Europe remains heavily dependent on Chinese low-carbon technologies, with China supplying 98% of solar panels, 88% of lithium-ion batteries and 61% of inverters imported into the region in 2024.
Loom said policies aimed at “de-risking” have not led to a meaningful shift in clean-tech manufacturing geography at scale.
The non-profit organisation added that dependence on China presents serious industrial, technological and geopolitical risks despite differing from fossil fuel supply shocks.
The report said unchecked reliance could damage European economies, citing the decline of the region’s solar industry and warning automotive and wind manufacturing could follow.
Loom noted that growing dependence risks widening Europe’s trade deficit with China and increasing Chinese influence over prices and supply chains.
The organisation said Europe’s defence sector is also exposed, as rearmament depends on materials and technologies such as batteries and rare earth magnets dominated by China.
The report warned that Europe’s artificial intelligence ecosystem could become reliant on Chinese batteries, with potential export restrictions slowing development.
Loom said the US may pressure Europe to remove Chinese technology from energy systems or face tariffs, sanctions or wider security consequences.
The organisation argued that a lack of coordinated industrial strategy across Europe is compounding the risks.
The report added that without building domestic industrial capabilities, Europe may ultimately be forced to reduce its dependence on China on Washington’s terms.