Could China step in after US cuts funding for energy transitions overseas?

Chinese international cooperation mechanisms such as the Belt and Road Initiative could fill the gaps left by US withdrawal, writes Zhou Xiaozhu, an analyst with the Rock Institute for Global Decarbonization Progress, working on climate change and energy transition issues

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ON the day he became president again, Donald Trump signed an executive order to take the US out of the Paris Agreement on climate change.

That was followed by a termination of US funding pledged during the Biden administration to programmes that support South Africa, Indonesia and Vietnam to shift their economies away from coal dependence.

The move brings uncertainty to the renewables transition in those countries. The US had committed $4 billion, according to funding documents for the programmes, which are known as Just Energy Transition Partnerships (JETP).

This accounted for 12 per cent of South Africa's initial JETP funding, 18 per cent of Indonesia’s and 13 per cent of Vietnam's - more than any other state funder.

The loss has already caused the cancellation of projects and exacerbated funding gaps.

It is worth noting, however, that the three countries are all key partners in China's Belt and Road Initiative, and so have plenty of experience in working with China on infrastructure and energy.

China's expertise in energy planning, market investment and clean-energy technology could help them redraw their plans and roadmaps for the energy transition and economic development, and in doing so deepen China’s cooperation with Africa and the Southeast Asian nations.

THE IMPACTS OF THE US WITHDRAWAL

In March, South Africa's government announced the cancellation of US-funded projects that were in the planning or implementation stages.

It also said that, along with its partners, it would “evaluate the implications” of the US withdrawal.

Shortly afterwards, the other main JETP funders - the UK, Germany, France, the EU, Denmark and the Netherlands - which together are known as the International Partners Group, issued their own statement.