Green tech battle for market share is on - and who is winning?

We have heard a lot of talk in recent years about the green technology revolution and its role in framing the future of economies around the world. NY Times Tom Friedman outlined the importance of having a sound strategy in his book "Hot, Flat and Crowded". Special report published by the office of Senator Ron Wyden, D-Or, indicates that "U.S. EG exporters are losing overseas market share to foreign producers, especially to China."

 

According to the U.S. Department of Commerce,  the global market for environmental goods and services (EGS) grew by over 20 percent between 2002 and 2007 to $660 billion. The U.S. is the world‘s largest producer and consumer of EGS, generating $282 billion in revenues and $40 billion in exports. The report talks about the growing trade deficit in the US exports of green technologies comparing to imports. 

 

Trade barriers in the fastest growing markets and the fact that U.S. tariff rates on energy goods are much lower than those applied by the rest of the world are named as two key reasons for this disparity. 

 

Among the top global EG exporting countries, China has experienced the most dramatic growth, with exports rising by 490 percent between 2004 and 2008 to $27.4 billion. Germany is the largest exporter of environmental goods, with 16% of global EG exports in 2008, followed by China with 13%, Japan  with 9%, the United States with 9%, and Italy with 6%. 

 

U.S. exports have benefited from the major expansion in worldwide demand for clean tech products, growing by total of 70% between 2004 and 2008. However, the US is steadily losing the global market share as other nations move more aggressively to capture this fast growing market. Canada is the only trading partner with which US has trade surplus.

 

With a strong manufacturing base, large domestic market and growing demand around the world the US has an ample opportunity to cease this moment. Is there a role for US government to play? US Energy Secretary Steven Chu was testifying before the Senate Energy and Natural Resources Committee to answer this and other questions. 

 

The main subject of these hearings  was around investments in research and development and manufacturing capacity which are critical to ensure technological and manufacturing leadership. Growing demand for EG products in other countries like China often compels US companies to build facilities overseas. In the recent example US based Applied Materials, the world’s largest producer of solar manufacturing equipment, built its new state-of-the-art solar R&D facility in Xian, China.

 

The question is  - will the US take all the steps necessary to keep the leadership position. If it is up to senator Wyden, we should expect to see a real public debate on this issue coming soon.

Comments: 0; Published: January 27, 2010; Permalink

Tags: china,export,green technologies,trade,us companies