EditFrom Russian gas to Chinese green tech: EU risks a new dependency
A report paints a stark picture where Europe’s climate transition is being built on Chinese foundations
The EU risks swapping its reliance on Russian fossil fuels for an equally harmful dependency on Chinese green technologies, according to a new policy report by The Environment and Public Institute, a
privately funded think tank that advocates for the free market and free research, titled “China Forces Its Way Into Europe’s Green Markets”.
The extensive report argues that while the EU has made significant progress in reducing its imports of Russian oil and gas, it has simultaneously exposed itself to another strategic vulnerability: overreliance on Chinese electric vehicles (EVs), lithium-ion batteries, solar panels and wind turbines.
“Breaking free from dependence on Russian energy resources is a painful process for the EU, which as recently as last year bought more oil and gas from Russia than it provided in financial aid to Ukraine,” the report begins. “Yet the Union shows a serious lack of flexibility when it comes to safeguarding its economic and political independence”, says Swedish journalist and analyst Jojje Olsson, author of the report.
The EU is replacing a harmful dependence on Russian gas with a new, dangerous dependence — this time on the dictatorship China in green markets like electric vehicles and solar panels.@jojjeols explains why climate, economy and security are at risk and what must be done now.
— EPHIEurope (@EphiEurope) September 29, 2025
Olsson highlights how Beijing’s industrial policy, backed by massive state subsidies, has enabled Chinese companies to absorb short-term losses in exchange for long-term market dominance.
The report paints a stark picture where Europe’s climate transition is being built on Chinese foundations. While this ensures cheaper solar panels and EVs in the short term, it exposes the EU to strategic, economic and security risks that could rival its former dependence on Russian gas.
“For several decades, China has used subsidies to gain an almost monopolistic position in rare earth metals, essential for high-tech manufacturing worldwide. This dominance is now leveraged as a tool in trade negotiations with both the United States and the EU,” the report warns.
China’s clean energy sector grew by 50% between 2022 and 2024, with investment volumes surpassing €800 billion last year. According to the UK-based think tank Carbon Brief, cited in the report, clean energy now makes up 10% of China’s economy, with EVs, solar power and batteries driving the surge.
Yet Olsson stresses that much of this growth is driven by overcapacity and price dumping. “More than 20% of China’s industrial companies are now operating at a loss. Still, the volume of exports rose by 14% in 2024, while their value increased by only 7% – clear signs of overcapacity,” the study notes.
EU caught off guard
By contrast, the United States has adopted aggressive protectionist measures. Both the Biden and Trump administrations imposed tariffs of up to 100% on Chinese EVs and 3,500% on re-exported solar panels.
The EU, however, remains far more exposed. “There are currently no tariffs at all on Chinese solar panels, which now dominate the continent. The EU is the largest export market for Chinese electric vehicles,” the report says. In 2023, one-quarter of EVs imported into the EU were manufactured in China, including brands like Tesla and BMW produced there.
Chinese firms are also investing heavily inside Europe. BYD is building a €4 billion EV factory in Hungary, while Chery has partnered with Spain’s EV Motors to produce 50,000 vehicles annually in Barcelona, with plans to triple capacity.
Olsson notes that while these projects may create local jobs, they also deepen strategic dependence. “Chinese companies are still subject to Chinese laws even when operating abroad,” the report states.
Solar and battery dominance
China now produces over 80% of global solar panels and controls up to 95% of some key components. The report describes how EU trade policy has undermined its own resilience. In 2018, Brussels removed tariffs on Chinese solar imports, partly to distinguish itself from Donald Trump’s protectionism. The result was a flood of cheap Chinese panels, which by 2023 accounted for 98% of EU solar imports.
The battery sector follows a similar trend. CATL, China’s largest battery producer, accounts for 40% of global production and has invested billions in European facilities. Meanwhile, Europe’s flagship battery project, Northvolt, collapsed in 2025 despite €18 billion in funding.
“Paradoxically, Northvolt’s bankruptcy has made Chinese actors more hesitant,” Olsson writes, citing regulatory and geopolitical uncertainty. But he warns that this does not reduce the strategic risk: “Lithium-ion batteries in particular must be treated as matters of national and economic security, not merely as climate initiatives.”
Security concerns and risks
Beyond economic issues, the report highlights national security concerns. During a major Iberian Peninsula power outage in April 2025, US officials revealed that Chinese-made solar inverters contained undocumented communication components described as “a built-in pathway to physically destroy the power grid.”
Similar risks were identified in Chinese lithium-ion batteries, heat pumps and EV charging stations. “In 2023, 78% of all inverters imported to the EU came from China,” Olsson notes, stressing the cyber vulnerability this creates.
The report concludes that Europe must avoid moving “directly from dependence on Russian gas to reliance on Chinese products for our green transition.”
Among the policy options suggested are maintaining and increasing tariffs on Chinese EVs and developing EU-level mechanisms to counter “transnational subsidies,” especially where Chinese firms assemble subsidised components within the EU.
Olsson proposed expanding EU domestic subsidies for key industries like batteries and electric motors and restricting remote access to Chinese-manufactured inverters, following Lithuania’s example..
“A combination of tariffs, domestic subsidies, and political decisions, even at the risk of displeasing an important trade partner like China, is necessary to avoid harmful dependence,” the report concludes.
Caption: Executive Vice President of BYD Stella Li speaks at the BYD press conference at theInternational Motor Show Germany IAA Mobility 2025 in Munich, Germany, 8 September 2025. The IAA Mobility 2025 takes place in Munich from 9 to 14 September 2025, featuring numerous world premieres, and a special focus on electric mobility and digitization. EPA/ANNA SZILAGYI
Updated: October 2, 2025 - 05:22
