Clean energy investment now outpaces fossil fuel funding at a 2:1 ratio globally—€2 trillion versus €1 trillion in 2024—marking a structural shift in capital allocation that the European Union aims to leverage through industrial policy while confronting market concentration risks that have seen China capture dominant positions across renewable energy value chains.
The EU’s newly released global climate and energy vision, published October 16, 2025, establishes a 15% target for global clean technology production under the Net Zero Industry Act while acknowledging that China manufactured over 70% of electric vehicles, 80% of wind turbines, and 90% of solar photovoltaic modules in 2024. This concentration represents both a competitive challenge and supply chain vulnerability that Brussels intends to address through what it terms “mutually beneficial partnerships” spanning trade agreements, regulatory cooperation, and strategic investment vehicles.
Investment Trajectories and Manufacturing Capacity
Global clean energy investment increased 78% from 2015 to 2024, rising from €1.1 trillion to €2.0 trillion, while fossil fuel investment declined from €1.4 trillion to €1.0 trillion over the same period. The EU’s share of clean energy investment reached €334 billion in 2024—19% of the global total and a 111% increase since 2015. Manufacturing capacity for key technologies expanded rapidly between 2021 and 2023: solar photovoltaic modules increased from 450 GW to 1.2 TW, wind power from 125 GW to 180 GW, electric vehicles from 10.5 million to 22.2 million units, and batteries from 1.1 TWh to 2.5 TWh.
The document projects the global clean technologies market will grow from €600 billion in 2023 to over €2 trillion by 2035, with the EU market specifically reaching €375 billion. However, European capture of this growth faces headwinds from what Brussels describes as China’s “assertive long-term industrial policy supported by state subsidies, overcapacity.” The Commission signals willingness to deploy trade defence instruments to counter what it characterizes as international trade distortions, while simultaneously seeking cooperation with Beijing on carbon pricing and energy transition pathways.
Emissions Reduction Arithmetic and Compliance Trajectories
The EU achieved a 37% emissions reduction from 1990 levels while GDP grew 68% over the same period, demonstrating continued decoupling between economic growth and greenhouse gas output. The bloc now generates 6% of global emissions—proportionate to its population share—compared to China’s 29%, the United States’ 11%, and India’s 8%. Current EU policies position the bloc to meet its 2030 target of at least 55% net domestic reduction compared to 1990 levels.
Globally, emissions increased 8.5% since 2015 while real GDP rose 40.9%, suggesting partial but incomplete decoupling. The International Panel on Climate Change assessment indicates limiting warming to 1.5°C requires 43% emission cuts by 2030 and 60% by 2035 compared to 2019 levels before reaching net-zero CO2 by 2050. Under current policies, the world tracks toward 2.7°C of warming by 2100—an improvement from the 3.7°C trajectory in 2015 but still substantially above Paris Agreement targets.
Cost Competitiveness and Technology Economics
Renewable electricity generation achieved cost parity with fossil fuels and subsequently undercut them substantially. From 2015 to 2024, the average global levelized cost of electricity for solar photovoltaics fell 68% to €0.040/kWh, onshore wind declined 56% to €0.031/kWh, and offshore wind dropped 49% to €0.073/kWh. These figures compare favorably to €0.067/kWh for coal and €0.079/kWh for gas, according to IRENA data.
This cost advantage translated to market penetration: in 2024, 582 GW of new renewable capacity was added globally, representing 80% of total electricity demand growth and a 283% increase versus the 152 GW added in 2015. Within the EU, renewables generated 47% of electricity in 2024, while nuclear capacity operates at over 80% capacity factor. Between 2021 and 2023, EU electricity consumers saved €100 billion through electricity generated by new solar and wind installations.
Regional Adoption Patterns and Infrastructure Constraints
Clean technology deployment is accelerating beyond advanced economies. African solar panel imports surged 60% between June 2024 and 2025 to 15 GW, with 25 countries importing over 100 MW each. Electric vehicle sales across developing and emerging economies in Africa, Asia, and Latin America rose 60% in 2024. Ethiopia exemplifies rapid electrification: 60% of new cars sold were battery electric vehicles in 2024 after the government banned internal combustion engine imports. Latin America and the Caribbean generated 65% of electricity from clean sources in 2024.
Yet Africa hosts 60% of optimal global solar potential while receiving less than 2% of clean energy investment, with over 600 million people lacking electricity access. The document identifies “real and perceived risk, a lack of supporting infrastructure and underdeveloped capital markets” as barriers to capital deployment, suggesting the transition’s pace outside advanced markets and China remains constrained by financing accessibility rather than technology availability or resource endowment.
Financial Architecture and Capital Mobilization
The New Collective Quantified Goal on climate finance established at COP29 set a target of $300 billion annually by 2035 from developed countries, with a broader call for $1.3 trillion per year from all actors. The EU positions its Global Gateway initiative as a primary vehicle, mobilizing €300 billion in leveraged investment through 2027 under a Team Europe approach combining EU and member state resources with development agencies, banks, and private capital. Half of flagship projects target climate and energy applications.
The proposed Global Europe instrument would deploy €200 billion from 2028-2034 with a 30% climate and environment spending target, supporting partner country climate action pathways while boosting diversification of clean technology supply chains. The Commission frames this as simultaneously addressing climate objectives and economic security concerns around supply chain dependencies, particularly on Chinese manufacturing capacity.
Strategic Partnerships and Market Access Instruments
The EU maintains the world’s largest free trade agreement network, covering 76 countries and 44% of EU goods trade, with negotiations concluded or ongoing with Mercosur, Mexico, Indonesia, Australia, India, Malaysia, the Philippines, Thailand, and the United Arab Emirates. These agreements include chapters on energy, raw materials, regulatory cooperation, and sustainable development, designed to facilitate clean energy value chain trade and ensure access to critical raw materials.
Beyond traditional FTAs, Brussels is negotiating “clean trade and investment partnerships” offering faster, more flexible support—the first under negotiation with South Africa. The document signals these partnerships will be “tailor-made” based on partner needs while explicitly noting attention to “interests of European companies,” suggesting a dual emphasis on development objectives and commercial positioning.
The Carbon Border Adjustment Mechanism enters as both a carbon leakage prevention tool and what Brussels describes as providing “a transparent, rules-based carbon price signal for imports to the EU market” that incentivizes decarbonization in partner countries. The Commission commits to maximizing Global Europe contributions to developing countries’ decarbonization and adaptation needs to “alleviate concerns raised on EU legislation” while strengthening partnerships—acknowledging political friction around unilateral climate measures.
Technology Transfer and Standards Development
The EU positions itself as a net exporter in specific clean technology segments: in 2024, it exported nearly €300 million in hydropower technologies and over €6.5 billion in grid components. The Commission launched 60 strategic projects under the Critical Raw Materials Act, 13 outside the EU, targeting extraction, processing, and recycling capacity for materials essential to clean and digital transitions.
International cooperation on standardization in sustainable and resource-efficient technologies receives emphasis as “crucial” to promoting global clean tech markets while unlocking investment and lowering costs. The EU commits to active engagement in international standards organizations to support lead market expansion, creating export and investment opportunities for European companies while improving partner country access to EU markets—a two-way facilitation mechanism linking market access to standards alignment.
Information Integrity and Narrative Competition
The document dedicates specific attention to what it terms “foreign information manipulation and interference” (FIMI) targeting EU energy and climate policies. The Commission describes efforts by “hostile actors” to “falsely portray renewable energy as a failure and the EU’s energy and climate policies and sanctions on Russian energy as short-sighted, damaging, and ineffective.”
Brussels commits to monitoring and analyzing climate-related FIMI incidents, raising public awareness, promoting fact-based information, and supporting independent media and fact-checking initiatives. The approach includes equipping EU diplomats with skills to refute climate-related FIMI worldwide and strengthening international cooperation through forums like the Information Integrity on Climate Change initiative. This framing positions climate communication as a security domain requiring active defense rather than solely a technical or scientific discourse.
Geopolitical Positioning and Alliance Management
The document addresses major emitters with differentiated strategies. China, responsible for 29% of global emissions, receives acknowledgment as “a leader in renewable energy, critical minerals and clean tech” alongside commitments to deepen cooperation on carbon pricing, energy transition, methane emissions, and adaptation—while simultaneously asserting EU rights to counter “state-sponsored overcapacity through the use of trade defence instruments.”
For the United States—the second largest emitter that recently departed the Paris Agreement—the EU signals continued cooperation on clean energy transition and technologies, including with subnational entities, business, and think tanks,” effectively routing around federal policy through state and private sector engagement. India, the third largest emitter, features in expanded government-to-government and industry cooperation agreements signed in February 2025, with the Trade and Technology Council positioned as a forum for developing clean supply chains.
The Trans-Mediterranean Renewable Energy and Clean Tech Cooperation Initiative (T-MED) targets the EU’s southern neighborhood, advancing decarbonization and regional competitiveness through flagship projects addressing fossil fuel export dependency. The Commission identifies large-scale energy infrastructure projects—GREGY, ELMED, the Great Sea Interconnector, and potential Black Sea submarine cables—as delivering value for both Europe and partner countries while supporting collective clean energy transitions.
Implementation Mechanisms and Accountability Structures
The Commission proposes establishing an EU External Clean Transition Business Council to advise on clean tech investment priorities in partner countries based on operational needs, alongside appointing an EU Special Coordinator for the Global Clean Transition to coordinate action and support the Team Europe approach. Clean Transition Business Fora and high-level business and trade promotion missions would connect European companies with opportunities abroad.
The Global Gateway Investment Hub would enhance coordination and information exchange between the EU and member states, while the Enhanced Coordination between Export Credit Agencies and Development Finance Institutions initiative aims to better integrate financing for EU exports. The document commits to regular progress reporting on implementation and maintaining dialogue with member states and stakeholders on the EU’s global role in driving climate and energy transitions.
The emphasis on business councils, special coordinators, and investment hubs signals recognition that achieving the 15% global market share target requires active industrial policy coordination rather than relying on market dynamics alone—particularly given China’s established manufacturing dominance and the competitive disadvantages European producers face on cost metrics despite technological capabilities. Whether these institutional mechanisms prove sufficient to meaningfully shift global market share trajectories remains an open question that upcoming implementation will test.
