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Do not permit China control of clean energy supply chain: U.S. officials

Speaking at the CERAWeek energy conference in Houston, White House energy adviser John Podesta, and other officials highlighted the need for a domestic supply of clean energy components without sparking a trade war with China.

The U.S. has been encouraging rapid investment in the clean energy sector to combat climate change, but there are concerns that this could empower China which is already a dominant supplier of critical minerals and components used in electric vehicles and solar panels.

Washington’s warning at the conference reflects growing concerns that China has too much of a chokehold on critical minerals, processing and upstream technologies, and solar. According to officials, China’s position on Russia’s war in Ukraine, Chinese spying, and Taiwan’s status have contributed to rising tensions with the United States.

The energy conference also cited Europe’s historic reliance on Russian fuel as an example of risks that come with relying on global rivals. Since Russia invaded Ukraine on February 24, 2022, Moscow has cut natural gas supplies to Europe. This has forced Europe’s industry and consumers to cut their consumption, while governments and utilities scrambled to find alternative supplies.

The officials at the conference saw agreement as to the value of having a diverse and secure supply chain, with some executives saying that the clean energy transition would be smoother if trade relations with China remained friendly.

However, others advised that nations need to think about their own energy independence, that it’s essential for liberal democracies to ensure they have integrated and diversified supply chains.

Energy executives also warned that tensions with China could dampen investment in long-term projects, including those in China itself.

The Biden administration has encouraged domestic clean energy manufacturing investment, with the Inflation Reduction Act providing hundreds of billions of dollars in incentives to companies opening new projects on American soil.

However, it is unlikely that the U.S. could become completely independent from China-made components, such as electrolyzers for hydrogen production, batteries and solar panels.

Despite the U.S. comments encouraging a decoupling in trade with China, the two countries have been making ever more energy supply deals with natural gas in recent months.

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