China is ready to drive leadership of a low-carbon world – by making the international rules
- Written by Alex Lo, Professor, Climate | Policy | Sustainability, York St John University
Donald Trump has made it clear he has no intention of playing a global leadership role in green energy or a move towards net zero.
While the US president is stepping back[1] and Washington is deregulating its fossil fuel industry, Beijing is stepping up.
China[2] sees an opportunity to write a green rulebook for the global low-carbon economy. And who makes the rules tends to wield a fair amount of power.
Already China dominates global green energy supply chains[3], from solar panels, wind turbines, grid equipment and storage systems to electric vehicles.
The US’s recent rollback[4] puts China in a strong position to drive a further shift[5] in where the world looks for green products that meet global standards, and what those global standards are.
China’s most likely move[6] is to scale up a credible monitoring[7], reporting and verification system[8] across heavy industry, so carbon emissions can be priced, compared and audited.
The EU has just introduced new rules[9] to address “carbon leakage” where companies move production and pollution out of the region. This means that companies will have to purchase certificates showing how much carbon has been produced when importing goods. The UK has plans to follow suit.
Market access is being rewritten around documentation. Exporters that can document carbon content gain an edge over those that cannot. Under other EU rules[10], a digital “battery passport” becomes mandatory from February 2027 for EV batteries and industrial batteries above 2kWh.
While China does not control access to the European market, it can make it easier for the rest of the world to comply with EU-style requirements. It can do so by standardising the infrastructure and tools that firms need to prove they meet in order to keep selling into Europe. Once a factory is plugged into a particular compliance system, switching is costly.
China is building huge solar farms.China can also leverage its supply chain dominance and digital infrastructure to sell traceability tools (which track which materials were used in a product), reporting templates, verification services and management platforms.
Another factor is that in the next few years firms[11] will be expected to publish more consistent, investor-oriented sustainability and climate information, so that investors can compare climate exposure and performance across companies and countries.
China has been strategically transforming into a clean energy superpower since the Paris agreement[12], where 195 countries agreed to tackle climate change. This part of China’s economy was worth US$ 2.1 trillion (£1.5 trillion), or 11.4% of GDP, in 2025[13].
China’s investment in renewable energy has increased from US$117 billion in 2015 to US$290 billion in 2024[14], which is three times that of the US.
However, these numbers do not show a simple divide between the US and China. Some US states are taking action[15], regardless of the Trump government’s position. US investment in renewable energy increased by 2.6 times from 2015 to 2024[16], slightly higher than China’s growth rate.
But the US-China divergence is most visible in each nation’s appetite for multilateral engagement. At the UN’s climate summit, COP30, in 2025[17], China presented itself as a global leader in renewable energy production. It does not treat renewables as just another sector, but as a core pillar of its strategy for economic growth and security[18]. Renewables have been central to China’s economic transformation since the 2010s.
However, China has troubles of its own, so it will also be looking for new ways to boost its own weak economy. It is currently falling short its own emission reduction targets[19]. Its solar panel industry is grappling with over-capacity and a price collapse[20], and regional competition with India is intensifying[21].
But as the US pulls back from the green economy, China can position itself as a broker of compatible green finance rules, especially for emerging markets that want capital without being trapped between competing standards, and hope that pays off.
Green rules are increasingly embedded in the global economy. Businesses and investors hate uncertainty, so any move by China to position itself as the international rule-maker for green products and green energy would position it well for the future.
References
- ^ stepping back (www.reuters.com)
- ^ China (theconversation.com)
- ^ dominates global green energy supply chains (www.foreignaffairs.com)
- ^ recent rollback (www.bbc.co.uk)
- ^ a further shift (www.forbes.com)
- ^ likely move (www.carbonbrief.org)
- ^ credible monitoring (www.mexc.co)
- ^ verification system (www.nortonrosefulbright.com)
- ^ new rules (taxation-customs.ec.europa.eu)
- ^ EU rules (eur-lex.europa.eu)
- ^ next few years firms (www.ifrs.org)
- ^ Paris agreement (unfccc.int)
- ^ US$ 2.1 trillion (£1.5 trillion), or 11.4% of GDP, in 2025 (www.carbonbrief.org)
- ^ US$117 billion in 2015 to US$290 billion in 2024 (www.ren21.net)
- ^ Some US states are taking action (www.oneearth.org)
- ^ 2.6 times from 2015 to 2024 (www.ren21.net)
- ^ COP30, in 2025 (theconversation.com)
- ^ strategy for economic growth and security (www.elgaronline.com)
- ^ emission reduction targets (www.carbonbrief.org)
- ^ over-capacity and a price collapse (www.alcircle.com)
- ^ regional competition with India is intensifying (www.reuters.com)
