# New Strategic Alliances for Green Industrialisation **Date de l'événement :** 01/11/2025 * Publié le 01/11/2025 ### Date 01/11/2025 ## Chapô **The strategic role played by carbon-free technologies has shifted the balance of power in favour of those who hold critical raw materials. Europe must negotiate green partnerships with African countries based on their industrial needs and sustainable development trajectories. By ushering in a new era of trade and investment partnerships with countries in the Global South, the EU would also pave the way for new rules governing value chains.** ## Corps du texte As crises and deliberate disruptions to international rules cloud the horizon and make the future uncertain, multilateralism appears to be falling apart, reducing action to forms of reactivity or resilience. The European Union (EU) seems incapable of defining a long-term economic and geopolitical strategy, even though its leaders talk constantly about security and competitiveness. Yet changes in global economic and technological relations seem inevitable. European countries and other medium-sized powers risk being sidelined, unless they can form alliances with each other. Such alliances are essential to reviving collective momentum for climate action. But are they possible? The reconfiguration of global value chains ------------------------------------------ The accumulation of crises and disruptions that the world has experienced over the past five years should not obscure more structural issues that should be prepared for. While climate and health risks and political conflict have increased, a reconfiguration of global value chains is underway. This is linked to digital innovation, the electrification of production systems and other uses of energy that include the massive increase in the share of electricity in the industrial, transportation and residential sectors enabled by the falling cost of power technologies. This reconfiguration is also linked to a shift in global economic power towards Asia. All these developments are disrupting the balance of power between countries and their respective ability to attract investment and capture added value and jobs. Three points should be noted to avoid presenting these major trends as purely deterministic. First, they clearly do not occur independently of public policy, which influences them, but once they are triggered, these trends become irreversible and inevitable. The increasingly rapid decline in the production costs of renewable energy technologies is one of the most striking features of the reconfiguration. Their deployment is accelerating, as indicated in the International Energy Agency report published in 2023, prior to COP28, and confirmed at the United Nations General Secretariat summit in July 2025. The Paris Agreement contributed to this momentum in 2015 by aligning the goals and expectations of public and private actors, investors, businesses and industries around a common global decarbonisation goal. The agreement has, in turn, benefited from the rise of renewable technologies, boosting the credibility of the decarbonisation trajectories of several countries and sectors. In 2019, a number of the world's most innovative economies (the EU with its Green Deal, followed by China, South Korea and Japan) committed, over just a few months, to making carbon neutrality the guiding principle for the long-term modernisation of their economies. They also committed to pursuing more ambitious climate policies, in a spirit of mutual reinforcement between public policies and technological and economic dynamics. Second, technological developments should not simply be presented as a transition towards decarbonisation. Rather than replace fossil fuel technologies, they complement or hybridise with them. This is particularly true in power generation, where the growth of renewable technologies does not directly lead to a reduction in fossil fuels. However, changes in end uses – particularly the shift from internal combustion to electric engines and from boilers to heat pumps, a process known as the electrification of end use – as well as energy efficiency efforts, are structural transformations for value chains. It is clear that these changes will not be enough to protect the climate unless fossil fuels are eliminated, but the strategic role now played by carbon-free technologies has shifted the balance of power in favour of those who hold critical raw materials and the technologies to process them. Third, these technological advances remain fraught with uncertainty. Their impact on the balance of power and economic dependencies can also be seen as the cause of current military and trade conflicts. Some countries are seeking to preserve their dominant position in value chains, particularly those involving fossil fuels, as is clearly evident in the case of Russia and the United States. Because of these conflicts and the supply disruptions caused by the COVID-19 pandemic, economic actors and governments have moved away from supply policies guided solely by the search for the lowest price, instead seeking to reduce their dependence and increase their strategic autonomy (for example, by friendshoring and nearshoring). What is the role of medium-sized powers? ---------------------------------------- All these adjustments are mitigating the general trend of a shift towards Asia and preventing any clear conclusions from being drawn. However, the disruptions are significant enough to explain major strategic changes among the big powers. In particular, they put a superpower like the United States in a state of unease. Faced with the risk of losing its economic and political supremacy, the US administration in place since January 2025 is seeking to reaffirm its power in these value chains by wielding threats and short-term transactional approaches, to the detriment of multilateral negotiation. In doing so, the US is jeopardising the very existence of commonly respected rules, notwithstanding the fact that these rules have served its own dominance by ensuring the stability needed for the globalisation of trade. The international order created after World War II under the aegis of the US has even been criticised for only partially respecting its own rules and, above all, for benefiting Western countries. Meanwhile, it behoves China to question the viability of its economic model, which continues to rely more on exports than on its domestic market. China has nonetheless taken advantage of the scale of its market to gain competitive advantages and secure a dominant position in several key technologies and innovations. It has done so thanks to an industrial policy based on fierce competition between the main national players, for example in the electric vehicle sector, and on state aid and targeted public procurement. Despite the long-term fragility of its model, it is in China's interest to use its overcapacity in these technologies to ensure medium-term stability in its access to international markets in all regions, a stability that is based on rules and governance as multilateral as possible. Its support for the Paris Agreement is not solely due to its concerns about the impacts of climate change on its own territory. Indeed, the agreement also guarantees solid markets into which China can sell its low-carbon technologies. Thus, at a time when conflicts are multiplying and rules are falling by the wayside, it is paradoxically reasonable to bet that realism will be on the side of peace and cooperation. Peace benefits China's economic and political strategy, and cooperation on a number of standards (long-term decarbonisation targets and green finance principles, for example) will not prevent fierce competition. Peace will ultimately grant the US economy greater supply chain resilience than a purely unilateral approach would. Interdependencies are inevitable, whether they are economic or result from co-dependence on shared resources and the systemic effects of environmental degradation. A decline in the US economy carries risks, but it could conceivably coexist with a revival of multilateralism, if only fragmentary, under China's impetus or with its blessing. In other words, it is likely that forms of governance with variable geometries will be put in place. These might not include all countries but nevertheless would have an impact beyond the signatory countries. This is already the case with the Convention on the Law of the Sea. Although the United States is not a signatory, it has come to recognise it as a form of customary international law. Even if only partial, these forms of governance will be essential for organising interdependencies and value chains, and for establishing the predictability that economies need. What can other countries do in this context? It is obviously in their interest to defend international rules that protect the weakest. Even medium-sized powers have an interest in forming alliances with each other to have a greater say in defining these rules and to prevent them from being created solely in the interests of the economic superpowers. Despite the size of its internal market, the EU must accept that it is only a medium-sized power, as illustrated by its current weak negotiating position vis-à-vis Washington. Its ability to form economic and political alliances with other medium-sized powers will therefore be decisive for its own future. This will also help it to develop strategic partnerships in trade and investment that meet the Sustainable Development Goals set for 2030 by the United Nations as well as the objectives of the Paris Agreement. Strategic partnerships and shared industrial ecosystems ---------------------------------------------------------- Since the 2019 Green Deal, the European Union has been offering other continents, particularly Africa, a new range of partnerships on green energy and industrialisation that guide both its development aid and its trade policies. This initiative had already been proposed at the United Nations Conference on Sustainable Development, known as Rio+20, which took place in 2012 and focused on the green economy. However, it was rejected by the countries of the Global South, which saw it as a manoeuvre to defend European commercial interests under the guise of environmentalism. While they accepted the idea that renewable energy would likely accelerate electric grid expansion, especially in rural areas, African countries expressed scepticism about the ability of these technologies alone to spur industrialisation. Yet it is precisely industrialisation and the creation of formal, decent jobs that they need, given the increasingly fast growth of their working-age population. African countries also criticised the EU for unilaterally decreeing, with its carbon border adjustment mechanism, a trade measure that is likely to have a significant impact on their economies, despite the mitigation and targeting measures put in place by the European Commission (technical assistance for the traceability of carbon footprint measures in supply chains, subsidies for access to decarbonised technologies, etc.). The gap between Europe and African countries, including economic powerhouses such as South Africa, thus appears to have widened. Meanwhile, opportunities for strategic alliances, which are essential for Europe, have not grown. As a result, the African continent has every reason to play the China, India, Gulf country and Turkey cards as much as the Europe card. > **Carbon border adjustment mechanisms** > Carbon border adjustment mechanisms have been under discussion since the 2012 United Nations Conference on Sustainable Development (known as Rio +20). Adopted in 2023 by the EU, where they will apply beginning in 2026, these mechanisms tax certain imported products (steel, aluminium, hydrogen, etc.) based on their carbon dioxide emissions. Countries of the Global South criticise the EU for creating a trade barrier and suspect that the main goal is to protect European economic interests. Pressure to create a completely new kind of trade and investment partnership has recently grown, in the aftermath of the EU and South Africa found themselves in the crosshairs of the US government. During their summit on 13 March 2025, both parties declared their intention to usher in a new era through a pilot agreement between the EU and the Southern African Development Community, inspired by the Clean Trade and Investment Partnerships designed and presented by Mario Draghi in a 2024 report. This type of partnership would have the major advantage of promoting the creation of shared industrial ecosystems between countries, rather than seeking to determine whether the supplier country or the customer country captures the most added value and jobs in the value chain of a single critical material. For example, with a lithium supplier such as Chile, this would guarantee long-term security of supply to a Europe obsessed with critical materials, while ensuring that investment capacity is directed as much towards the country of extraction as towards Europe. > **Clean Trade and Investment Partnerships** > Designed to respond quickly to the economic and climate interests of Europe and its partners, Clean Trade and Investment Partnerships are flexible arrangements that eschew the slowness and complexity of traditional free trade agreements. In particular, they provide for the mobilisation of public and private funding for concrete projects and the creation of a framework conducive to investment in clean technologies and green raw materials. More broadly, European and African experts have insisted that this new type of partnership should not be negotiated solely with countries rich in mineral resources for the sole purpose of securing European access to critical materials. Rather, they recommended starting with the industrialisation needs foreseen by African countries and negotiating green partnerships that allow investment flows to serve the sustainable development trajectory that these countries have defined for themselves. This would be a pre-condition to building an alliance between Europe and the African continent which, without excluding others, would be politically strong and would secure economic relations between Europe and the rapidly growing African markets, evolving beyond raw material supply. The EU currently appears too divided and too focused on its own reindustrialisation to be able to think strategically about an industrial investment policy –within both the EU and partner countries – that would guarantee its economic and political stability and that of globalised value chains. If a new political impetus could spur the EU to initiate this level of engagement between domestic and foreign policy, it could create the strategic alliances without which it risks being crushed by the major economic powers. By ushering in a new era of trade and investment partnerships with countries in the Global South, be it in Africa, Latin America or Asia, the EU would also pave the way for new rules governing value chains at a time when these are evolving very rapidly. Because its energy security depends on the decarbonisation of its economy and because China has an interest in selling its decarbonised technologies, these new partnerships could form the basis for an accelerated reduction in greenhouse gas emissions. **References:** * Banerjee, A., Barchiche, D., Bilal, S., Kauffmann, C., and _al_. 2024. ‘Building a Shared Agenda on Green Industrialisation for Africa and Europe’, IDDRI Policy Brief, * Berghmans, N. and _al_. 2025 (forthcoming). ‘New Industrial Policies since COVID-19. Lessons for the EU’, IDDRI Study, * Draghi, M. 2025. _The Future of European Competitiveness_, Luxembourg: Publications Office of the European Union. [commission.europa.eu/topics/eu-competitiveness/draghi-report\_en#paragraph\_47059,](https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en#paragraph_47059) * Gunfaus, M. T., Deprez, A., Kauffmann, C. and _al_. 2025. ‘Paris+10 Diagnosis. Looking back to Look Forward’, IDDRI Working Paper No. 01/25, * Lazard, O. 2023. _How the EU Can Use Mineral Supply Chains to Redesign Collective Security_, Washington DC: Carnegie Endowment for Peace, * Treyer S. 2025. ‘Qui joue encore selon les règles?’, IDDRI Blog, 9 January 2025, * United Nations. 2025. _Seizing the Moment of Opportunity. Supercharging the New Energy Era of Renewables, Efficiency, and Electrification_, New York: United Nations. **_This article was originally published in Conférence issue No. 4, titled "Facing the Environmental Challenge", a publication that sheds light on major contemporary issues and informs public and private decision makers._** ### Thématique `#Environnement` **Langue :** `#Anglais` --- ### Navigation pour IA - [Index de tous les contenus](https://conference.sciencespo.fr/llms.txt) - [Plan du site (Sitemap)](https://conference.sciencespo.fr/sitemap.xml) - [Retour à l'accueil](https://conference.sciencespo.fr/)