Summary
- China’s economic approach and trade tactics are dampening the EU’s ambition to become a clean-tech powerhouse.
- The bloc needs to transition from imported fossil fuels to green energy, in order to maintain its strategic independence from other countries. This will be impossible if it can no longer make its own green technologies.
- However, member states differ markedly in their appetite for bolstering European clean-tech firms and climate policy. Their stances reflect how strong their clean-tech sectors are, how much clout old industries have, the country’s exposure to Chinese competition, and public opinion on China and climate change.
- Although a broad group of European political and business leaders agree that China is an economic challenge, they differ on their assessments of the scale and long-term fallout of the problem. This has constrained efforts to build a durable coalition for a more robust European policy response.
- Clarifying trade-offs—through impact scenarios, transparent cost debates and appealing to new constituencies—is essential to creating a shared European approach that strengthens both climate ambition and economic security.
Shooting for the moon
When European Commission president Ursula von der Leyen launched the European Green Deal in 2019, she called it “Europe’s man on the moon moment”. The green deal aimed to create the world’s “first carbon-neutral continent” by 2050. It was a bold vision to remake the EU by transforming the continent’s economy into a sustainable, resource-efficient powerhouse fuelled by home-grown innovation.
Yet as Europeans boarded the “green deal” spaceship for their lunar voyage, they discovered the hull was stamped with “Made in China”—it was not the European craft they had planned for. Steering was faster, but proved trickier. Space debris from Russia and Donald Trump’s America forced a course correction that guzzled precious fuel. Now some Europeans doubt whether the “green moon” is even worth reaching. They see an image in their mind’s eye: an astronaut with a flag in hand to plant on the moon. But the flag is not European: it’s Chinese.
The unease among Europe’s green mission crew reflects a stark choice. The faster the EU advances towards its climate goals, the more it has to depend on other states. The harder it tries to reduce those dependencies, the more politically and economically costly the transition appears.
“De-risking” is a shorthand for curbing reliance on any single source for imports, which, if weaponised, could massively disrupt domestic production, supplies and security. Due to China’s exceptional position in global manufacturing supply chains (in 2023, it accounted for 28% of global manufacturing), the term “single source” has become almost interchangeable with “China”. Chinese technologies underpin the green energy transition. Their solar panels, wind components, batteries and, most notably, electric cars, are so aggressively priced that Europe risks locking itself into a new dependency just as competition intensifies for its indigenous clean-tech industries.
At the same time, the Chinese leadership has demonstrated that it is willing to use coercive trade tactics: from withholding graphite exports to Swedish battery makers, to punitive measures against Australia and Lithuania, and export restrictions of rare-earth elements and permanent magnets for Europe. That means that green technologies are not only tools of decarbonisation, but securing their supply chains is the foundation of the EU’s long-term energy security, industrial leadership and economic resilience—precisely because they free the bloc from dependence on other countries.
However, the European Green Deal faces mounting backlash as legacy industries—from steel to combustion-engine vehicles to the chemical sector—push for rollbacks in response to rising costs and red tape. At the same time, mainstream right-wing and populist parties frame climate policy as the reason for high prices and the decline of European competitiveness.
EU member states vary sharply in their levels of trade and investment with China, the strength of their domestic clean-tech industries, the power of their legacy industries, and the political salience of China and climate policy in national debates. Their readiness to pursue de-risking and economic security policies without stalling the green transition differs accordingly. In many cases, a key issue is underestimating China’s industrial challenge to Europe’s future.
This paper examines these dynamics across five EU member states that provide a balanced geographic representation: Denmark, France, Germany, Italy and Poland. The first part of the analysis will look at the structural and political factors that shape how EU member states navigate the tension between climate ambition and economic security. This will explore the political and economic conditions that shape member states’ willingness to pursue de-risking while maintaining momentum on the green transition.
The paper will then examine the attitudes of major political parties, business groups, trade associations and unions towards the European climate agenda, and China as an economic and security actor. This analysis will shed light on where national debates converge, where they diverge, and where blind spots persist in current European discussions on climate and economic security. It will also reveal how European leaders can move forward to align climate ambition with economic security.
China’s industrial challenge to Europe
China’s industrial dominance is based on a concerted strategy set in motion more than a decade ago. Policies launched under Made in China 2025 and subsequent sectoral roadmaps are now shaping market outcomes at the expense of European business market share and sourcing decisions. Made in China 2025 explicitly aimed for dominance in clean-energy equipment, electric vehicles (EVs) and batteries—goals that have largely been realised.
Chinese leaders centred their strategy on export-led growth based on advanced manufacturing, which they bolstered with coordinated industrial policy and state support. This enabled Chinese firms to achieve scale and cost levels that European producers have struggled to match. And the competition is intensifying. Since last year, Chinese exporters have diverted goods facing trade barriers in the United States to Europe, leading to a new high in the EU’s trade deficit with China in 2025.
This “China shock” will hit Europe’s clean-tech industry hard. The collapse of Europe’s solar manufacturing base is a stark warning. Electric car makers may be next: the sector lost 104,000 jobs in 2024 and 2025. Europe’s pioneering wind sector is also under significant strain and is rapidly losing market share in global markets to Chinese competitors.
There is no evidence that Beijing is going to change course. Its blueprint for the upcoming 15th Five-Year Plan, due in March 2026, signals an intensified push for dominance in strategic manufacturing sectors, including clean energy technologies. Building on Made in China 2025, the new five-year plan prioritises advanced manufacturing, technological self-reliance and rapid domestic deployment. Sectors that include “new energy” (a broad term in China’s policymaking lexicon for clean and renewable energy technologies), new materials, hydrogen and nuclear fusion stand as core growth drivers. They will be propelled by “extraordinary measures” that mobilise state finance, compulsory procurement orders of indigenous technology and preferential support for domestic firms.
On technological self-reliance, the plan explicitly calls for raising the share of government procurement devoted to “self-developed” products, sending a clear “buy Chinese” signal designed to guarantee domestic innovators a protected home market before they compete globally. While Beijing still signals openness to trade, the emphasis on “autonomous and controllable” value chains points to a more restrictive operating environment for foreign firms in strategic sectors.
As Beijing doubles down on plans that will further entrench its dominance in strategic sectors, the case for European de-risking only strengthens. Yet rising costs, tighter fiscal space and mounting domestic resistance to climate policy are making sustained political support for de-risking clean technology and the broader economic security agenda increasingly difficult.
Costs and backlash in Europe
EU efforts to reduce reliance on China—for example through regulation that mandates a minimum percentage of EU-sourced components—have tended to narrow the immediate supplier base and often lead to fewer and more expensive non-Chinese alternatives in the short term. For example, Chinese-made wind turbines cost at least 30% less than European-made ones. Member-state governments and European industry groups have warned that “buy European” procurement rules risk inflating production costs and weakening global competitiveness. Although experience from the telecommunication sector has shown that replacing Chinese equipment in the network would incur minimal cost to the average consumer, at a time when the cost of living is a dominant political concern, these trade-offs are increasingly toxic, especially as public support for climate policy becomes more conditional and fragile.
A strong clean-tech manufacturing base requires not only diversified supply chains but also large export markets to achieve scale. The return of US president Donald Trump and his administration’s hostility toward climate policy have already shrunk one of the most important potential markets for European clean-tech exports: EU exports of batteries, EVs and charging infrastructure to the US dropped to €200m in September 2025, from €1.5bn a year earlier. A more closed or volatile US market will deprive European manufacturers of the scale needed to compete with Chinese producers in clean tech. It also compresses margins and reduces their ability to absorb the short-term costs associated with supply chain diversification.
Domestically too, European leaders face opposition to the Green Deal. In several member states, major political parties are now campaigning explicitly to dismantle elements of the EU’s climate framework, branding climate policy as economically punitive and strategically naive. Dependence on China and fears of industrial decline have been cited in political debates as arguments against phasing out the combustion engine. These dynamics risk turning de-risking from a pillar of Europe’s climate and industrial strategy into a faultline that undermines political support for the transition itself.
De-risking and climate will succeed and fail together
Europeans cannot achieve genuine strategic autonomy or reduce exposure to geopolitical risk without decarbonisation. Unlike the US, the EU is not endowed with abundant domestic fossil resource; unlike China, it cannot rely on large-scale coal production to underpin energy security.
Control over the manufacturing and deployment of clean energy technologies, therefore, becomes a strategic asset in its own right. European leaders cannot afford to lose control over who makes, operates and regulates the key technologies Europe needs, like batteries, solar panels and wind turbines, in the quest to move fast on the energy transition. If Europe rolls these technologies out quickly but deepens structural reliance on a single external supplier, in particular countries that have a record of deploying economic coercion tools, it will weaken its own industries and limit its ability to make independent policy choices.
Besides, if European publics perceive the green transition as hollowing out domestic industry and shifting value creation abroad, it becomes increasingly difficult to defend politically. When voters see factories closing or jobs moving overseas because of Chinese imports, including in clean tech, it could fuel nativist politics and climate scepticism. Climate sceptical politicians have increasingly framed the clean transition as a policy that hands European industries and jobs to China. In this context, cheaper clean technologies and lower energy prices are not enough to build durable support for the transition.
Taken together, these dynamics mean that failure in one agenda will undermine the other. A climate transition that deepens reliance on a single external supplier will weaken industrial capacity and erode political support. A de-risking strategy that neglects the clean energy transition entrenches dependence on energy imports. The two agendas are therefore not competing: they are codependent. Europe’s challenge is recognise that each depends on the other.
The political economy of going green
Member states and businesses differ in their stances on going green and cutting reliance on China. Mapping these positions shows where political alliances can emerge to align climate ambition with economic security.
This section maps four factors that influence how EU member states weigh climate ambition against geopolitical and economic risks. These are: how much governments prioritise climate action; their trade and investment ties to China; the competitiveness of domestic clean-tech industries; and public views on China. (Detailed data sources can be found in Annexe 1).
High levels of trade and investment with China make European governments more aware of their strategic vulnerability and wary of taking steps that could provoke economic retaliation. This tension is sharpest in Germany, and to a lesser extent, Denmark, where deep commercial ties with China coexist with growing concern over dependency. By contrast, countries with fewer trade and investment ties with China, such as France, Italy and Poland, align more closely with the EU’s economic security agenda and are more willing to support defensive tools such as tariffs.
Countries with robust clean-tech sectors, such as Denmark, are more likely to see climate ambition and de-risking as complementary. In places where these sectors are weaker, such as Italy, politicians can use scepticism about the cost of climate policy to shield local industry from Chinese competition.
About the Author:
Byford Tsang is a senior policy fellow with the Asia programme at the European Council on Foreign Relations.