The International Energy Agency’s (IEA) Energy Technology Perspectives 2024 (ETP-2024) report provides a comprehensive analysis of how global clean energy manufacturing and trade dynamics are reshaping economic landscapes. The report identifies the rapid growth in clean energy sectors, like electric vehicles (EVs), solar photovoltaics (PV), wind turbines, batteries, electrolyzers, and heat pumps, which are contributing significantly to job creation, reducing emissions, enhancing energy security, and lowering consumer energy costs. Global investment in clean energy manufacturing has risen sharply, with approximately USD 235 billion invested in 2023—a 50% increase over previous years.
One of the most notable trends is the substantial increase in global trade related to clean energy technologies, which reached a market value close to USD 200 billion, or nearly 30% of their total market value. This trade includes electric vehicles, which now comprise one-fifth of all car trade, and solar PV technologies as the second most traded item in the clean energy sector. This expansion is expected to continue, with projections indicating a rise in clean energy trade value to USD 575 billion by 2035.
ETP-2024 emphasizes the significant role of manufacturing in driving the global clean energy transition. China’s dominance in the clean technology market persists, accounting for 70% of global clean technology manufacturing value. However, the report underscores that emerging economies still have opportunities to develop their clean energy industries. In particular, countries in Southeast Asia, Latin America, and Africa are well-positioned to enhance their manufacturing capacities, moving up the clean energy value chain with the right enabling policies and infrastructure investments. For instance, Southeast Asia could expand its role in solar PV manufacturing, while Brazil and North African countries could become key players in wind turbine and EV production, respectively.
The report highlights the importance of industrial strategies tailored to clean technology supply chains, especially to overcome cost disparities in manufacturing between regions. Currently, China leads as the most cost-effective location for manufacturing major clean technologies, with production costs up to 45% lower than in the European Union and up to 25% lower than in India. In contrast, countries with higher production costs, like those in Europe, could achieve competitiveness by focusing on innovation and policy support. This approach would allow these countries to offset cost disadvantages while meeting local demand and bolstering energy security.
ETP-2024 also discusses potential risks associated with this economic shift, including trade protectionism and uneven benefits across regions. Increased competition in clean energy manufacturing and potential trade barriers could hinder the cost-effectiveness of clean energy transitions globally. The IEA urges balanced industrial and trade policies to avoid these pitfalls and ensure equitable economic growth across emerging and established markets.
For policymakers, ETP-2024 stresses the importance of well-designed, long-term strategies that integrate climate goals with industrial and trade objectives. Supporting research and development (R&D) in advanced clean technologies, establishing reliable supply chains, and enhancing manufacturing capacity are all crucial. This strategic approach will not only address global climate targets but also foster resilience against economic and supply chain disruptions, paving the way for a sustainable energy future.
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