For many years, power safety has meant oil. International locations fearful about their dependence on the Center East and Russia, the safety of delivery lanes, and the geopolitical penalties of counting on a small variety of producers for the oil that powered international economies. The transition to renewable power was imagined to rebalance that equation. But in doing so, we could also be making a doubtlessly higher vulnerability, because the clear power provide chain is dominated by China.
Take Europe for instance. The yr earlier than Russia’s invasion of Ukraine, Russia equipped 45 p.c of the EU’s pure gasoline imports. The battle has pressured European nations to scramble for brand spanking new power sources.
The battle within the Center East confirmed once more how shortly concentrated power provides can grow to be an financial legal responsibility. Roughly one-fifth of world oil consumption passes by the Strait of Hormuz – or did, earlier than the strait was successfully closed by the battle.
Clear power can scale back publicity to those particular chokepoints, however the world should diversify its power dependence with out merely relocating it.
China leads within the industries powering the subsequent section of the worldwide economic system. It’s the world’s largest provider and exporter of inexperienced know-how. In July 2026, China’s inexperienced power exports rose 51 p.c year-on-year, with new power autos rising an astonishing 90 p.c.
China dominates the clear power worth chain. Right now, the nation supplies roughly 85 p.c of world photo voltaic manufacturing capability and 80 p.c of lithium-ion batteries. That is primarily a monopoly. In electrical autos, China accounted for nearly three-quarters of world manufacturing in 2025.
Its management additionally extends upstream. China holds essential positions in processing and refining the minerals important to new power applied sciences, from batteries to electrical motors and wind generators. It additionally possesses a lot of the manufacturing experience – and more and more the tools – wanted to show these supplies into completed merchandise.
Subsequently, clear power dependence extends throughout a complete industrial ecosystem – from processing by know-how, parts and manufacturing tools to the completed product. A disruption at any level within the provide chain might reverberate by all the system.
The Worldwide Power Company (IEA) estimated that every month of a halt in Chinese language battery provide chain exports might scale back output from EV factories elsewhere by some $17 billion, with greater than half of these losses occurring in Europe.
The chance shouldn’t be hypothetical. China’s use of export controls on uncommon earths and different essential supplies has demonstrated how concentrated provide chains translate into strategic leverage. China mines roughly 60 p.c of the world’s uncommon earths however produces about 90 p.c of its uncommon earth everlasting magnets, leaving downstream producers with few fast options.
Oil reserves are fastened by geology, whereas China’s dominance in clear know-how is the product of commercial coverage, capital funding, and accrued manufacturing experience. That ought to, in principle, make clear power dependence extra reversible. In observe, nonetheless, diversification is troublesome.
A essential a part of China’s benefit is manufacturing effectivity. The IEA attributed greater than 40 p.c of China’s battery value edge over Europe to automation and effectivity. In essential mineral mining and refining, China’s place additionally rests on many years of accrued processing capability and a willingness to bear environmental prices that many different nations have been reluctant to just accept. None of this may be replicated shortly.
China’s monumental funding and innovation in clear know-how has helped drive down prices and speed up deployment. Making an attempt to exclude China solely would make the power transition slower and costlier. Interdependence shouldn’t be the issue, and power safety has by no means required producing every thing at dwelling. It requires sufficient variety that no single provider can disrupt the system.
As with commerce, the reply shouldn’t be decoupling however diversification.
International locations ought to determine the place home capability is strategically needed, construct various sources of provide with allies and rising markets, and proceed buying and selling and investing with China the place it makes financial sense.
It may be executed, but it surely takes time, capital, and political will. Las Vegas-based MP Supplies operates North America’s solely uncommon earth mine of scale, producing greater than 10 p.c of world uncommon earth provide. The corporate is constructing heavy uncommon earth processing capability and investing greater than $1.25 billion in a magnet manufacturing campus. Importantly, its technique is changing into worldwide: in 2025, MP Supplies, the U.S. authorities, and Saudi Arabia’s Maaden agreed to develop a Saudi uncommon earth refinery to provide uncommon earth oxides to U.S., Saudi, and allied producers.
This one refinery shouldn’t be, by itself, an answer, but it surely factors to the form of allied, government-supported funding in processing that rebalancing requires.
Whereas the world will stay dependent upon fossil fuels for the foreseeable future, the diversification to scrub power will proceed, and the stakes will rise as demand grows. The world shouldn’t spend many years lowering its dependence on Center Japanese and Russian hydrocarbons solely to find that it has exchanged one type of strategic dependence for an additional – this time on China.