For years, European policymakers have framed the clean energy transition as both an environmental imperative and an economic opportunity. Yet new data suggests that the continent is losing ground in the race to build the factories and fuel supply chains of the future.
According to research from the Mission Possible Partnership (MPP), a non-profit focused on decarbonising heavy industry, China and a growing number of developing countries are now securing more financing for clean industrial projects than the European Union and the United States combined. The implications extend far beyond emissions: they could determine where jobs are created, which regions control critical supply chains, and ultimately, who holds leverage in the global order.
China's clean industry dominance
Over the past year, a record 36 major clean industrial projects worldwide reached final investment decisions, according to MPP. China accounted for 23 of those, with a combined value exceeding €40 billion. The country now hosts 49 per cent of all clean industrial plants operating or under construction globally.
MPP attributes China's rapid expansion to years of consistent policy support, a mature renewable energy grid, and growing domestic demand for alternative fuels. China currently produces more than 90 per cent of the world's lower-emissions methanol, a fuel derived from biomass or renewable hydrogen rather than fossil fuels. It also holds over 40 per cent of global capacity for cleaner aluminium production, which relies on low-carbon electricity.
Beijing's influence is increasingly visible beyond its borders. In August 2025, Southeast Asia's largest wind farm began operating in Laos. The Monsoon Wind project, owned by a Thai-led consortium, uses 133 Chinese-built turbines to supply electricity to Vietnam's manufacturing sector. As more countries seek to reduce fossil fuel imports, China is becoming a key supplier of clean technology, notes Belinda Schäpe of the Centre for Research on Energy and Clean Air (CREA). “This creates significant economic opportunities for China and could strengthen its geopolitical influence, particularly in emerging economies,” she says.
The rise of the 'industrial sunbelt'
China is not alone in challenging Western leadership. Across Africa, Asia, and Latin America, countries rich in renewable resources are attracting investment in what MPP calls the 'industrial sunbelt'. In the last year, six projects in emerging economies secured €4.7 billion in financing—more than the €4.3 billion raised in developed economies.
Kenya, for instance, is developing Africa's first geothermal-powered green fertiliser plant in the Rift Valley, aiming to produce up to 300,000 tonnes annually, mostly for domestic farmers. Paraguay has also secured financing for a cleaner fertiliser facility. In South Africa, investors have backed the world's second commercial project producing synthetic sustainable aviation fuel (SAF) from captured carbon dioxide and renewable electricity. Another 281 projects are in development across emerging economies, MPP adds.
“This year, the new industrial sunbelt outpaced Europe for the first time, turning clean industrial plans into financed plants,” says Faustine Delasalle, CEO of MPP. “From geothermal-powered fertiliser in Kenya to sustainable aviation fuels in Brazil, renewables-rich countries are converting their natural endowments into factories, jobs and revenue.”
Can Europe catch up?
The EU is trying to respond. In February 2025, the bloc launched its Clean Industrial Deal, pledging to mobilise more than €100 billion to support European clean manufacturing, lower energy costs, and help industries such as steel and chemicals cut emissions. Lawmakers are now debating the Industrial Accelerator Act, which would speed up approvals for new factories and boost demand for European-made low-carbon products.
European policy has already stimulated investment in SAF, which accounted for one in three clean industrial investments worldwide last year. Since 2025, fuel suppliers at EU airports must provide at least two per cent SAF in their aviation fuel.
Schäpe points out that Europe retains significant strengths. The continent can already manufacture roughly twice as many electric vehicles and wind turbines as it needs annually, and nearly three times as many heat pumps, according to a recent Ember report. While China exports more EVs overall, the combined value of exports from other countries—especially Germany—has grown faster than China's, CREA research shows.
Yet the financing gap remains a major obstacle. MPP is tracking more than 800 proposed clean industrial projects representing about €4.3 trillion in potential investment that have yet to secure funding, often due to unclear policies or a lack of long-term purchase commitments.
“The challenge now is scale and pace,” Delasalle says. “We have seen a record number of final investment decisions in the last 12 months, but we need to move from tens to hundreds of financed plants each year.”
For Europe, the window to shape the clean industrial era is narrowing. The continent's ability to compete will depend not only on its own investments but also on forging partnerships with the emerging economies now driving global growth. As China's clean tech exports continue to expand, the EU's response will be closely watched—both in Brussels and in the capitals of the industrial sunbelt.
