CHINA has overtaken the European Union in research related to clean-energy technologies, according to a study done for the bloc’s executive arm, creating a challenge for its green-tech ambitions.

China led the number of peer-reviewed publications in areas including solar and wind power, as well as lithium battery, heat pump and carbon-capture technology, in 2021. That’s a reversal from 2010, when the EU led on publications in all those sectors except for wind, the paper published last week found.

“China is increasingly becoming a world leader in science and innovation, for several critical technologies,” the paper said. “The EU’s exposure to China is becoming increasingly technological.”

The paper doesn’t represent the view of the European Commission, but can feed into its decision-making.

Commission President Ursula von der Leyen has pushed a strategy of “de-risking” from China, reducing dependencies in several critical technologies, including solar cells.

The EU’s executive arm will unveil a proposal on Jan 24 with rules aimed at boosting its power to screen and potentially block foreign investment in sensitive industries

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While European reliance on China’s production for products such as solar cells is well known, the paper highlighted how the gap in research and innovation could make it difficult for the EU to reduce such dependencies.

“Gaps in research and innovation may ultimately lead to import dependencies of future technologies and related products,” it said. “China’s global dominance in critical areas such as solar and electronics results in limited options for trade diversification,” it said.

About 22 per cent of the EU’s imports came from China in 2022, the paper found, rising in recent years while the equivalent figure for the US declined.

Exposure to Chinese inputs across international supply chains is particularly strong for EU industries such as basic metals, chemicals, electronics and electrical equipment, it found.

But the report also highlighted how China has some trade dependencies on the EU, including for “strategic products and critical technologies.” China’s electronics sector relies on EU inputs for almost 5 per cent of the total value of its output, the paper estimated. That’s similar to the degree of reliance that the EU’s total industrial sector has on Chinese inputs.

“This may prove to be an important asset for the EU, in a context of declining Chinese economic growth and possibly increasing China-US tensions,” it said. BLOOMBERG