The Climate Council’s latest report, ‘Power Shift: The US, China and the Race to Net Zero’, reveals a complex landscape of renewable energy adoption, despite federal policy setbacks in the US. While the Trump administration has retreated from federal climate action, states and companies are forging ahead, with California and Texas emerging as leaders in clean energy. California, powered by two-thirds clean energy, continues to champion climate action, while Texas has become the top wind power producer in the US. Moreover, 84% of US companies remain committed to their climate goals, with 37% even increasing their ambitions.
The report highlights that the US federal policy retreat has created a vacuum, allowing other nations, particularly China, to reinforce their positions as clean energy leaders. For Australia, this shift presents a significant opportunity. A stronger 2035 climate target could unlock an A$190bn ($124.1bn) export opportunity, stimulate local business investment, and create jobs. This target could also aid Australia’s transition from a fossil fuel-dependent economy to a leader in clean exports, especially as China, its second-largest coal export market, moves towards renewables.
China’s clean energy sector has seen remarkable growth, with solar and wind capacities surging since 2020. The country’s renewable energy sector has grown so robustly that it reached its 2030 targets six years ahead of schedule. Climate Councillor and economist Nicki Hutley notes, “In 2025, global renewables investment is double that of fossil fuels, with countries investing trillions of dollars. Yet the US, under Trump, has made the dumbfounding choice to head in the opposite direction.” She adds, “Even though many heavyweight states and companies in the US are still forging ahead with renewable energy projects, it’s clear China is now leading—and profiting. Over the past five years, China’s solar capacity has almost quadrupled and its wind capacity has doubled.”
Global investment in renewable energy is projected to reach A$3.4tn by 2025, double the investment in coal, oil, and gas. Renewable power generation is on track to surpass coal-fired generation by 2025 or 2026, and by 2030, it is expected to nearly double, satisfying the combined power demands of China and the US. This shift comes as numerous countries commit to phasing out fossil fuels and ending subsidies for coal, oil, and gas. Although China continues to build coal power stations, coal generation dropped by 3.4% year-on-year in the first half of 2025, the report stated.
This news could significantly shape the development of the energy sector. The US federal policy setbacks may drive more states and companies to take the lead in renewable energy adoption, accelerating the transition to clean energy. Meanwhile, China’s leadership in clean energy presents both opportunities and challenges for other nations, particularly in terms of export markets and technological advancements. For Australia, a stronger climate target could unlock significant economic opportunities and drive the transition to a clean energy economy. The global shift towards renewables also underscores the need for continued investment and innovation in clean energy technologies.