Understanding Why Energy Transition Paths Differ Greatly Among Four Major Economies

The world is at a critical historical turning point, where climate change and environmental degradation pose existential threats to human society. Under the Paris Agreement framework, countries have proposed ambitious net-zero emission commitments aimed at limiting global temperature rise to within 1.5 degrees Celsius. This shared goal is driving fundamental changes in global energy structures, prompting countries to accelerate their transition from traditional fossil fuels to low-carbon or carbon-free energy.

However, this transition is not a single pathway. Due to differences in resource endowments, economic development stages, geopolitical environments, and socio-cultural backgrounds, the energy transition paths chosen by different countries show remarkable diversity. This report aims to provide an in-depth and objective cross-country comparative analysis, focusing on four major global economies: the United States, China, Japan, and the European Union. Through analysis of these countries and regions' green energy definitions, policy frameworks, current development status, and core strategies, we reveal the challenges faced in energy transition and the unique strategies adopted.

What Are the Main Regulations and Policy Tools Driving Renewable Energy in the US?

Green Energy Definition and Perspectives

In the United States, there are nuanced distinctions in energy policy language. According to the latest definition from the US Department of Energy (DOE), "Clean Energy" encompasses a broad range, including not only renewable energy sources such as hydropower, wind, solar, and geothermal, but also "nuclear energy" which is not classified as renewable. This inclusive definition differs from "Green Energy" and "Renewable Energy." "Green Energy" typically refers to energy that is environmentally friendly and non-polluting, while "Renewable Energy" emphasizes its natural replenishment characteristics. The US federal government tends to use the term "Clean Energy," and this linguistic choice itself embodies deep strategic considerations.

Including nuclear energy in the "Clean Energy" category reveals a pragmatic strategy in America's energy transition. Nuclear energy can provide stable, low-carbon baseload power, effectively compensating for the inherent intermittency issues of renewable energy sources like wind and solar. Relying solely on renewable energy poses significant challenges to grid reliability. Therefore, by broadening the definition to include nuclear energy within policy support, the US can not only effectively reduce carbon emissions but also ensure the reliability and security of national energy supply. This is a key decision that balances environmental ideals with economic realities.

Current Status and Trends

US clean electricity development shows significant federal and state-level differences. As of 2024, the national average clean electricity supply ratio is approximately 43%, reaching a historical high. However, this national figure masks highly uneven development across states. For example, Vermont, with its abundant hydropower resources, has green energy ratios approaching 100%, while Washington State and South Dakota also lead due to hydropower or wind resources. Meanwhile, Puerto Rico, West Virginia, and Kentucky still have green energy ratios below 20%, with West Virginia deriving 88% of its electricity from coal.

This significant state-level disparity is not merely a result of uneven resource distribution; it also reflects deeper structural challenges. States with long-term dependence on fossil fuels face substantial economic and social resistance to transition, and legacy energy infrastructure creates lock-in effects. This indicates that US energy transition is not driven by federal policy alone, but is a complex outcome of federal and state government policy interactions and collaborations.

In terms of specific renewable energy composition, wind energy has been the largest source of renewable electricity in the US since 2019. In 2022, wind energy generation reached 434 TWh, accounting for 10% of national electricity generation and 48% of renewable energy generation. Additionally, solar energy development has grown increasingly robust, with solar power generation doubling in recent years in sunny western regions like Utah.

Regulatory Framework and Policy Measures

The US renewable energy policy framework is primarily driven by state governments and can be divided into two main types: "Renewable Portfolio Standards (RPS)" and "Clean Energy Standards (CES)." The core mechanism of these policies is the "Renewable Energy Certificate (REC)" system, a market-based "certificate-electricity separation" tool that requires electric utilities to sell a specific percentage of renewable energy electricity, proving compliance through REC purchases. Each REC represents 1000 kWh of renewable energy generation's environmental benefits.

The federal government accelerates the transition through large-scale funding support. For example, the Inflation Reduction Act of 2022 provides nearly $400 billion in direct grants and tax credits for clean energy development. Furthermore, the IRA provides the largest clean energy tax credits and financing tools in history, with Title 17 serving as the current key loan guarantee platform to provide financing guarantees. This model combining government guarantees with private capital effectively reduces risks for renewable energy projects with long payback periods and large investments, thereby accelerating commercial technology deployment. The US green electricity development model is achieved through this dual drive of market mechanisms and government intervention.

The Role of Nuclear and Natural Gas

Nuclear energy and natural gas play key roles in America's energy transition strategy. Although nuclear energy is not considered renewable, its carbon-free characteristics place it within the clean energy category. Data shows that executive orders in the US have aimed to significantly expand nuclear power generation capacity to 400 GW through simplified permitting processes, achieving energy self-sufficiency and strategic goals. Additionally, the State Department's "FIRST" program actively promotes Small Modular Reactor (SMR) technology internationally to ensure US leadership in the global nuclear energy sector.

Natural gas is viewed as an important "transition energy." Compared to coal, natural gas has lower carbon emissions and can serve as a stable power supply bridge while renewable energy has not yet become fully widespread and grid instability issues remain unresolved. Following the success of the shale gas revolution, the US has become the world's largest LNG exporter. This transformation in energy status has evolved natural gas's role from an initial domestic transitional fuel to an important global geopolitical strategic asset. The US leverages its massive LNG export capacity to assist other countries in developing LNG projects through international financing, consolidating relationships with strategic partners while also opening global markets for US energy companies. This demonstrates that US energy policy is deeply intertwined with national security and international influence.

China's Large-Scale Green Energy Deployment Under Policy Leadership

Green Energy Definition and Perspectives

China's definitions of "green energy," "clean energy," and "renewable energy" are relatively unified, with the three terms typically considered synonymous, generally referring to energy types that have minimal environmental impact and low pollution emissions during production. The main categories include non-fossil energy sources such as solar, wind, hydro, biomass, and geothermal. This conceptual integration aligns with China's state-led policy system. Compared to the US's diverse definitions, China's unified definition facilitates clear policy communication and top-down execution, ensuring all relevant departments and industries move toward a single, clear goal.

The Chinese government has elevated clean energy development to a national strategic priority, viewing it as an important pathway for addressing global climate change and achieving sustainable development. This policy orientation is the core driver of its ultra-large-scale green energy deployment.

Current Status and Trends

China's green energy development scale has reached a globally leading position. As of the end of 2022, China's clean energy installed capacity reached approximately 1,400 GW, accounting for more than 45% of the national total installed capacity. Particularly in wind and solar power, China has become one of the world's largest power generation markets.

The source structure of new power generation also shows that China's energy transition has entered a substantial substitution phase. In recent years, nearly 60% of China's new power generation has come from non-fossil energy sources, making non-fossil energy the main body of new power supply. This means green energy is no longer merely a supplement to energy supply but is structurally replacing traditional energy. Additionally, China actively promotes clean and electrified end-use energy, with electricity currently accounting for about 30% of end-use energy, significantly higher than the world average, demonstrating the comprehensiveness of its energy transition pathway.

Regulatory Framework and Policy Measures

China's green electricity regulatory framework reflects its state-led planned economic model, forming a sharp contrast with the US's market-based certificate trading model. The Renewable Energy Law of the People's Republic of China, implemented in 2006, established five core systems:

Total Volume Target System: The state formulates total volume targets for renewable energy development.
Mandatory Grid Connection System: The law requires grid companies to purchase all grid-connected electricity from renewable energy power generation enterprises at state-published prices.
Classified Pricing System: Electricity prices are set according to different energy categories.
Cost Sharing System: If renewable energy grid-connected prices exceed average conventional energy prices, the difference is shared by end users across the national grid.
Special Fund System: Establishment of special funds for renewable energy development.

The advantage of this model is its ability to effectively overcome market failures and rapidly achieve large-scale energy deployment through mandatory policies. Additionally, the National Energy Administration issues and promotes Green Electricity Certificate trading as another market-based tool to support renewable energy development.

The Role of Nuclear and Natural Gas

In China's energy transition pathway, nuclear energy is viewed as a stable baseload power alternative and is experiencing ultra-large-scale construction. As of March 2024, China's nuclear power units under construction rank first in the world in installed capacity. Reports predict that by 2030, China's operational nuclear power installed capacity will rank first in the world, with nuclear power playing a key role as an important substitute for high-carbon energy and a main supporter of system safety and stability in the new power system.

Natural gas is incorporated into a highly regulated tiered utilization framework. China's Natural Gas Utilization Policy classifies natural gas utilization into priority, permitted, restricted, and prohibited categories. Priority categories mainly cover civilian gas use, peak-shaving power plants, and distributed energy where its efficient and clean characteristics can be fully utilized, while prohibited categories include building baseload gas power projects in high-pollution areas. This ultra-large-scale construction of nuclear energy and strict tiered management of natural gas utilization together embody the comprehensive control of China's energy transition pathway. The core logic is to ensure energy security and controllability while achieving carbon reduction goals.