China and EU drive global energy transition

For years, the divide between European and Chinese energy strategies seemed stark. Europe was defined by markets and multilateral institutions, often exporting its own rules globally through what experts refer to as the “Brussels effect.” China, conversely, focused on industrial policy, massive infrastructure investment and manufacturing capacity. That distinction is fading as both regions race to secure their own interests in a rapidly changing global economy.

Europe Adopts Industrial Policy

European policymakers have realized that ambitious climate goals cannot be met without a domestic industrial base. The EU has passed measures like the Industrial Accelerator Act and the Critical Raw Materials Act. These policies aim to ensure that reducing carbon emissions does not simply lead to greater dependency on foreign supply chains. The shift represents a return to state interventionism that had largely vanished from European politics.

Rebuilding an industrial base requires capital, cheap energy and dense supplier networks—none of which can be conjured up through regulation alone. The challenge is significant, especially as Europe attempts to pivot back to manufacturing while maintaining its environmental commitments. Officials argue that climate ambition without industrial capacity produces dependency, not resilience. The country is learning that rules without productive capacity do not provide strategic autonomy, just as China is learning that factories without standards limit international influence.

China Pushes for Standard Setting

On the other side of the world, China has concluded that leading the manufacturing of solar panels and electric vehicles is insufficient to guarantee long-term influence. The country has pivoted toward governing the frameworks of these technologies. Through the Global Energy Interconnection Development and Cooperation Organization, Beijing is convening committees to establish protocols for photovoltaics, hydrogen, and grid intelligence. This move reflects a recognition that writing the rules is often more powerful than producing the goods.

These technical committees may look like engineering exercises, but they represent an attempt to “own the operating system” of the clean energy economy. The entity that sets industry standards does not merely regulate a technology; it positions itself to steer investment and decide what is interoperable with what. This allows a country to lock in the architecture that everyone else must build upon. The traditional approach to industrial policy is changing because the focus is shifting from inventing technologies to governing value chains.

The transition from industrial output to governance is not entirely new to geopolitics. For example, during the 19th century, the nation that defined the metric system and electrical voltages effectively dictated the pace of global development for the following century. Similarly, the current struggle over clean energy standards suggests that the defining feature of the coming decades will be the architecture of the grid itself, rather than the speed of its construction. The cold war of standards is heating up as both Beijing and Brussels attempt to master what they previously outsourced.

A Fragmented Global Setting

The outcome of this contest is complicated by a third group of major players. Nations like India, Indonesia and Brazil are developing their own industrial strengths to leverage critical minerals and markets. Meanwhile, the United States has largely withdrawn from the race, opting instead for protectionist tariffs rather than building the infrastructure or standards necessary to lead the transition. The U.S. has chosen to throw up tariff walls and abandon the field of electrification entirely.

Most countries will neither write the standards nor build the factories. Instead, they will inherit operating systems designed in Brussels or Beijing, accepting dependencies they never chose. The stakes are high, as the governance of value chains is as much a political question as a technical one—a small constitution that can quietly allocate advantages for decades.

For Europe, the lesson is to craft sound regulations that are worth adopting, rather than merely enduring. The energy transition rewards the rare combination of production capacity, the authority to set rules, and the institutions to hold complex systems together. Neither side can win simply by relying on its traditional strengths. The final phase of this race will not be won by the most factories, but by whoever controls the operating system of the future economy.

Emmanuel Guérin is the vice-dean of the Paris Climate School at Sciences Po and a special adviser to the CEO at the European Climate Foundation.