Obstacles on China's new energy path （Zhang Min）

n recent years, scientific cooperation between China and the EU has focused on climate change and green energy industries. But there are problems that need to be addressed.

Technology transfer has been slow.

China and the EU are complementary in terms of energy cooperation. The EU countries have core technologies and research funding. China has a huge market and plentiful resources. This means there is a solid basis for cooperation.

In 2010, the Institute for Clean and Renewable Energy (ICARE) and the Europe-China Clean Energy Center were established. The EU-China NZEC (Near Zero Emissions Coal) project entered its second phase the same year. These projects will certainly deepen the technology partnership between the two sides.

But progress in technology transfer from the EU to China has been slow. An assessment report by the UN Clean Development Mechanism concludes that the EU has limited technology transfer to China, and this is affecting the effectiveness of new energy cooperation.

Opportunities and challenges

The EU and U.S. are competing for the lion's share of the Chinese clean energy market. The EU hopes to expand its market share through active cooperation.

China is a massive market for clean energy products and technologies. In 2009, worldwide investment in clean energy totaled US$162 billion. China ranked first, with investment of US$34.6 billion, according to the Pew Research Center. The U.S. Department of Commerce forecasts that China's clean energy market will top 100 billion dollars by 2020.

China's plan for new energy calls for 15 percent of primary energy consumption to come from non-fossil fuels by 2020.

But clean energy technology is the key to realizing the potential of China's clean energy market. And apart from the field of electric cars, China systematically lags behind the EU and the U.S. in clean energy technologies.

Surplus capacity

Too many Chinese companies have entered the clean energy market to take advantage of subsidies and favorable policies. This has caused a structural surplus in the new energy equipment industry in China.

In fact, many Chinese new energy companies are little more than assembly plants, lacking competitive advantage in clean energy technologies. There is overcapacity in both the photovoltaic and wind power equipment manufacturing industries. Meanwhile China continues to pay high prices to import core wind power equipment.