate the clean energy transition in Asia; and Japan is promoting Clean Energy partnerships with Australia, India and the United States for the Indo-Pacific region.

While the intention and plans of the Quad Member States to help Indo-Pacific countries to mitigate the impacts of climate change by rapidly transition to clean energy production-use is laudable, its urgency is mired in both geopolitical and geostrategic contestation as also due to uncertainty of the clean energy supply chains. The former is targeted against China, and the latter is triggered by the ongoing Russia-Ukraine war.

Despite being labelled as the biggest environment polluter (primacy of coal in its energy pie and coal based industries), China has shaped the contemporary global landscape of green energy. It is the global leader in the manufacture of renewable energy associated materials and infrastructure and has successfully penetrated international markets. Over 70 percent of the world’s solar PV manufacturing capacity is in China. Similarly, in 2021, China accounted for more than half of the world’s total onshore and offshore wind power capacity of 830 GW.

Likewise, China’s lithium battery industry is primed to support rapidly growing renewable energy infrastructure demand and booming electric vehicle (EV) market. It is instructive to mention that renewable energy is underpinned by batteries which require Cobalt, Lithium, Nickel, and Manganese. However, China has limited sources of lithium and must import Lithium Carbonate from Australia, Chile, and Argentina which makes its renewable leadership vulnerable to “price fluctuations of raw materials”.

Similarly, permanent magnets for wind turbines and EV motors require Rare Earth elements. It is important to recall that in 2010 China had blocked Japan’s access to “rare earth elements during a 2010 dispute over Tokyo’s detention of a Chinese fishing trawler captain” and again in 2019, it “ threatened to include certain products using rare earths in Beijing’s technology-export restrictions, a response to the Trump administration’s pressure on telecom giant Huawei”.

As far as the ongoing Russia-Ukraine war is concerned, it has led to the closure of Ukrainian facilities that produce “krypton, xenon and neon”, the three important noble gasses used in the manufacture of certain microchips. Before the war, Ukraine supplied nearly 70 percent of the global supply of these gases and Russia accounted for around 30 per cent.  

The shutdown in Ukraine was a major setback for the microchip industry which was already struggling in the post-COVID 19 pandemic time. The ripple effect of the non-supply of these gasses was felt by the electronic industry particularly in cellphones and laptop production, as also by car-automobile manufacturers who had to scale down production. According to an Indian industry leader, “The supply situation in semiconductors is expected to remain disrupted in 2022 and may ease out once new capacities come up, geopolitical situation stabilises and lockdown restrictions get lifted in China,”

It is fair to argue that China has taken the lead in solar and wind renewable energy sector. It has both the technological capability and infrastructure for production of clean energy at an enormous scale and with rapid speed. Above all it has already accrued technological ascendency and this is best demonstrated by the fact that Chinese clean energy companies now lead the world.

At home, it is all set to mitigate climate change. In 2021, China invested $380 billion in clean energy, and plans to generate nearly 33 percent of its electricity from renewables by 2025. It also has the largest installed capacity at home i.e. 340 GW, up 25.8% compared to 2021.

The foregoing technological, infrastructure and investment data is a clear representation of China’s dominance in the renewable energy sector. Under the circumstances it may not be possible for the QSD Member States to keep pace with China; and therefore it is not an option for the QSD to geopolitically challenge China in energy transition. It is plausible that the United States may ‘arm twist’ or even create regulations-environmental standards that restrict imports of Chinese renewable energy materials. This strategy can potentially impact global efforts towards energy transition. Instead, the QSD Member States should prioritize cooperation with China based on complementary interests and abilities to mitigate climate change. Otherwise, the QSD’s ambitious plans for energy transition in Asia will be not be easy.

Dr Vijay Sakhuja is Associated with Kalinga International Foundation, New Delhi.