While the world reels from interruption to crude oil supply chains, a new International Energy Agency report shows clean energy technology manufacturing supply chains are at risk, largely due to the world’s reliance on China’s advanced manufacturing and distribution expertise.
The International Energy Agency (IEA) Energy Technology Perspectives 2026 report addresses clean energy technology manufacturing supply chain insecurity, due in part for the world’s reliance on China’s manufacturing dominance in the sector.
The report says, China is the main supplier in most clean tech supply chain stages and accounts for about 85% of solar and 80% of lithium-ion battery supply chain production capacity, 95% of PV wafers, and 97% of anode materials.
Image: International Energy Agency, Licence: CC BY 4.0
IEA modelling of the impact of losing Chinese clean technology exports shows that for the final downstream stages of solar and batteries, capacity outside China could, “in theory” have met most non-Chinese demand in 2024.
“Yet each of these supply chains contains several steps where production outside the largest exporter is not sufficient to meet demand, and at least one step where it covers less than one-quarter,” the report says, determining that a supply chain is only as secure as its weakest link.
Image: International Energy Agency, Licence: CC BY 4.0
A large portion of China’s solar industry production capacity is located outside China, with the largest company holding between 5% and 20% of global production capacity in the solar industry for most technologies, but which also brings risks of targeted sanctions, financial uncertainty or labour disputes.
In each technology segment, the largest facility was found to have the capacity to supply between 2% and 17% of global demand in 2024.
“Solar wafer manufacturing sits towards the top of this range, with one facility in the Inner Mongolia autonomous region of China, capable of producing the equivalent of the entire solar demand of the European Union and India combined,” the report says.
Image: International Energy Agency, Licence: CC BY 4.0
The IEA says global investment in manufacturing for solar, wind, batteries, electric vehicles (EVs), electrolysers and heat pumps, dropped in 2024 by $29 billion (USD 20 billion) to $290 billion, a trend estimated to have continued in 2025.
“The United States and European Union are estimated to have accounted for around 30% of global manufacturing investment combined in 2025, up from 15% in 2023, which marginally increased global supply chain diversification.”
“China maintains an outsised role in international trade in clean energy technologies, with its gross exports exceeding $239 billion in 2025 or 50% of the global total excluding intra-EU trade, or around 15% of its trade surplus across all goods, which is approximately $1.7 trillion in 2025.”
Image: International Energy Agency, Licence: CC BY 4.0
Despite recent increases in tariffs and duties in some countries, trade remains central to meeting rising demand, with the value of global net clean technology trade over the next decade rising to more than double that of 2024.
Image: International Energy Agency, Licence: CC BY 4.0
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
Popular content
