Azernews.Az

Ulviyya Poladova

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Azerbaijan-China energy cooperation is entering a more mature and strategically significant phase, shaped by a mix of political trust and economic pragmatism. What once rested mainly on broad diplomatic goodwill and trade has increasingly evolved into a focused partnership in which energy sits at the center. That partnership now has two interconnected pillars consisting of traditional hydrocarbons and green energy. Together, they reflect countries' current priorities.

The overall trajectory of Azerbaijan-China relations has clearly been upward. Energy cooperation stands on a solid foundation because it offers immediate commercial value while also serving long-term national goals. For Azerbaijan, it means using energy diplomacy to build a future-oriented model of development. For China, cooperation with Azerbaijan offers access to a geographically important partner located on the route connecting East and West, with growing relevance for transport, logistics, and now sustainable energy connectivity.

At the heart of this relationship is a dual-track model of energy cooperation. On one track lies traditional cooperation in hydrocarbons, an area where Azerbaijan has long-established expertise and institutional capacity. On the other lies green energy, where Chinese companies bring scale, technology, equipment, and financing capacity. This combination gives the bilateral relationship a practical balance. Azerbaijan does not need to abandon its existing strengths in oil and gas to pursue climate goals. Instead, it can leverage hydrocarbon revenues, infrastructure, and partnerships to support a gradual but meaningful energy transition. China, meanwhile, does not approach Azerbaijan solely as a buyer or supplier, but increasingly as a partner in industrial and infrastructure development.

A visible example of the continuing relevance of traditional energy cooperation is the engagement between the State Oil Company of Azerbaijan, SOCAR, and China National Chemical Engineering Co., Ltd. This interaction matters because it shows that the hydrocarbon dimension of bilateral ties remains active even as the green agenda expands.

Recent political contacts have also underlined this shift. On August 10, Azerbaijan's Minister of Energy Parviz Shahbazov noted after a meeting with China's ambassador to Azerbaijan, Lu Mei, that the two sides discussed energy cooperation and exchanged views on the participation of Chinese companies in both domestic and international initiatives, including green energy projects.

In this context, cooperation with China offers Azerbaijan a practical pathway to scale up renewable capacity more quickly than it could through domestic resources alone.

Bilateral agreements under COP29, the Belt and Road Initiative, and the Shanghai Cooperation Organization also provided the broader framework for this cooperation. These mechanisms enable Azerbaijan to attract Chinese investment and technical know-how while aligning with global sustainability goals. Through joint initiatives in renewable power generation, technology transfer, localized equipment production, and sustainable infrastructure, both countries are positioning themselves as contributors to a more resilient, diversified, and climate-friendly regional energy landscape.

Beyond the bilateral dimension, this partnership carries wider regional implications. It strengthens Europe’s access to alternative green energy sources, supports energy diversification in the Caspian region, and demonstrates how cross-border cooperation can accelerate the global clean energy transition.

It should be noted that Azerbaijan-China energy cooperation has moved beyond the traditional energy sector and entered a new phase. This corresponds with Azerbaijan’s climate targets for 2030 and 2050, as well as China’s strategy of promoting the global export of green technologies.

Projects such as the Khizi-Absheron Wind Power Plant and the Gobustan Solar Power Plant demonstrate that Chinese companies are playing a role as technology and financial partners in Azerbaijan’s renewable energy development.

Another important area of cooperation is the localization of industrial production and green energy technologies. In this regard, the Alat Free Economic Zone is emerging as a new platform for industrial partnership between the two countries. Sunsync, the first Chinese company officially registered in the zone, is preparing to establish a solar panel manufacturing facility there.

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.

In 2018, Azerbaijan became a signatory to the Belt and Road Energy Partnership Declaration when Minister of Energy Parviz Shahbazov attended the Belt and Road Energy Ministerial Conference in China.

The One Belt, One Road initiative was put forward by Chinese President Xi Jinping. Azerbaijan expressed its support for the initiative when it signed the Memorandum of Understanding on Joint Encouragement of the Establishment of the Silk Way Economic Belt during President Ilham Aliyev’s state visit to China in 2015.

That framework matters because Azerbaijan occupies a strategically valuable position on the Middle Corridor linking China and Europe through the Caspian region. Initially, Belt and Road engagement centered mainly on transport and trade infrastructure - railways, ports, and logistics routes. But as the initiative has expanded, energy has become a more prominent component, especially where it intersects with sustainable development.

At the same time, the deepening energy relationship between Azerbaijan and China should be assessed objectively, with attention to both its opportunities and limitations. Strategic partnerships are strongest when they are built on realistic assessments of mutual interest. Hydrocarbons remain important, but green energy is rapidly becoming a second strategic pillar.

If current trends continue, energy will not simply remain a sector of cooperation between Azerbaijan and China. It will become one of the central mechanisms through which their wider strategic relationship is defined.