The Green Transition as a Vector of European Strategic Autonomy?
Opportunities and limits of EU-China interdependence in green technologies. A commenary by Thomas Rowley, and Romain Svartzman
This commentary draws on reflections and exchanges from an event held on 6 May 2026, jointly organized by the Institute for European Policymaking at Bocconi University (IEP@BU) and Generali, exploring the evolving dynamics of EU–China relations in the green energy sector.
For decades, Europe's engagement with globalization rested on a simple logic: import cheap components, export high-value manufactured goods, and rely on open markets to do so. That model is under strain. EU exports, especially cars and machinery, face increasingly competitive alternatives – especially from China – while Europe's green transition relies on concentrated external supply in batteries, solar panels and critical minerals. For instance, China accounts for 85% of global battery cell production capacity, 80% of solar PV supply chains, and is the leading refiner of most critical minerals.
Chinese scale in these goods can lower costs and support faster deployment, but strategic concerns may arise where large demand, sensitive products, high import penetration and concentrated external supply overlap, especially in a context of geoeconomic fragmentation.
It is in this context that the EU wants to turn green technology into a vector of reindustrialization. The Clean Industrial Deal, Net-Zero Industry Act and proposed Industrial Accelerator Act (IAA) all point in the same direction: Europe should use its large domestic demand for green technologies not only to accelerate the transition, but also to rebuild industrial capacity and offset lopsided dependencies. In sectors where domestic capacity is thin or uneven, inward FDI and joint industrial projects may become part of the answer.
To locate where Europe has industrial capacity and where it relies on external supply, we focus on the electrification-linked manufacturing base. We define three baskets: Green Core goods, including EVs, batteries, solar PV and wind equipment; Grid and Electrification Enablers, including converters, transformers and cables; and Broad Upstream Inputs, including silicon and battery inputs. We operationalize these baskets with 63 HS6 product codes in UN Comtrade and map them to Eurostat PRODCOM production data for 2024.i
Europe has industrial strengths, but product-level vulnerabilities
In aggregate, the EU’s electrification-linked manufacturing base looks more balanced than a dependency narrative would suggest. Across the full 63-product basket, apparent consumption, defined as production plus imports minus exports, reached €309 billion in 2024, while EU production was close behind at €304 billion. The EU was a net importer in Green Core goods, with €138 billion in production against €148 billion in apparent consumption, but a net exporter in Grid and Electrification Enablers, where production reached about €145 billion. In the latter, Europe maintains strengths in goods essential not only for renewable-energy integration, but also for the energy-intensive digital transition, from AI data centers to advanced manufacturing.
Figure 1 shows that across the full basket, China accounted for 49% of extra-EU imports in 2024, totaling €74 billion, far ahead of the next top-origins – the United States, South Korea, the UK and Japan. In Green Core goods, its share was 68%, driven by products that are central to the transition, including batteries, solar PV and EVs.
Figure 1: EU Green-Tech Consumption Exposure and Import Origins, 2024
Figure note: Each pair of bars shows one product basket. The narrow bar (light-blue and grey) shows EU imports as a share of apparent EU consumption, with grey indicating the share imported from outside the EU; the wider bar, in full color, expands those extra-EU imports by origin. Labels above the bars report apparent consumption and extra-EU imports in € billions. The label “Other advanced” include the following countries: UK, Canada, Australia, New Zealand, Switzerland, Norway, and Singapore.
Source: Authors’ calculations using UN Comtrade and Eurostat PRODCOM.
Turning to specific products, Figure 2 shows seven product codes where imports account for more than half of apparent EU consumption and more than half of imports come from a single supplier. China is the dominant import origin in six of these cases, spanning mostly downstream Green Core goods and Grid and Electrification Enablers, including lithium-ion batteries, solar PV modules, static converters, inductors and low-voltage cables with connectors. South Korea leads in upstream oxometallic salts.
Figure 2: EU Green-Tech Extra-EU Import Exposure, 2024
Figure note: Bubbles represent HS6 products in the 63-code basket. The x-axis shows EU apparent consumption; the y-axis shows China’s share of EU extra-EU imports; bubble size shows extra-EU import penetration; colors show product category; black rings indicate the combination of extra-EU import penetration exceeding 50% and more than half of imports come from a single supplier. Source: Authors’ calculations using UN Comtrade and Eurostat PRODCOM.
Letting China in? From import exposure to embedded green FDI
High import penetration is not automatically a problem. Diversified, substitutable imports allow Europe to focus on its comparative advantages. But when import reliance is concentrated in products central to EVs, energy storage, renewable integration and grid flexibility, Europe faces a choice. It can: (i) rely on imports as if the status quo were sustainable, (ii) try to rebuild everything domestically as if it had the capacity and time to catch up on its own, or (iii) pursue a more targeted path, using some domestic manufacturing and input diversification – where possible – but also inward investment and joint industrial projects to build local capacity precisely where import dependence is most concentrated.
The third option is likely the most realistic, but it is not automatically successful. For instance, while the proposed IAA is welcome in seeking to ensure that inward investment contributes to local labor, R&D, supplier development, local content and IP or know-how transfer, the trade-off is delicate: weak rules may allow thin assembly platforms with limited local value added; overly restrictive rules may delay or redirect investment elsewhere, including in sectors where Europe’s current capabilities are weakest.
This is why green FDI should be a central object of future research. A “Green FDI Observatory” would move the debate from aggregate claims about industrial vulnerability to project-level evidence, tracking investment across batteries, EVs, solar, grid equipment and upstream inputs, including extra-EU and intra-EU multinational projects and joint ventures. It would focus on how real dynamics unfold: technology transfer, value-added distribution, labor outcomes, financing and risk allocation, drawing on trade economics, industrial organization and political economy to assess what makes inward investment genuinely beneficial for all sides.
Such an observatory could also assess whether shifting from importing Chinese green technologies to co-producing them would reduce Europe’s vulnerability to supply-chain disruption, or whether dependence would simply take a different form. That is, it would explore whether and how Europe can shape inward investment so that it strengthens European employment, supply-chain resilience, technological capability and public returns.
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
