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Nu’oman A. A

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Clean energy trade policies are gaining momentum - underpinning efforts to strengthen domestic manufacturing & diversify supply chains

Nearly 200 new trade measures have been introduced since 2020, compared to less than 40 in the five preceding years.
Key findings
The last four years unleashed a wave of new energy policies that addressed pressing energy security concerns and accelerated the uptake of clean energy. The global economic crunch triggered by the COVID19 pandemic prompted governments to launch new recovery and relief packages, with many prioritising clean energy transitions. Close to 150 countries - covering close to 95% of global greenhouse gas (GHG) emissions set forth new, more ambitious climate commitments, leading about 50 governments to tighten energy efficiency, renewables and emissions standards alongside these new incentives for clean energy. Since 2020, clean energy investment grew 60% globally.
Energy security has prominently reemerged as a priority for policymakers. Russia’s invasion of Ukraine in 2022 led to energy price spikes globally, highlighting the risks posed to interconnected energy systems. Countries were reminded anew of traditional energy security concerns, while the shift to clean energy brought forth new ones, particularly in terms of supply chain concentration of key technologies and the critical minerals essential to their production. Disruptions to trade routes amid growing geopolitical tensions and climate-induced extreme weather are complicating the situation, exposing energy systems to new vulnerabilities. More than ever, countries are having to consider and adopt new approaches to balance the interconnected goals of sustainability, affordability, competitiveness and security.
Securing clean energy supply chains has become a key priority, prompting use of diverse policy measures – from direct incentives to trade policy. Geographical concentrations within clean energy supply chains remains higher than fossil fuel supply. Across key technologies – solar PV, wind, battery, and electrolyser – at least 80% of manufacturing capacity is concentrated within the top three producing countries. This renders global supply chains vulnerable to disruptions, whether due to policy changes in individual countries, natural disasters, technical failures or corporate decisions.
Recent policies and strategies have designated key clean energy technologies and related commodities to be of strategic importance, proposing requirements or targets for minimum shares of domestic manufacturing. Recent notable examples the United States Defence Production Act and the European Union’s Net Zero Industry Act, however other countries have introduced similar policies and targets. Additionally, government direct support available to domestic manufacturers of these technologies climbed to USD 170 billion globally in the last four years – nearly 10% of total government energy spending mobilised across that period. The largest portion of these incentives is going to electric vehicles (EVs), followed by hydrogen and batteries production, along with critical minerals refining and production. Since 2020, around 70% of this earmarked support was concentrated in advanced economies and China, although new spending is being mobilised in other emerging manufacturing hubs, such as Brazil, India and Malaysia.
#CleanEnergy #Renewables #ClimateChange
#ClimateAction
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  • Princess

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    10 w

    This is incredibly encouraging 👏.

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    • Nu’oman A. A

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      In no time the world will achieve its goal is sustainable environment for planet and people

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      • Sarah Chabane

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        Greatnews!

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        Re-watch all our COP29 broadcasts

        We need to stop methane and #BuyMoreTime