What Europe should learn from the connection between clean
energy, economic strength and security
R.M. Westerink; 27 October 2026
For many Europeans, the energy transition is primarily a
response to climate change: a necessary effort to reduce emissions and protect
the planet.
In China, it also serves another purpose. It is helping the country
build industries, reduce vulnerabilities and strengthen its position in the
world.
A new report by researchers at the London School of Economics’
Grantham Research Institute presents China’s approach through three connected
ideas: clean, secure and cheap. [1]
Clean energy can reduce pollution and emissions. Energy
produced at home can reduce exposure to disruptions in imported fossil fuels.
And technologies that become cheaper through innovation and production at scale
can support economic growth.
The report suggests that these goals can reinforce one
another. That is a valuable insight for Europe, where climate policy,
industrial competitiveness and security are still often discussed as separate
subjects.
A strategy born partly from vulnerability
China’s interest in energy security is longstanding. Its
economy depends heavily on imported oil, much of which must travel through
vulnerable maritime routes, including the Strait of Malacca.
Chinese leaders have long recognised the risk: a disruption
far from home could affect transport, industry and the wider economy. The
Grantham report traces this concern to what Chinese policymakers called the “Malacca
Dilemma.” [1]
Wind turbines, solar panels, batteries and electric vehicles
do not eliminate every energy vulnerability. But they can reduce the need to
import and continuously burn fossil fuels. A car powered by electricity
produced within China is less directly exposed to an interruption in imported
oil than one running on petrol.
That gives the clean-energy transition a strategic meaning. It
helps China address climate and pollution concerns while gradually changing the
sources of energy on which its economy depends.
From energy policy to industrial strategy
China’s approach goes beyond installing renewable energy. It
has also invested in the industries that manufacture the technologies needed
for the transition.
Solar panels, batteries and electric vehicles have benefited
from sustained investment, large domestic markets, manufacturing scale and
competition among Chinese producers. Government direction and support have
played an important role, as have companies’ efforts to innovate and expand.
The result is visible well beyond China. Chinese clean-energy
products have become an important part of international trade and have helped
make some technologies more affordable. According to the International Energy
Agency, China accounted for roughly half of global exports of selected
clean-energy technologies in 2025, excluding trade within the EU. [2]
The economic opportunity is therefore larger than the sale of
individual products. It includes research, manufacturing, skilled employment,
infrastructure, services and relationships with customers and partners around
the world.
The Grantham authors also see clean industries as a potential
source of growth as other parts of China’s economy face difficulties. That does
not mean they will solve every economic problem China faces. But it does show
why the transition has become closely connected to the country’s vision of its
economic future. [1]
The strategy is still a work in progress
China’s achievements should not be confused with a completed
transition.
The country continues to rely heavily on coal. Renewable
electricity needs to be transported from where it is produced to where it is
used. Storage, grids and flexible demand must develop alongside new wind and
solar capacity. And clean industries face their own pressures, including
intense competition and questions about excess production capacity.
The report recognises, in particular, the importance of
improving transmission and electricity trading between Chinese provinces.
Building more renewable capacity is only part of the task; integrating that
capacity into a dependable energy system is another. [1]
Even so, the direction of China’s effort is clear. Clean
energy is being developed as part of a larger programme of economic and
strategic transformation.
That is where the opportunity for Europe begins.
Europe can connect its own ambitions
Europe already has many of the ingredients for a similarly
joined-up approach: scientific expertise, innovative companies, a large market,
established industries, skilled workers and experience in cross-border
cooperation.
It also has reasons to move. High energy costs affect
households and businesses. Dependence on imported fossil fuels exposes Europe
to volatile prices and events beyond its control. European industry needs
affordable energy and a credible route to modernisation.
The European Commission’s Clean Industrial Deal,
launched in 2025, explicitly connects decarbonisation with industrial
competitiveness and affordable energy. [3] Europe therefore does not need to
start from an empty page. Its task is to turn these connected ambitions into
sustained results across countries, sectors and political cycles.
China’s experience offers several useful clues.
First: treat clean energy as an economic opportunity
A transition of this scale inevitably involves costs. Homes,
factories, grids and transport systems must be adapted, and not every
investment will succeed.
But the expenditure also creates assets: more efficient
buildings, modern infrastructure, new businesses, technological knowledge and
productive capacity. The question for Europe is how to make those investments
support prosperity as well as reduce emissions.
That means helping existing industries modernise, creating
conditions for new companies to grow, and ensuring workers have access to the
skills needed in a changing economy.
It also means paying attention to households. A transition
that lowers emissions but leaves people unable to afford energy or improve
their homes will struggle to maintain public confidence. Its benefits need to
become visible in everyday life.
Second: build an energy system, not just individual projects
Solar panels and wind turbines matter. So do electricity
networks, storage, flexible demand and connections between countries.
Europe’s diversity can be an advantage. Countries have
different sources of energy, weather patterns and periods of peak demand.
Better connections can help them share resources and use electricity more
efficiently.
The Commission’s affordable energy plans already recognise the
importance of interconnections, electrification and a more integrated energy
market. [3] The opportunity is to make that integration tangible: faster
connections for new projects, more reliable supply and energy prices that
better reflect the benefits of clean generation.
A European energy system that works across borders can become
a source of both competitiveness and solidarity.
Third: use Europe’s scale
China’s large domestic market has helped companies produce,
learn and expand. Europe also has a large market, but it can be harder for
businesses to benefit from its full scale when rules, procedures and investment
conditions differ across national borders.
A more effective European market could help promising
technologies grow from pilot projects into widely available products and
services. Public purchasing, shared standards, research programmes and
long-term investment can all contribute.
This does not require Europe to produce everything itself. It
does require a clearer view of where European capabilities matter most—and the
confidence to develop them together.
Fourth: cooperate where cooperation creates value
China’s clean-energy capabilities also create opportunities
for Europe to cooperate.
European communities, businesses and industries can benefit
from affordable technologies. European and Chinese companies can work together
on research, production and deployment. Investment partnerships can create jobs
and skills in Europe when they bring real local value.
Cooperation can also extend beyond Europe. Many countries need
affordable electricity, modern infrastructure and support for their own
industrial development. European and Chinese expertise, finance and technology
could contribute to projects that help them meet those needs.
At the same time, Europe will want to maintain diverse sources
of supply and develop important capabilities of its own. A strong European
position makes cooperation more sustainable: it gives Europe the capacity to
choose its partners and contribute as one.
A European opportunity
China’s green strategy offers Europe more than an example to
study. It invites Europe to see the transition in a broader light.
Clean energy can contribute to climate protection, but also to
industrial renewal, energy security, innovation and international cooperation.
Those outcomes will not appear automatically. They depend on investment,
effective institutions, public support and the ability to turn shared goals
into practical action.
Europe has its own strengths and must find its own way. Its
opportunity is to bring those strengths together around a simple proposition:
A cleaner Europe can also be a more prosperous, secure
and capable Europe.
The question is how quickly—and how purposefully—Europe
chooses to make it happen.
References
- Mathias Larsen, Yanxi Zhou and Nicholas Stern, Resilient Growth for China in a
Turbulent World, Grantham Research Institute, 26 October
2026. www.lse.ac.uk
- International Energy Agency, Energy Technology Perspectives
2026: Energy Technology Manufacturing and Trade. IEA
- European Commission, Clean Industrial Deal.
European
Commission
