News & insights
Date: March 2023 | Client: Hinrich Foundation | Sector: Energy | Expertise: Decarbonisation & sector integration
Net Zero’s trade imperative: A case study on the global demand for solar technology
To reach the International Energy Agency's (IEA's) target of Net Zero by 2050, the rate of installation of solar generation facilities will need to increase from the 2021 volume of 150 GW to nearly 900 GW annually by 2030. We were commissioned by the Hinrich Foundation to undertake a deep dive on the Hinrich-IMD Sustainable Trade Index (STI) 2022, using the IEA's top-down projections and World Bank data to assess the solar capacity of 30 economies featured in our index.
As the results show, most economies would require an exponential growth in their solar capacity. So far, only a handful of economies are currently active in every segment of the solar industry, with China now commanding 83% of the world's supply of polysilicon, essential to the manufacturing of solar panels. Shifting of production to other economies with lower energy intensity, such as Vietnam, Thailand, and Malaysia, could strengthen supply chain resilience and reduce carbon emissions.
Our report examines the solar supply chain, evaluates the prospect for diversification, and assesses the potential impact of carbon border adjustment mechanisms on the sector.
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