The European Union and China strengthen their energy cooperation

China, European union, energy security, energy cooperation Last February, the 14th EU-China summit took place in Beijing. Among other topics discussed that day, a partnership on sustainable urban planning and energy cooperation was mentioned. A number of partnerships already exist in these fields, but the visit to Brussels of the Chinese Deputy Prime Minister on May 3rd seems to have initiated the creation of a genuine forum for political dialogue, which will serve to overcome future obstacles or potential political tensions, especially over energy security. But what do the last joint declarations actually entail?

Energy: an increasingly significant issue in UE-China relations

China and the EU « met » diplomatically for the first time in 1975 and signed their first trade agreement ten years later. Both parties consider that the growing volume of mutual trade makes it necessary for them to get along. However, inter-state relations prevail over EU-China relations as far as energy is concerned. However, while maintaining special relationships to Member States, China has also deepened its energy cooperation with the EU since the 2000’, especially with a view to confronting mid-term environmental challenges.

Key developments of this relationship include the 2005 Joint Statement on Climate Change, aiming, among other things, at promoting low-carbon technology transfers. During the 2006 G8 summit, Chinese President Hu Jintao called for cooperation benefitting all parties so as to strengthen collaboration between energy producers and energy users based on equality, reciprocity and mutual benefit. The same year, the EU Commission issued a Communication to the Council and the European Parliament, demonstrating a closer partnership with China and increased cooperation on energy efficiency issues.

A new agreement laying the groundwork for advanced cooperation in different energy fields

The last EU-China meeting is a milestone insofar as it is the first one to be exclusively devoted to energy and urban planning issues. Both sides committed themselves to work on four main areas:

  • reform the energy market and price regulation
  • implementing technical standards allowing long-lasting integration of renewable energies into pre-existing grids
  • enhanced cooperation on energy efficiency
  • facilitate access to the electricity market for Chinese and European companies

As far as energy security is concerned, UE and China admit that they must cooperate further to produce clean and renewable energy in order to protect themselves against the risk of shortage of hydrocarbon fuels. Energy efficiency is also at the core of concerns over urban planning. Both parties asserted their willingness to cooperate in order to develop optimized urban energy-flow management schemes (“smart neighbourhoods”), smart buildings and clean transportation, among others.

What to expect from such ambitious agreements

In order for China to implement the changes such statements are calling for, it will inevitably have to quickly upgrade its out-of-date and polluting energy production infrastructure. As for the EU, it strives to take advantage of its technical edge on renewable energy and smart grids. Provided that China respects the reciprocity clause included in the statements made on May 3rd, 2012, the EU should not lose out, thanks to potential Chinese investments in the European energy sector. Indeed, European companies and heavily indebted European countries were slowed down by the crisis and cannot undertake such investments alone.

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