China
2024.06.16 17:10 GMT+8

NextEra CEO says Biden's China tariffs will hinder green transition

Updated 2024.06.16 17:10 GMT+8
CGTN

Wind turbines work at sunset on a wind farm near Del Rio, Texas, the U.S., February 15, 2023. /AP

The largest U.S. renewable energy company, NextEra Energy Resources, has cautioned President Joe Biden against imposing additional tariffs on Chinese clean energy technologies, arguing that such measures could impede the progress of the green transition.

These tariffs would drive up consumer costs and make it harder to achieve clean energy goals, said Rebecca Kujawa, CEO of NextEra, to the Financial Times. "Any uncertainties in the development process can definitely create higher costs for customers and make it more difficult to get some of the clean energy goals that the Biden administration has over the finish line," she said.

Industry experts and insiders share Kujawa's concerns, warning that new tariffs on Chinese clean energy products, including solar panels and batteries, could hinder the U.S. from meeting its 2035 decarbonization targets. They argue that the tariffs will raise the prices of renewable energy technologies, slowing the pace of decarbonization and increasing the overall cost of the green transition.

Jim Murphy, CEO of Invenergy, asked, "We don't have domestic manufacturing here, so why should we be tariffing imports?" He emphasized that the tariffs would make solar technology less financially attractive for customers due to uncertain costs.

Industry division

The proposed tariffs have caused a rift within the industry. While large domestic manufacturers see them as necessary to compete with inexpensive Asian imports, operators fear they will raise the costs of renewable energy due to limited domestic supply. Herbert Crowther, an analyst at Eurasia Group, noted that tariffs would cause "slower, short-term deployment” until a domestic industry is established.

"There is a natural tension between China policy and climate policy at this point in the U.S.," he said. "In the U.S. political context, ultimately, China policy sells much more than climate policy."

Last month, the Biden administration introduced a round of tariffs on Chinese clean technologies following concerns that cheap imports were undercutting domestic manufacturers from the Inflation Reduction Act. On June 7, the U.S. International Trade Commission agreed to continue investigating a petition from solar manufacturers, including First Solar and Qcells, seeking anti-dumping duties on Chinese solar cell producers in Southeast Asia.

David Fickling, a Bloomberg columnist, argues that the U.S. still does not have enough solar capacity to meet its decarbonization goals by 2035. He pointed out that the world is falling short of the necessary tripling of renewable power by 2030, as targeted by the G20.

He noted that increasing tariffs on Chinese imports could exacerbate this shortfall, making it harder to build the required number of solar and wind farms and the factories needed for their components. He warns that such measures will increase costs and slow down the transition to clean energy.

A man installs a solar panel on the roof of a home in Frankfort, Kentucky, the U.S., July 17, 2023. /AP

Callings for reevaluation

A broad coalition of U.S. industry groups has appealed to the Biden administration to reconsider the tariffs. The "Americans For Free Trade" coalition, which includes manufacturers, retailers, technology firms, and other sectors, has requested a 30-day extension for public comments and a public hearing. They argue that the tariffs, set to begin on August 1, would disrupt the cost structure and supply chain of U.S. industries.

The tariffs highlight the challenge the Biden administration faces in greening the world's largest economy while developing a domestic supply chain for clean technologies, largely produced in China. The administration aims to achieve 80 percent renewable energy by 2030 and 100 percent by 2035, up from just over 20 percent last year.

Kujawa also urged lawmakers to avoid politicizing clean energy, emphasizing its economic benefits. She pointed out that renewable energy has driven economic growth in local communities and warned that politicization could undermine these gains.

As the U.S. contends with rising power demands from AI data centers and manufacturing, the stakes remain high. The American Clean Power Association reported a 28 percent increase in new solar, wind and battery systems, totaling 5.6 gigawatts in the first quarter of 2024. With the Biden administration's decarbonization goals hanging in the balance, the debate over tariffs on Chinese clean energy technologies continues to intensify.

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