China Tightens Grip on Clean Energy Supply Chain

In a recent development within the clean energy sector, the Chinese government has revealed a prohibition on the export of technology used for the extraction and processing of rare earth metals, which are essential components in electric vehicles and wind turbines. This decision is part of China’s strategy to maintain control over the global clean energy supply chain.

The ban, which came into effect on December 1, encompasses the export of graphite products that are crucial for electric vehicle batteries. The Ministry of Commerce and Ministry of Science and Technology of China made the announcement following the revision of the “Catalogue of China’s Export Prohibited and Restricted Technologies.” The revised catalogue involved the deletion of 34 technical items, addition of four new items, and modifications to the control points and technical parameters of 37 technical items.

A spokesperson for the Chinese government explained that the revision was a routine adjustment in response to technological advancements and the necessity of technology trade management. Emphasising China’s commitment to promoting open cooperation and global innovation, the spokesperson highlighted the country’s efforts to share technological advancements with the rest of the world.

This decision by China is not an isolated incident and follows previous actions related to what critics have labelled as ‘resource nationalism.’ Earlier in the year, China imposed ‘temporary’ export control measures on sensitive graphite products, such as spheroidized graphite used in EV batteries. The imposition of these export restrictions coincided with the announcement of an investigation by the European Union into the importation of Chinese electric vehicles, which the EU claims benefit from state subsidies.

Furthermore, China had previously proposed banning the export of critical technology concerning solar photovoltaic components, signifying its continued efforts to exert control over key areas of the clean energy supply chain. These actions have led to a growing trend of countries seeking to secure access to crucial minerals and resources. For instance, the United States has established trade agreements with the European Union and Japan, aimed at reducing dependency on China for resources in clean energy technologies. Additionally, the U.S., along with the EU and 13 other countries, has initiated a Minerals Security Partnership to drive global investment in critical minerals supply chains.

As nations continue to navigate the evolving landscape of the clean energy sector, China’s latest move underscores the significance of strategic resource management and geopolitics in the pursuit of sustainable and innovative energy solutions. With the global demand for clean energy technologies on the rise, the dynamics of international trade and geopolitics play a pivotal role in shaping the future of the clean energy supply chain.