Play the Renewable Energy Transition With KGRN | ETF Trends

Political tensions continue to run high between the U.S. and China, but within the clean energy transition, China remains a major hub and supplier of renewable energy technologies. Manufacturing within the renewables sector in China is set to continue strong growth in 2022 as China continues to be the largest global supplier of solar panels and related technologies, and the primary producer of lithium-ion batteries, according to a report from Wood Mackenzie, a global research and consultancy group.

Manufacturing is so strong right now that China’s production of solar-related offerings is growing at a rate faster than the global demand, which could help to drive prices down after China’s economic boom previously helped drive renewable prices higher worldwide. Battery manufacturing is expected to grow 150%, while wind turbine component manufacturing is anticipated to grow 42%.

“This production of epic proportions is enough to meet what China needs to accelerate decarbonization while supporting the ambitions of much of the rest of the world,” Alex Whitworth, Wood Mackenzie research director said, as reported by

China’s wind turbine industry hasn’t established the level of global dominance that its solar or lithium-battery production have (70% of global supply, and 90% of global manufacturing supply, respectively), but China still manufactures roughly half of the world’s wind turbines.

Many countries have built their 2030 emissions goals around the potential for job creation in the renewables transition.

“Achieving this without greater dependence on China looks harder than ever as its manufacturers expand capacity and drive down costs,” Whitworth explained. “And with China’s power demand now cooling on the back of more manageable economic growth, local manufacturers are looking to further extend global reach.”

Investing in China’s Renewable Energy Dominance With KGRN

China is currently the world leader in total renewable energy capacity, holding 31% of global capacity, and the KraneShares MSCI China Clean Technology Index ETF (KGRN) capitalizes on investing in clean technology in China’s growing economy.

KGRN tracks the MSCI China IMI Environment 10/40 Index and is based on five clean technology themes: alternative energy, energy efficiency, green building, sustainable water, and pollution prevention.

It allows investors direct exposure to ESG market movers in China such as Li Auto Inc. at 10.18%, Xpeng Inc. at 8.84%, and BYD Co. at 7.67%.

The ETF has an expense ratio of 0.78% and nearly $170 million in assets under management.

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