China hinders solar expansion + Habeck’s green US free trade + China’s ETS and CBAM

Germany’s economy minister Robert Habeck was in Washington this Monday and Tuesday to negotiate the direction of the Inflation Reduction Act with his US counterparts. The goal is to nip a green economic war between the US and the EU in the bud. Habeck came with proposals for green free trade. Bernhard Pötter is on the ground for us and has the details.

While Habeck is working on improving German-American relations, China has caused a lot of raised eyebrows in the US. A Chinese spy-or-weather balloon – balloon experts are divided – recently passed over US territory and was ultimately shot down. What flew under the radar was a news item that could have a far greater impact on the Western-Chinese relationship: The People’s Republic wants to restrict the export of solar manufacturing equipment. We have taken a closer look at the plan: It will set back plans for the development of a Western solar industry – and slow down the energy transition.

China shows much less activity when it comes to reforming its emissions trading system. It will have no effect on the climate for years to come. Experts do not expect a clear allowance cap and an expansion to other economic sectors before the end of the decade. Our analyses show the ETS problems and what they mean for Europe’s CBAM.