China is leading the clean energy industry. Will it redraw the lines of global power?

Despite years of investment, policy advancements and climate pledges, Europe finds itself behind the curve in the clean industry race.

According to new research from Mission Possible Partnership (MPP) – a non-profit working to decarbonise energy-intensive industries – China and a growing number of developing countries are getting more clean industrial projects financed than Western nations, including the EU and the US.China’s dominance extends beyond new investment, too. It is home to 49 per cent of all clean industrial plants already operating or under construction worldwide.

These investments could affect more than just emissions. They could determine where factories and jobs go, who produces and supplies fuel, and even tip the balance of global power.China is dominating clean industry investmentOver the past year, a record 36 major clean industrial projects worldwide secured the financing they needed to move forward, according to MPP. China accounted for 23 of those projects, collectively worth more than €40 billion.MPP credits China’s rapid expansion in clean industries to years of supportive policy, renewable energy infrastructure and growing demand for alternative fuels.Today, for example, China accounts for more than 90 per cent of the world’s capacity to produce lower-emissions methanol, a fuel that can be made from biomass or renewable hydrogen instead of fossil fuels.

It also accounts for more than 40 per cent of global capacity for cleaner aluminium production, which uses low-carbon electricity rather than fossil fuels for power.China’s footprint is appearing beyond its borders, too.In August 2025, Southeast Asia’s largest wind farm began operating in Laos. Owned by a Thai-led consortium, the Monsoon Wind project uses 133 Chinese-built turbines to supply electricity to Vietnam’s manufacturing sector.As more countries look to reduce fossil fuel imports, China is becoming an important supplier of clean technology, says Belinda Schäpe of the Centre for Research on Energy and Clean Air (CREA).“This creates significant economic opportunities for China and could strengthen its geopolitical influence, particularly in emerging economies.”

The ‘industrial sunbelt’ is growing fastChina isn’t the only economy making inroads in clean industry. Across Africa, Asia and Latin America, countries in what MPP calls the ‘industrial sunbelt’ are attracting investment thanks to their abundant renewable resources.Over the last year, another six projects in emerging economies secured €4.7 billion in investment – more than the €4.3 billion worth of deals made in developed economies.Kenya, for example, is developing Africa’s first geothermal-powered green fertiliser plant.

Located in the Rift Valley, the facility aims to produce between 200,000 and 300,000 tonnes of fertiliser annually, most of it for domestic farmers. Paraguay has secured financing for a cleaner fertiliser plant, too.In South Africa, meanwhile, investors have backed the world’s second commercial project producing synthetic sustainable aviation fuel (SAF) from captured carbon dioxide and renewable electricity.And another 281 projects are in development across emerging economies, the MPP report adds.“This year, the new industrial sunbelt outpaced Europe for the first time, turning clean industrial plans into financed plants,” says Faustine Delasalle, CEO of MPP.

“From geothermal-powered fertiliser in Kenya to sustainable aviation fuels in Brazil, renewables-rich countries are converting their natural endowments into factories, jobs and revenue.”Can Europe catch up in the clean industry race?Although it is falling behind, the EU is trying to keep pace.In February 2025, the bloc launched its Clean Industrial Deal, pledging to mobilise more than €100 billion to support European clean manufacturing, lower energy costs and help industries such as steel and chemicals reduce their greenhouse gas emissions.Now, EU lawmakers are debating the Industrial Accelerator Act, which would speed up approvals for new factories and increase demand for European-made, low-carbon products.European policy has also helped stimulate investment in SAF, which accounted for one in three clean industrial investments worldwide over the past year.

Since 2025, fuel suppliers at EU airports have been required to provide at least two per cent SAF in the aviation fuel they supply.“Europe and the US still have significant industrial and technological strengths,” says Schäpe.Europe can already manufacture about twice as many EVs and wind turbines as it needs each year, and nearly three times as many heat pumps, she says, citing a recent Ember report. And while China is exporting more EVs overall, the combined value of exports from other countries – especially Germany – has increased by much more than those from China, according to CREA’s latest research.Still, investment in products and projects like these remains a major obstacle worldwide.

MPP is tracking more than 800 proposed clean industrial projects – about €4.3 trillion in potential investment – that have yet to secure financing, often because of either unclear policies or customers unwilling to sign on to longer-term purchasing agreements.“The challenge now is scale and pace,” Delasalle says. “We have seen a record number of final investment decisions in the last 12 months, but we need to move from tens to hundreds of financed [manufacturing] plants each year.”