By Valerie Volcovici

WASHINGTON Emerging U.S. businesses in the energy transition supply chain such as hydrogen and wind power should act fast to avoid being dominated by China, a senior State Department official said on Tuesday.

Geoffrey Pyatt, assistant secretary for energy resources at the State Department, said the U.S. needs to ensure that China does not dominate wind power, small nuclear power and hydrogen, an emerging fuel that could help mitigate carbon emissions from hard-to-abate industries like cement and aluminum smelting.

China has enjoyed "essentially a monopoly" on solar wafers and solar cells that has prevented robust domestic solar manufacturing, he said.

Pyatt said he has been engaging with industry in Australia, the EU, and Japan to ensure the energy transition in Europe does not simply swap a dependence on Russia for China.

"We need to make sure we don't replace European dependence on Russia for gas with a collective dependence on Chinese clean tech and critical minerals," Pyatt, a former ambassador to Ukraine, told a conference on natural gas in Washington. "We shouldn't give in to fatalism. We shouldn't assume this race is lost."

Pyatt said he was made hopeful about the U.S. energy transition by a recent visit to a battery manufacturer in San Jose, California that he said was thinking of an entire "de-risk from China" supply chain. "I think you're going to see a lot more of that as these technologies continue to roll out."

President Joe Biden last year signed into law a bill with hundreds of billions of dollars in clean energy incentives, yet some industries are taking years to develop, such as new nuclear power. Also, new legislation is needed to maximize transmission of electricity from large solar and wind power projects to cities.

Minerals needed for many components of renewable energy present another hurdle for the U.S. supply chain, which depends on China and African countries for mining many of these materials.

(Reporting by Valerie Volcovici, writing by Timothy Gardner; Editing by David Gregorio)