Energy Insider: How China and EU Can Still Collaborate, EV Battery-Makers Welcome U.S. Tariff Cut

This week’s Caixin energy wrap highlights key developments in China’s climate and energy landscape, focusing on collaborations, trade, investments, and policy shifts. The main topics covered include China-EU cooperation in green energy, U.S.-China trade progress on lithium batteries, a major Chinese wind energy investment in Brazil, and pivotal regional reforms in renewable energy pricing in China.[para. 1]

1. **China-EU Cooperation in Green Energy**: As political tensions hamper direct collaboration between China and the European Union (EU), experts suggest the two sides can still jointly promote green transition efforts in third countries. Erik Berglöf, chief economist at the Asian Infrastructure Investment Bank, proposed that combining European policy expertise with Chinese technological strengths could help developing countries secure financing and adopt affordable clean energy technologies. This collaborative approach aligns with China’s “third-party market cooperation” under the Belt and Road Initiative, which has long fostered joint Chinese-European projects in emerging markets. Zhao Ping, a Chinese trade official, noted growing interest among European firms in partnering with Chinese companies, particularly in Africa and Latin America, as cited in a 2024 trade report.[para. 2][para. 3][para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14]

2. **U.S. Tariff Cuts on Chinese Lithium Batteries**: Chinese lithium battery exporters welcomed the U.S. decision to sharply reduce tariffs after trade negotiations in Geneva. New U.S. tariffs on vehicle-use lithium batteries dropped from 173.4% to 58.4%, while those on non-vehicle-use batteries declined from 156% to around 41%. The U.S., still China’s primary lithium battery export market, imported $15.3 billion worth in 2024, making up 25% of China’s total battery exports. However, ongoing trade frictions have altered patterns, with Germany surpassing the U.S. as China’s top battery customer in February 2025, and U.S. purchases falling 14% from January to March.[para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22]

3. **Chinese Wind Giant’s Green Fuel Investment in Brazil**: Envision Group, a major Chinese wind turbine maker, signed a significant agreement with Brazil’s Trade and Investment Promotion Agency to develop green fuel supply chains. The partnership, formalized during Brazilian President Luiz Inácio Lula da Silva’s visit to China, includes building “Net-Zero Industrial Parks,” the first of such projects in Latin America, to produce sustainable aviation fuel. Envision will also provide advanced equipment for renewable hydrogen and ammonia production. The deal is part of $4.7 billion (27 billion reais) in new investments between Chinese companies and Brazil, reflecting deepening economic ties. President Lula’s delegation of over 400 officials and business leaders aimed to strengthen the strategic partnership between China and the Global South.[para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30][para. 31]

4. **Shandong Leads Renewable Energy Pricing Reform**: Shandong became the first Chinese region to propose market-based pricing for wind and solar power. Projects grid-connected by May 31 retain a fixed settlement price aligned with coal-fired power, but all generation must be traded in the market. New projects after June 1 will have a variable market-driven price. Guangdong soon followed with similar proposals, suggesting new wind and solar farms could receive a market price for 90% of average industry output. These reforms respond to central government policies aiming to let market forces set renewable energy prices instead of local authorities. Shandong’s renewable energy capacity reached 115 GW in 2023, surpassing coal, while Guangdong saw rapid expansion, adding 16.8 GW in wind and solar last year.[para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46][para. 47][para. 48]