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The European Union and United States have both witnessed revivals of industrial policy focused on clean technology supply chains in the past couple of years. This has been driven primarily by the Inflation Reduction Act in the US (Houser et al, 2023) and, in response, by the Net Zero Industry Act in the EU. In the context of these laws, Bruegel and the Rhodium Group have developed monitoring tools for Europe and the US respectively to respond to an increasing need for transparent and independent data on clean-tech manufacturing and deployment. Bruegel’s European Clean Tech Tracker provides an overview of the main clean-tech manufacturing and deployment trends in Europe (Keliauskaite et al, 2024), while the Rhodium Group Clean Investment Monitor, a joint project with MIT’s Center for Energy and Environmental Policy Research (Rhodium Group and MIT CEEPR, 2024), tracks quarterly investment (public and private) in clean-tech manufacturing and deployment in the US. 

Using data from these two trackers, the Bruegel and Rhodium Group Transatlantic Clean Investment Monitor will provide a granular comparison of clean-tech deployment and manufacturing trends on both sides of the Atlantic.

We look at deployment and manufacturing capacity in four key clean technologies: wind, solar, battery electric vehicles and electrolytic hydrogen. On deployment, Europe leads on wind, solar and battery electric vehicle adoption, though the US gained ground on Europe in 2023 in electric vehicle registrations, mainly because of the increasing popularity of plug-in hybrid vehicles in the US and their declining sales in Europe. Europe also overtook the US in 2023 in electrolyser deployment for the production of green hydrogen. On manufacturing, there has been significant on-the-ground growth over the past three years, with Europe leading in wind, electrolyser and inverter manufacturing, and the US leading in solar cell, solar module and battery cell manufacturing.

The battle over each new manufacturing facility and the associated jobs and economic development they bring is only just heating up, as US and European governments try to strike a balance between encouraging domestic growth, accelerating the clean energy transition and maintaining energy and supply chain security. Climate leadership requires domestic political realities, legal constraints and international diplomatic ties to be navigated. In our next briefings, we will explore how policy differences and economic realities are translating into project announcements and actual groundbreakings, and what this foretells about the pace of the transition in these two major economies.

Solar and wind power

The EU leads the US in the overall deployment of both solar PV and wind capacity. By the end of 2023, 257 gigawatts (GW) of solar PV and 208 GW of wind were connected to grids in the EU, including both utility-scale and distributed generation. This compares to 136 GW of solar PV and 154 GW of wind in the US (Figure 1). The deployment gap is largest for solar PV, of which the EU has deployed nearly twice that of the US. Electricity demand is higher in the US (4,350 terawatt hours (TWh) in 2023) than the EU (2,700 TWh) so this deployment difference is even starker when considered relative to demand.  

While wind historically has made up a larger share of total capacity compared with solar across both regions, the recent expansion of solar PV capacity has been substantially faster than for wind. From 2021 to 2023, the EU built out 92 GW of solar, increasing capacity by 56 percent. For the US, 45 GW of solar was deployed increasing overall capacity by 50 percent. Wind capacity in the EU grew by 28 GW in the last two years, a 15 percent increase. This compares to a 18 GW expansion in the US, a 13 percent increase.  

Solar panel manufacturing involves multiple components and value chain stages. For much of the solar market, the starting point is production of polysilicon. Both the US and EU have substantial capacities for polysilicon manufacturing, although this capacity is also used for the manufacture of semiconductors. In the US, polysilicon production for solar has dropped nearly to zero since 2015 (IEA, 2022a) as prices have dropped and China has become the dominant producer. However, some US facilities have begun transitioning back from chip manufacturing or expanding production for solar.

Following polysilicon production, the next stages involve energy-intensive processes to transform polysilicon into intermediate products of ingots and wafers, and ultimately solar PV cells. Neither the US nor the EU have substantial capacities for ingots or wafers; China is dominant globally in these stages (McWilliams et al, 2024). 

Module assembly is the final stage in the manufacture of a solar PV module and is more job-intensive than prior stages. Here, the US and EU have more noteworthy capacities with 19 GW and 15 GW, respectively. For both, this amounts to more than one-third of deployed solar PV in 2023. The EU is a large manufacturer of inverters that convert electricity between different types of currents, a necessary component for connecting solar panels to the wider electricity grid. Like polysilicon, inverters are not used exclusively for solar panels, but also for other technologies. 

When it comes to wind, Europe has a long history of expertise in the manufacture of turbines and complementary components. This is reflected in current manufacturing capacity data (Figure 3). For blades, Europe has the capacity to manufacture the equivalent of 25 GW per annum and 28 GW for nacelles (a nacelle is the important section of a wind installation which contains the gearbox and generator and converts the turning of blades via gears and the generator into electricity). The US has lower capacities in both stages. 

Electric vehicles and batteries

The deployment of electric vehicles (EVs, referring here to passenger cars) has accelerated significantly in both the US and Europe in the past five years, showing progress towards decarbonisation of transportation, the biggest source of emissions in each region. While registrations hovered at around 0.35 million cars in both regions in 2018-2019, the acceleration has been more rapid in Europe. EU EV registrations reached 2.36 million cars in 2023 (Figure 4a). In comparison, EV registrations topped 1.43 million in the US in 2023, a 52 percent year-on-year increase. 

In both the EU and US, buyers have favoured pure battery-electric vehicles (BEV) over plug-in-hybrid electric vehicles (PHEV), though PHEV registrations have begun picking up in the US in recent quarters. Over the past two years, the share of PHEVs in total vehicle sale  in the EU peaked and then declined to just under 8 percent, whereas the BEV share rose from 9 percent to 15 percent between 2021 and 2023 (Figure 4b). Over the same period in the US, the BEV share rose from 3 percent in 2021 to 7 percent in 2023, while the PHEV share grew more slowly, reaching just under 2 percent of sales in 2023.

As the market share of EVs rises around the world, the demand for batteries to equip those vehicles is also increasing rapidly. Recent tariffs imposed by the US and EU on imports of EVs from China have focused more attention to domestic EV and battery manufacturing capacity. A comparison of battery-cell manufacturing in both regions (Figure 5) shows that while EU capacity was 2.3 times larger than US capacity in 2021, at 137 GWh, investments in new capacity since then have reversed the picture. By 2023, the US battery cell manufacturing capacity had grown three-fold to reach 188 GWh. While nine facilities were operational in the US in 2021, this number increased to 27 in 2023 according to the Clean Investment Monitor. Meanwhile, EU battery cell manufacturing capacity increased by just 16 percent to 158 GWh.

Electrolytic (green) hydrogen

Hydrogen is an important chemical and energy vector for existing industrial processes. Much of it is currently derived from natural gas which causes high carbon emissions (McWilliams and Zachmann, 2021). When these carbon emissions are captured and sequestrated, the term ‘blue hydrogen’ is used to indicate the substantially lower carbon footprint compared to unabated ‘grey hydrogen’. Hydrogen can also be produced through electrolysis, in which an electrical current splits water into hydrogen and oxygen, with no associated carbon emissions. When the electricity used is generated from renewable sources, the resulting product is referred to as ‘green hydrogen’, which is our focus here.

Europe overtook the US last year in terms of electrolyser deployment, with 384 MW of installed capacity, compared to 269 MW (Figure 6). Notably, Europe saw a 300 percent rise in capacity from 2021 to 2023, whereas US capacity rose by 33 percent over the same period. However, electrolytic hydrogen still makes up only 0.2 percent of hydrogen production capacity in the EU (Bolard et al, 2023). Electrolyser deployment significantly lags the political targets Europe has set for itself: reaching its renewable hydrogen target of 10 million metric tons produced in the EU by 2030 is estimated to require between 65,000 MW and 80,000 MW of capacity deployed ¹ See European Commission ‘Hydrogen’, undated, . . In comparison, in the National Clean Hydrogen Strategy and Roadmap, the US also sets out a 10 million metric tons (non-binding) ² See US Department of Energy press release of 5 June 2023, ‘Biden-Harris Administration Releases First-Ever National Clean Hydrogen Strategy and Roadmap to Build a Clean Energy Future, Accelerate American Manufacturing Boom’, .  objective for clean hydrogen by 2030, which includes both green and blue hydrogen. 

References

Bolard, J., F. Dolci, U. Eynard, K. Gryc, A. Georgakaki, E. Ince, A. Kuokkanen, S. Letout, A. Mountraki and D. Shtjefni (2023) Clean Energy Technology Observatory: Water Electrolysis and Hydrogen in the European Union - 2023 Status Report on Technology Development, Trends, Value Chains and Markets, Publications Office of the European Union, Luxembourg, available at 

Houser, T., B. King, J. Larsen, K. Larsen and M. Tamba (2023) ‘Relay Race, not Arms Race: Clean Energy Manufacturing Implications of the IRA for the US and EU’, Note, 28 February, Rhodium Group, available at 

IEA (2022a) Special Report on Solar PV Global Supply Chains, International Energy Agency, available at 

IEA (2022b) Global Hydrogen Review 2022, International Energy Agency, available at 

Keliauskaite, U., B. McWilliams, S. Tagliapietra and C. Trasi (2024) ‘European Clean Tech Tracker’, Bruegel Datasets, first published 28 March 2024, available at /dataset/european-clean-tech-tracker

McWilliams, B., S. Tagliapietra and C. Trasi (2024) ‘Smarter European Union industrial policy for solar panels’, Policy Brief 02/2024, Bruegel, available at /policy-brief/smarter-european-union-industrial-policy-solar-panels

McWilliams, B. and G. Zachmann (2021) ‘Navigating through hydrogen’, Policy Contribution 08/2021, Bruegel, available at /policy-brief/navigating-through-hydrogen

Rhodium Group and MIT CEEPR (2024) ‘Clean Investment Monitor’, available at