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Nazrin Abdul

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In recent years, Azerbaijan–China relations have demonstrated a clear upward trajectory, marked by intensified high-level political dialogue, expanding economic ties, and deepening cooperation across strategic sectors. Against the backdrop of shifting global power balances, supply chain restructuring, and the global energy transition, Baku’s engagement with Beijing reflects a calculated and forward-looking foreign policy choice-one that seeks to balance traditional energy strength with future-oriented sustainability.

At the heart of this relationship lies energy cooperation, encompassing both hydrocarbons and green energy. This dual-track approach allows Azerbaijan to consolidate its role as a reliable energy supplier while simultaneously positioning itself as a regional hub for renewable energy development - an area where China has emerged as a global leader.

Hydrocarbons: Industrial synergy and global ambitions

A clear illustration of the growing depth of traditional energy cooperation is the recent engagement between the State Oil Company of Azerbaijan (SOCAR) and China National Chemical Engineering Co., Ltd. (CNCEC). Speaking at a January 13 meeting at CNCEC headquarters with Kenan Mirzayev, General Director of Petkim and Head of SOCAR Türkiye’s Oil Refining and Petrochemicals Business Unit, CNCEC Chairman Mo Dinghe emphasized the importance of long-term strategic cooperation in the energy and chemical sectors.

CNCEC, a global leader in chemical engineering with extensive international experience in engineering, industrial investment, and advanced technologies, expressed readiness to further deepen cooperation with SOCAR, including joint access to international markets. This signals a shift from project-based engagement toward more integrated industrial collaboration.

SOCAR’s strong global position in oil, gas, and petrochemicals - particularly through assets such as STAR Refinery and Petkim in Türkiye - complements China’s engineering expertise and capital capacity. For Azerbaijan, such cooperation enhances value-added production, supports downstream development, and strengthens its presence in global energy and petrochemical value chains. For China, Azerbaijan offers a politically stable, strategically located partner bridging Europe, Central Asia, and the Middle East.

This partnership reflects a broader trend: China is no longer merely a consumer of hydrocarbons but an active participant in refining, petrochemicals, and energy infrastructure development areas where Azerbaijan seeks technological modernization and market expansion.

Green energy: From strategy to implementation

Alongside hydrocarbons, green energy has rapidly emerged as a second strategic pillar of Azerbaijan–China relations. Chinese investment activity in Azerbaijan has intensified in renewable energy, aligning closely with Azerbaijan’s long-term development strategy and its commitment to energy transition and emissions reduction.

Chinese companies are actively involved in solar and wind power projects, power generation infrastructure, and the production of electric buses. This cooperation not only supports Azerbaijan’s climate goals but also contributes to economic diversification beyond oil and gas. Importantly, it positions Azerbaijan as an emerging green energy hub in the South Caucasus and Caspian region.

According to official forecasts, renewable energy’s share in electricity generation is expected to rise to 25 percent by 2027 and 30 percent by 2030. The first phase of this strategy aims to commission around 2 GW of renewable capacity by the end of 2027, primarily to meet domestic demand. The second phase, envisaging an additional 6 GW, shifts the focus toward electricity exports and supplying energy-intensive infrastructure such as data centers - highlighting the economic logic underpinning Azerbaijan’s green transition.

This approach also enables more efficient use of natural gas resources, freeing volumes for export and reinforcing Azerbaijan’s role as a key energy supplier to regional and European markets.

Strategic context: EVs, Europe, and China’s global vision

The growing relevance of renewable energy cooperation must also be viewed within a broader geopolitical and economic context. The recent agreement between China and the European Union on electric vehicles - averting a potential trade war and replacing punitive tariffs with minimum price mechanisms - underscores a critical shift in global competition.

By prioritizing quality, technology, and innovation over price, Chinese companies such as BYD, SAIC, and Geely are reinforcing their leadership in batteries, range, and comfort. This evolution strengthens the case for clean energy ecosystems, where electricity generation, EV manufacturing, and smart infrastructure converge.

For Azerbaijan, this global shift creates new opportunities. As renewable energy moves from concept to large-scale application, Azerbaijan’s cooperation with China in green power generation and infrastructure becomes economically and strategically significant - not merely symbolic.

The institutional framework for this expanding partnership was further strengthened during Baku Energy Week, where an Agreement on Comprehensive Strategic Partnership in the Energy Sector was signed between Azerbaijan’s Ministry of Energy and China Energy Engineering Corporation Limited.

The agreement formalizes understandings reached during President Ilham Aliyev’s state visit to China and covers cooperation on key projects, including the 160 MW Fuzuli Solar Power Plant, a 200 MW offshore wind project in the Caspian Sea, hydropower initiatives, and the “Green Energy Corridor.” Beyond infrastructure, the agreement also provides for cooperation in energy planning, grid research, the establishment of a green energy research center, and training of qualified personnel.

This reflects a mature stage of cooperation - one that goes beyond construction to include knowledge transfer, institutional capacity-building, and long-term planning. Taken together, Azerbaijan-China energy cooperation represents a pragmatic blend of continuity and transformation. Hydrocarbons remain the backbone of the partnership, providing industrial depth and export strength, while green energy is rapidly becoming a driver of future growth and strategic relevance.

For Azerbaijan, China is not just an investor, but a long-term partner in industrial modernization and energy transition. For China, Azerbaijan offers stability, strategic geography, and a gateway to regional and European markets. In an era of global uncertainty, this energy-centered partnership stands out as a model of mutually reinforcing interests - anchored in today’s realities, yet firmly oriented toward tomorrow’s energy landscape.