IEA warns of supply chain concentration in clean energy technologies
The International Energy Agency warns of reliance on a handful of clean technology supplier countries, with China dominant, as the global market could reach $3 trillion by 2035.
| Sectors | Energy Issues, Energy Storage, Batteries |
|---|---|
| Themes | Policy & Geopolitics, Energy Security, Industry & Execution, Supply Chain |
| Countries | China, India |
Global supply chains for clean energy technologies remain concentrated among a small number of countries, according to a report by the International Energy Agency (IEA). China holds the largest share of these supply chains, a configuration the agency considers unlikely to change significantly before the end of the decade. The IEA urges nations to diversify their supply sources and strengthen their own industries.
Supply chains vulnerable to choke points
The IEA notes that while China's dominance is less extreme in final assembly, every major energy supply chain has a choke point. If one key link were to fail or be cut off, the entire system would collapse, with no other producers able to fill the gap. The impact of a trade freeze with China varies depending on the technologies involved.
Disrupting battery supplies would represent, according to the IEA, a massive multi-billion-dollar hit to car makers, especially in Europe. Solar disruptions would hit Southeast Asia and India hardest, though with a smaller total price tag. These structural vulnerabilities are reflected in procurement decisions for major infrastructure projects, such as the 2 GW of batteries secured by Transgrid to strengthen the New South Wales grid.
A market projected at between $2 trillion and $3 trillion by 2035
The IEA projects that the clean energy market is on track to become as large as the oil industry. Depending on how aggressively governments follow through on their plans, the market can be worth between $2 trillion and $3 trillion by 2035. Earlier-stage technologies are also showing strong growth momentum.
Investment in low-emissions hydrogen production projects rose by 80% year on year in 2025. Deployment of carbon capture, utilisation and storage (CCUS) is also advancing. Despite a brief slowdown in 2024, global trade in clean energy tech grew by 10% in 2025, with demand rising even as prices for solar panels and batteries continue to drop.
