China on track to produce more solar panels than the US in 2023: China has tripled its solar panel production capacity between January and April on the back of government subsidies to boost the energy transition and lower solar panel production costs, Bloomberg writes. The country may install some 154 GW of solar energy in 2023 and is expected to overtake the US in terms of PV production capacity this year. The China Photovoltaic Industry Association said it expects the country to add between 95-120 GW this year, up from last year’s record of 87.4 GW in total added solar power capacity. Next year could see the country up the capacity by a further to some 300 GW. The US, through its Inflation Reduction Act, is earmarking USD 369 bn in tax credits to bolster the transition to renewables and source critical minerals for EV production .

A subsidy race between the US, China and the EU can benefit everyone: While subsidies are only second best to carbon taxes — with some of the challenges of subsidizing green tech including increasing government spending and inefficient resource allocation — a renewable subsidy race between the world’s three biggest blocks can help create economies of scale and lower the costs of nascent technologies. Adjustments to the green subsidy policies and protectionist measures put up by the big three blocks can help to ensure a more level playing field, especially for the Global South. Decarbonization efforts being conducted between the Global North and the Global South, as well as “friendshoring,” could help technology transfer to create more opportunities for smaller economies.

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Volvo signs agreement to buy renewable energy from Swedish wind farm: Swedish automaker Volvo has signed a 10-year power purchase agreement with Swedish renewables producer Vattenfall AB to buy 50% of the energy generated from the Bruzaholm wind park from 4Q 2025, Bloomberg reports. The wind park — which will break ground this summer — will supply Volvo with 225 GWh per year once operational. While the EU has set rules to cut emissions from vehicles, no such rules have been set for slashing emissions from the production of EVs. Despite this, Volvo aims to reach net zero greenhouse gas emissions in its value chain by 2040.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

• The EU and South Korea have launched a Green Partnership to boost cooperation on climate change and green transition. (Statement)