Great Power Rivalry, Geoeconomic Competition and the Transition to a Net-Zero Energy System

The transition to climate-friendly energy supply is highly contested and increasingly influenced by a rapidly changing geopolitical order. This paper provides an overview of how this energy transition is influencing the distribution of power between major powers, and, conversely, how major powers are seeking to shape the speed and direction of this transition. It takes an analytical perspective that distinguishes broader geopolitical interests from the geoeconomic competition within emerging clean energy supply chains.

It begins by reviewing the relative asset base of China, the US and Europe within the existing fossil-dominated energy system and a potential future one, dominated by renewable energy and characterized by increasing levels of electrification. It then goes on to review the role of new energy supply chains in enabling the economic rise of China and how it is affecting the geoeconomics positions of the US and the EU. It then moves on to the role of these major powers in actively seeking to shape the energy transition. Building on Quitzow and Zabanova (2025), it presents and applies a conceptual framework for analyzing the main channels of influence and how they are being deployed by the three major powers to influence the speed and direction of the energy transition. It discusses how the increasing geopolitical confrontation between the US and China is leading to the development of novel strategies, alliances and institutions. Finally, it also briefly discusses implications and strategic choices of fossil-fuel exporting countries and selected emerging economies.

Reference: Quitzow, R., & Zabanova, Y. (2025). Geoeconomics of the transition to net-zero energy and industrial systems: A framework for analysis. Renewable and sustainable energy reviews, 214: 115492. doi:10.1016/j.rser.2025.115492.