EU-China Climate Governance: Between Competition and Cooperation
- EG Editorial Board
- Mar 28
- 8 min read
Considering that climate change is a paramount threat to humanity, the need for global climate governance is more topical than ever before. Recent geopolitical shifts, such as the U.S.’s announced withdrawal from the Paris Agreement under the new Trump Administration, along with rising concerns about economic competitiveness in key industries and national security, have shaped discourse on global environmental leadership. The European Union (EU) and the People's Republic of China are emerging as key players in addressing climate change. Their relationship is multifaceted, raising the question of whether climate issues can create a platform for cooperation or generate competition (Keßler, 2024).
Distinct but Interdependent Agendas
The EU-China relationship is complex. As stated in the European Commission's 2019 Joint Communication and reaffirmed in 2023 the European Union characterises its relationship with China through a multifaceted framework. For example, it views China as a partner for cooperation in the fields of Trade, Investment, Research and Innovation and, simultaneously, as an economic competitor and systemic rival to the world order (European Commission's 2019 Joint Communication, p. 1). This underscores the intricate intersection of economic and political interests between the two actors. Regarding climate issues, it is evident that the EU and China pursue distinct agendas, each with its own set of priorities. The EU has set ambitious time-sensitive climate targets, aiming for carbon neutrality by 2050 (European Commission Climate Strategies & Targets website). In contrast China follows a more gradual approach, leading the green investment sector globally while consistently investing on coal mining, planning to peak its emissions by 2030 and reaching neutrality by 2060 (China’s Policies and Action for Addressing Climate Change, 2022).
A key factor driving this divergence is their reliance on fossil fuels. While the EU has significantly reduced its reliance on coal, accelerating the transition toward renewables, China continues to depend on it as a critical component of its energy security (Climate Action Tracker, 2024). This reliance necessitates a more cautious and phased transition to cleaner energy sources. Another fundamental difference lies in their regulatory frameworks. The EU adopts a normative approach, establishing binding environmental standards and market-based mechanisms such as the Emission Trading System (ETS) (Gislén, Van Enk, 2024). In contrast, China employs a more pragmatic and adaptive strategy, balancing economic growth, industrial competitiveness, and social stability with its climate commitments (Lee, 2024). While both actors share the overarching goal of decarbonization, their strategies diverge due to distinct national priorities. Economic development, industrial policies, and, above all, energy security shape their respective pathways toward sustainability, underscoring the complex interplay between climate ambition and geopolitical realities.
This divergence is influenced by a multitude of factors, including national security, energy security, economic interests, but also political alignments such as supply chain vulnerabilities, energy dependence, high national consumption levels, and China’s self-identification as a developing country. Consequently, environmental cooperation cannot be considered in isolation from the broader geopolitical context. Moreover, leaders in both Beijing and Brussels have explicitly framed climate policies as part of a broader vision to enhance global trust and expand global influence. Environmental commitment is an effective foreign policy instrument aimed at consolidating influence in international climate governance (Kaneti, 2021). EU-China relations in green governance are shaped by a complex synergy of economic competition and geopolitical strategy, driving both actors to adopt distinct but interdependent approaches. Their interdependence stems from several factors. The EU relies on China for critical raw materials essential to its green transition, making supply chains a key element of their relationship.
At the same time, climate change is a transnational threat that neither actor can address alone, requiring some level of cooperation despite broader strategic tensions. Environmental policies also play a growing role in diplomacy, influencing bilateral relations and shaping broader geopolitical dynamics. Furthermore, the green commercial standards set by both sides have direct implications for trade, as environmental regulations can impact exports and market access, reinforcing the need for alignment or negotiation.
At the heart of this dynamic is the race for leadership of the green transition, a status which carries both economic and political weight. As global powers, the EU’s and China’s dominance in green industry, particularly in capital-intensive sectors such as renewable energy, battery storage, and electric vehicles, translates into strategic influence. Dominance in key sectors like these ensures control over critical supply chains (such as rare earth elements) and the ability to establish global standards for their trade. It also enables the formation of asymmetrical partnerships, reinforcing geopolitical influence and expanding soft power by shaping international economic agreement (Xinhua, 2024). The dynamic between climate action and geopolitics is complex, with each influencing the other in significant ways (China-EU Cooperation on Environment and Climate Process and Prospects, 2024).
Rivalry and Cooperation: A Multifaceted Relationship
China has today emerged as the leading global supplier of green technologies, a position largely secured by state-driven industrial policies, large-scale subsidies, and strategic investments in key sectors, controlling over 80% of global photovoltaic manufacturing and 60% of lithium-ion battery production (IEA, 2023). Given the ambitious agendas the European Union pursues in terms of decarbonization and clean transition (European Commission Climate Strategies & Targets website), such as the Green Deal, a comprehensive strategy to make Europe climate-neutral by 2050; the Emissions Trading System (ETS), which sets a carbon pricing mechanism for industries; the Fit for 55 package, aiming to cut emissions by 55% by 2030; REPowerEU, designed to reduce energy dependence and boost renewables; and the Critical Raw Materials Act, which seeks to secure essential resources, concerns have risen over supply chain overreliance, and scarcity of diversification, as China affirms itself as the prime commercial partner for the EU (OEC, 2024), causing a structural trade deficit on the balance of payments, indicating that the EU consistently imports more from China than it exports, leading to potential economic and financial imbalances (Trading Economics, 2024). In response, the so-called ‘de-risking rather than de-coupling’ strategy (maintaining economic ties while reducing dependencies and economic vulnerabilities) is often discussed among European policymakers, seeking to balance engagement with the Asian country while protecting domestic markets.
However, economic competitiveness frequently obstructs deeper political dialogues, reinforcing skepticism and protectionist impulses that risk leading to fragmentation on global climate action. The challenge for the EU lies in navigating its relations with China strategically—deepening bilateral commercial flows, as commerce is the key to cooperation, while simultaneously fostering and protecting the growth of its own green industrial specialised sectors.
Beyond economics, green governance is also a geopolitical tool. It enhances global influence, economic leverage, and international credibility, and both China and the EU see it as a key pillar of their strategic positioning. Despite the undeniable undercurrents of competition and economic statecraft, climate change remains a shared existential challenge—one that cannot be effectively addressed without cooperation and a multilateral approach. While economic and political frictions persist, the EU and China should identify pragmatic pathways for collaboration, starting from areas of mutual interest and stable engagement (China-EU Cooperation on Environment and Climate Process and Prospects, 2024). Bridging this gap between rivalry and cooperation will be essential for shaping a sustainable, resilient, and geopolitically balanced global green transition. Building on these dynamics, recent developments have further highlighted the strategic reciprocity between the European Union and China in green governance, offering debating subjects. Speeches by European Commission President Ursula von der Leyen and Chinese Vice Premier Ding Xuexiang at the 2024 World Economic Forum held in Davos—the annual summit on economy, geopolitics, sustainability and innovation—underscored the critical importance of sustainable development in their respective agendas, suggesting their willingness to cooperate and open their respective markets.
Despite advocating for a stronger, more self-reliant Europe to drive its green transition and safeguard its industries from the so-called “second China shock” (Von der Leyen, 2025). Von der Leyen also emphasised the importance of maintaining constructive dialogue and engagement with the Asian country. She balanced concerns over economic over-reliance with a call for fair trade, stating, "Europe must protect its industries while fostering global cooperation to combat climate change effectively" (Von der Leyen, 2025). Similarly, Ding Xuexiang reiterated China’s openness to collaboration, asserting that "global challenges require global solutions, and China is committed to working with international partners to achieve sustainable development." (Ding, 2025). Both leaders acknowledged the necessity of joint efforts in addressing climate change. Von der Leyen called for "enhanced EU-China dialogue to align our environmental and trade policies" (Von der Leyen, 2025) while Ding highlighted "the need to resist protectionist tendencies and work towards shared climate goals" (Ding, 2025). Their statements suggest potential areas for cooperation, such as shared research initiatives, carbon market linkages, and joint investments in green infrastructure.
This analysis of their speeches reveals the dual nature of EU-China relations: while competition remains a driving force, avenues for pragmatic cooperation exist. Going forward, maintaining open channels for dialogue and fostering structured engagement will be crucial in ensuring that competition does not hinder the broader goal of global climate action. The Davos discussions serve as a reminder that, despite tensions, a balanced approach that embraces both strategic autonomy and collaborative diplomacy will be essential in shaping the future of global green governance (Xinhua, 2024).
This article does not necessarily reflect the opinions of European Guanxi, its leadership, members, partners, or stakeholders, nor of those of its editors or staff. They have been formulated by the author in their full capacity, and shall not be used for any other purposes other than those they are intended for. European Guanxi assumes no liability or responsibility deriving from the improper use of the contents of this report. Any false facts, errors, and controversial opinions contained in the articles are proper and exclusive of the authors. European Guanxi or its staff and collaborators cannot be held responsible or legally liable for the use of any and all information contained in this document.
ABOUT THE AUTHOR
Marco Montigiani holds a Master’s Degree in International Relations, China & Global Studies, from the University of Turin and a Bachelor’s Degree in Foreign Languages for Intercultural and Business Communication from the University of Siena. He has a strong academic and professional focus on China, having studied abroad at Wenzhou University and completed an internship at the Italian Embassy in Beijing, where he contributed to economic and political research, speech writing, and event organization. He is highly interested in international relations, market research, and China’s role in global affairs, and is eager to apply his expertise in these fields.
This article was edited by Marina Ferrero and Stefano Bertoli.
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