This article is part of a Synergies series on climate and trade curated by TESS titled Addressing the Climate Crisis and Supporting Climate-Resilient Development: Where Can the Trading System Contribute? Any views and opinions expressed are those of the author(s) and do not necessarily reflect those of TESS or any of its partner organizations or funders.

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Every clean energy project—whether a solar farm, an offshore wind facility, or a battery storage hub—relies on global supply chains, cross-border investment, and trade in energy services. Yet, outdated trade rules, fragmented regulations, and uncoordinated carbon policies are slowing deployment and making clean technologies unnecessarily expensive for companies. For businesses committed to climate action, the gap between climate ambition and implementation often comes down to practical barriers in the trading system.

While global trade in goods is projected to reach an estimated $35 trillion by decade's end, much of this trade is not yet aligned with climate goals. For example, many emerging economies still face high import tariffs on solar panels, effectively slowing clean energy adoption. Or take the case of wind turbines. A single modern turbine contains components that cross borders multiple times—each crossing faces potential tariffs, import declaration fees, costly inspections, and other regulatory and fee hurdles. These frictions can significantly extend project timelines and create financing uncertainties that impact business planning and investment decisions. This challenge is particularly striking when compared to fossil fuel components, which are most often zero-rated in trade agreements—creating an uneven playing field that disadvantages clean energy technologies. In addition, experience shows that installation and maintenance of renewable energy projects typically create more domestic jobs than manufacturing, meaning that restrictive trade policies may ultimately hinder job growth rather than protect it.

And it’s not just trade in goods. Barriers to cross-border service provision remain significant in many markets. Service providers are crucial for the clean energy transition—from architects who design green buildings and lawyers who draw up infrastructure contracts for solar farms to engineers who oversee the installation of offshore wind turbines in the middle of the ocean. Yet restrictive licensing requirements, limits on foreign equity participation, and complex qualification recognition processes all impede the flow of expertise needed for clean energy projects. These barriers to services create a particularly pernicious form of climate inequality—where countries with the greatest renewable potential often have the least access to the specialized technical services required to harness it. These barriers hit small and medium-sized enterprises hardest, as they lack the resources to navigate complex regulatory environments across multiple jurisdictions.

One reason countries maintain high trade barriers for environmental technologies is their desire to develop domestic green industries. However, experience shows that installation and maintenance of renewable energy projects typically create more domestic jobs than manufacturing, meaning that restrictive trade policies may ultimately hinder job growth rather than protect it.

Some countries have made progress addressing these hurdles, offering valuable lessons on how smart policies can accelerate clean energy access. For example, Vietnam has removed import duties on clean energy components that cannot be produced locally, reducing costs for wind and solar projects. Its 2021 Law on Public-Private Partnership has strengthened its investment climate, helping Vietnam to become a regional wind energy leader.

However, many other countries still face crippling tariffs, restrictive regulations, and fragmented trade policies that slow the deployment of clean energy solutions. Addressing these challenges requires a coordinated global effort.

Based on extensive consultation with our global business network of over 45 million companies in over 170 countries, the International Chamber of Commerce (ICC) identifies three critical priorities for trade policy reform that can accelerate clean energy deployment:

1. Carbon Border Measures. Without coordination, carbon border measures risk creating new trade barriers that slow rather than accelerate the clean energy transition. As carbon border measures have global implications, global norms for their design and implementation must be established, ensuring that efforts to reduce greenhouse gas emissions do not inadvertently obstruct the global transition to sustainable energy solutions. As we highlight in our Global Principles for Effective Border Adjustments, such principles should be developed through an inclusive global engagement of trade and environment ministers at WTO and UNFCCC level—with a new international technical body eventually established to support ongoing policy oversight and coordination. Effectively achieving this will require real consultation with business and trading partners in the design and implementation phases.
2. Circular Economy. Fostering international cooperation on circular economy policies for renewable technologies can create sustainable supply chains that reduce costs while protecting natural resources. Currently, however, businesses eager to deploy cross-border circular solutions face significant hurdles. As highlighted in the ICC-EY report, Putting the circular economy into motion: From barriers to opportunities, creating a truly circular economy for clean energy requires action on multiple fronts: multilateral cooperation to align standards and regulations; harmonization of laws across jurisdictions to enable smoother flow of secondary materials; embedding technical expertise in policymaking to ensure, practical, implementable solutions; and updating international frameworks like the Basel Convention to better support circular material flows.
3. Environmental Goods and Services. Removing trade barriers on environmental goods and services must be a priority at the WTO but a fresh approach is needed. Eliminating tariffs on these goods and removing restrictions on clean energy services—such as engineering and grid management—would lower costs and accelerate deployment. But this is only one part of the equation. A comprehensive approach is needed that de-risks investment in clean energy projects and improves their economic viability, particularly in developing countries. To this end, trade and investment facilitation, government procurement, and financial mechanisms are critical components. Moreover, rather than considering each product or service in isolation, an ecosystem approach should be taken to ensure that the components, accessories, and supporting technologies needed to power environmental goods or provide services are also covered by these facilitating measures. To address this, the stalled WTO Environmental Goods Agreement negotiations must be revived but with a more holistic focus that expands beyond individual product lists to ensure more countries commit to eliminating all trade barriers for climate-friendly goods, including on environmental services, to promote the transfer of needed technologies. The plurilateral model exemplified by the Agreement on Climate Change, Trade and Sustainability (ACCTS) shows what is possible but needs broader adoption and, ambitiously, an expanded scope. Ultimately, a binding WTO agreement is required to maximize impact. For businesses, this would create the regulatory certainty needed to make long-term investments, expand into new markets, and scale clean energy solutions globally.

More broadly, addressing these trade barriers requires a revitalized multilateral trading system capable of integrating climate and trade policy effectively.

As the WTO struggles with paralyzed dispute settlement, a stifled negotiation function, and competing visions of economic security, these pressures have hindered progress on integrating trade and climate at the multilateral level. A comprehensive undertaking requiring consensus from all 166 members is difficult to achieve in today’s geopolitical and economic climate, which has left climate-trade policy caught in the same institutional impasse affecting broader WTO reform.

Despite these challenges, the member-led Trade and Environmental Sustainability Structured Discussions (TESSD) has made valuable contributions by fostering inclusive dialogue on key issues among diverse stakeholders. The TESSD's collaborative approach represents precisely the kind of inclusive framework that can help bridge differences and develop workable solutions.

Building on this foundation of dialogue, the next step is to advance towards concrete negotiations and outcomes. Clean energy trade reforms could present an ideal opportunity to revitalize negotiating prospects. Plurilateral negotiations on environmental goods and services could demonstrate how variable geometry approaches maintain multilateral principles while enabling progress. The thorny issue of subsidy reform—where current WTO rules inadequately address both fossil fuel subsidies and legitimate support for green transitions—represents another area where climate-trade cooperation could advance broader systemic solutions. By developing clearer criteria that differentiate between distortive subsidies and those supporting legitimate sustainability objectives, negotiators could establish templates for addressing subsidy disciplines beyond the climate sector.

Perhaps most significantly, clean energy cooperation could also offer a pathway to reconcile competing conceptions of economic security. While traditional security paradigms emphasize national self-sufficiency and technological protection, climate security requires collaborative approaches to technology diffusion and deployment. As energy security and climate resilience become increasingly interconnected, trade policies supporting clean energy access align national security interests with multilateral cooperation, potentially breaking the false dichotomy between openness and security that has undermined the WTO.

This approach could position clean energy not merely as a beneficiary of trade reform, but as a catalyst for broader systemic renewal. By addressing the practical challenges of trade in low-carbon goods and services, countries can rebuild trust in the WTO's ability to deliver meaningful outcomes on twenty-first century challenges while establishing governance models that could eventually extend to other contested areas of the trading system.

The intersection of trade policy and climate action represents the most underutilized lever for accelerating the clean energy transition. When trade ministers enter climate negotiations and climate ministers engage in trade fora, they unlock policy synergies that neither community can achieve in isolation. Ultimately, success on climate-trade cooperation depends on revitalizing the multilateral trading system itself. Businesses are already driving the clean energy transition through innovation—governments must remove trade barriers, create predictable rules, and scale public-private collaboration to accelerate progress.

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Valerie Picard is Head of Trade at the International Chamber of Commerce.

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Synergies by TESS is a blog dedicated to promoting inclusive policy dialogue at the intersection of trade, environment, and sustainable development, drawing on perspectives from a range of experts from around the globe. The editor is Fabrice Lehmann.

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