Navigating the Global Energy Transition: Clean Supply Chains and Carbon Pricing

The ETC briefing note highlights key strategies to accelerate the global energy transition through clean energy supply chains and carbon pricing. Despite China's dominance in clean technologies, a diversified approach is essential. The report emphasizes the importance of global cooperation on carbon pricing to ensure decarbonisation, particularly in 'hard to abate' sectors.

The ETC's latest briefing note, titled 'Global Trade in the Energy Transition: Principles for Clean Energy Supply Chains and Carbon Pricing', sheds light on the pivotal role technology advancements and carbon pricing play in propelling the global energy shift. Nevertheless, apprehensions regarding concentrated supply chains and the perception that carbon border adjustments are protectionist may impede progress.

The briefing underscores the need for developing domestic supply chains by adhering to six guiding principles to ensure an effective energy transition. Additionally, it stresses the significance of reaching global consensus on carbon pricing and carbon border adjustment mechanisms, which can drive decarbonisation in challenging sectors like steel and cement.

With China leading in clean technologies, the report acknowledges the importance of geopolitical strategies and domestic policy adjustments. It advocates for nearshoring efforts to diversify supply chains and align policies with international standards. The ETC supports initiatives like the EU's carbon border adjustment measure to make decarbonisation economically feasible across sectors.