Energy Insider: China Business Faces New Challenges as EU Pushes Clean-Tech Localization

Published: Mar. 6, 2026 4:17 p.m. GMT+8

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China business faces new challenges as EU pushes clean-tech localization

The European Commission has proposed sweeping legislation to strengthen domestic manufacturing in green technology, imposing strict local-content requirements and investment limits on sectors including electric vehicles, batteries and solar panels. Unveiled Wednesday, the draft Industrial Acceleration Act would introduce a “made in the EU” mandate for projects seeking public procurement contracts or state subsidies, marking the bloc’s most aggressive push yet to rebuild its industrial base and reduce reliance on foreign supply chains.

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The EU is proposing strict local-content rules for clean-tech, targeting China and risking higher costs for European manufacturers.
China’s power equipment exports surged 26% to $37.4 billion in 2025, with Saudi Arabia and the US as key markets.
Middle East conflicts have spiked chemical prices and caused a 14% three-day drop in Chinese lithium carbonate futures, impacting global supply and demand.

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Who’s Who

China Chamber of Commerce to the EU: The China Chamber of Commerce to the EU (中国欧盟商会) criticized the EU's Industrial Acceleration Act. They warned that requiring high-cost local components would increase production expenses and reduce the competitiveness of European manufacturers. They also viewed investment restrictions and technology licensing requirements as barriers to capital flow and forced tech transfers, considering the exclusion of China from the "trusted partner" list as systemic discrimination.

China Chamber of Commerce for Import and Export of Machinery and Electronic Products: The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) reported that China's power equipment exports rose 26% to $37.4 billion in 2025. Transformers and power cables were key drivers, making up 41% of this total. CCCME data also indicated Saudi Arabia as the second-largest destination for Chinese power equipment in 2025, while the US remained the largest overall market despite a decline in its share.

China Energy Storage Alliance: The China Energy Storage Alliance reports that the Middle East, with Saudi Arabia and the United Arab Emirates as key markets, has become a major destination for Chinese energy-storage products. In 2025, these two countries collectively ordered approximately 40 gigawatt-hours (GWh) of energy storage, making them the third- and fifth-largest overseas markets for Chinese suppliers, respectively.

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What Happened When

2023：: Saudi Arabia accounted for 1.3% and the U.S. for 8.3% of China's power equipment exports.

2025：: China's power equipment exports rise 26% to $37.4 billion; Saudi Arabia becomes the fastest-growing and second-largest destination, accounting for 5.3% of shipments; the U.S. remains the largest market, but its share declines to 6.3%.

2025：: Methanol shipments through the Strait of Hormuz account for 32% of global trade.

March 3, 2026：: Chinese lithium carbonate futures hit daily limit down, contributing to a three-day, 14% slide by March 4, 2026.

March 4, 2026：: The European Commission unveils the draft Industrial Acceleration Act, introducing a 'made in the EU' mandate for clean-tech projects seeking public procurement contracts or state subsidies.

March 4, 2026：: China’s benchmark methanol futures close up 3% at 2,553 yuan per ton following price surges in the prior two sessions amid Middle East conflict.

March 4, 2026：: Straight-run naphtha prices in Shandong province rise more than 5% from the previous day, to 7,500-7,600 yuan per ton.

As of March 4, 2026：: Chinese lithium carbonate futures fall for a third straight session; the May 2026 contract closes at 153,000 yuan per ton, down 3%.