Net zero Europe is deindustrialising while China burns coal

Telegraph

08-05-2025

At the Munich Leaders' Meeting in Washington DC this week, vice-president JD Vance put his finger on a major cause of Europe's recent decline. 'One of the things that the Germans were very good about,' he declared, 'is that they had kept the industrial strength of their economy consistent with the first world standard of living. But now what we see in Europe is a lot of our European friends are de-industrialising.' Hard power, he continued, requires strong industry.
Europe's present state is hardly surprising. Its industrial base is getting whittled away by net zero policies, with the goal of reducing greenhouse gas emissions to preserve the environment placed ahead of almost everything else, including economic growth. Worse, China is ramping up coal-fired power at the same time. The net effect is not likely to be net zero but economic suicide for the West.
Europeans need a strong economy not only to sustain their standards of living – those long summer and Christmas holidays, early retirements, and visits to bars and cafes – but also for a strong defence, as demonstrated by the war in Ukraine.
Yet the EU is aiming to reduce greenhouse gas emissions to net zero by 2050, making the continent so-called climate neutral. The aim is to tighten the rules progressively. By 2030, the plan is for net CO2 emissions to be 55 per cent lower than 1990 levels, and 90 per cent lower by 2040.
Clean air and water are of course worthy goals. But according to the Heritage Institute's Climate Calculator, based on government economic and climate models, reducing Europe's entire CO2 emissions to zero would have a net temperature mitigation of only about 0.12 degrees Celsius by 2100, assuming the highest climate sensitivity to carbon.
The argument that any level of government intervention is justified to 'save the planet' is therefore seriously flawed. Especially since making all those solar panels and batteries – net zero technologies that Europe requires – currently drives up the use of fossil fuels. China manufactures 80 per cent of global solar panels, for example, with production mostly powered by fossil fuels, according to the International Energy Agency (IEA).
Despite promises in the Paris Agreement to curb CO2 emissions, Beijing continues to rely heavily on coal as a primary energy source. The country's coal consumption and coal-powered generation have seen significant growth, with China consuming almost 5 billion tons of coal in 2023, representing 56 per cent of global coal consumption.
Chinese President Xi Jinping pledged in 2021 to 'strictly control coal power projects', but in 2024 China is estimated to have begun construction on 94.5 GW of new coal capacity, the highest since 2015. Although electricity generation from wind and solar sources is increasing, coal-powered generation rose from under 1,000 TWh in 2000 to 5,864 TWh in 2024, highlighting the ongoing expansion of coal power in China.
Due to higher prices for electricity in the West, energy-intensive manufacturing has been shipped to countries like China, which do not so slavishly follow net zero nostrums. Europe's progressive policies are effectively contributing to China's industrial might.
This makes a mockery of the West's goal to reduce dependence on fossil fuels, and its costly international pledges and agreements aimed at reducing carbon footprints. While the West pushes forward with renewable energy and de-industrialisation, China's coal consumption and power expansion undermine the global effort. The dichotomy between these two approaches underscores the futility of net zero policies in Europe.
They are also preventing growth in Africa and Latin America. Europeans have pressured international organisations not to lend for fossil fuel projects in emerging economies, where hundreds of millions of people lack electricity, sanitation, or running water. Although the number of members declined after President Donald Trump took office, banks in the Net Zero Banking Alliance are also expected to abide by a UN-requested pledge not to lend for fossil fuel projects.
With America putting new offshore wind on hold, and with lower US demand for Chinese wind turbines and solar panels, there is a real danger that inefficient renewables will be dumped in Africa and Latin America, with these countries forced to take out expensive loans to pay for them. Instead, American companies should be assisting emerging economies to produce baseload power, selling them modern power plants to take advantage of their rich natural resources of coal, oil, and gas.
As well as moving away from net zero, President Trump and vice-president Vance can encourage others to do the same. For while America may be championing sensible energy policies, Europe's unwavering commitment to extreme environmentalism is likely to continue to lead to slower economic growth and declining hard power.
With America's new energy dominance, Europeans cannot ignore China's burning coal fires, which mock the EU's senseless deindustrialisation.