Europe's strategic shift away from Russian fossil fuels in the wake of the 2022 invasion of Ukraine has inadvertently created a new and significant energy security vulnerability: a deep dependency on China for the supply chains of clean energy technologies.

Replacing One Dependency with Another

There was a "naive assumption" that transitioning to wind and solar power would resolve Europe's energy security concerns. Instead, the continent has largely traded its reliance on gas from "hostile states" for a reliance on Chinese-dominated supply chains for critical components and materials essential to renewable energy.

Vulnerabilities in the Clean Tech Supply Chain

The dependence is pronounced in several key areas:

• Wind Power: Permanent magnets, used in most wind turbines, require rare earth elements like dysprosium and neodymium. The production of these materials is dominated by Chinese suppliers.
• Batteries: China exerts an "iron grip" on the battery supply chain, a crucial technology for the energy transition, with EU reports warning of dependency risks.
• Solar Power: China's total dominance over the solar sector has been established for some time.

This "high concentration" of supply from Asia represents a "potentially an issue," as China has historically used its control over rare earths as a geopolitical bargaining chip.

The Ongoing Security and Cost Dilemma

Despite these vulnerabilities, European nations face competing pressures. Energy security remains a top priority, but so does the cost of energy for consumers and governments. High electricity prices, often driven by gas markets, may tempt countries to continue pursuing renewable pathways even with the supply chain risks, as cost is of "equal importance to national security." Consequently, Europe finds itself in a "tricky situation," having exchanged one form of energy insecurity for another.