No urgent EU help for European solar industry to fight cheap China imports

“Given that we currently rely to a very important degree on imports to reach EU solar-deployment targets, any potential measure needs to be weighed against the objectives we have set ourselves when it comes to the energy transition,” the Irish official said.
Sheep graze next to solar panels at Germany’s largest solar park, Weesow-Willmersdorf, in the town of Werneuchen last September. Nearly all the solar panels deployed in Europe are imported, mostly from China. Photo: Reuters

Like other parts of the West, Europe is wrangling with the challenge of weaning itself off dependence on China for solar panels while also boosting green-energy production.

Currently, more than 97 per cent of the solar panels deployed in Europe are imported, mostly from China, McGuinness said.

Low-cost Chinese competition has led to cries for help from within the European solar industry.

Last Thursday, a group representing “nearly the entire European photovoltaic manufacturing industry” called for “emergency measures” to safeguard the EU supply chain amid “significant oversupply” from China.

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These included a buying up of European-made panels that are “languishing” in warehouses, more EU project funding, and emergency curbs on access to the EU market for Chinese imports.

McGuinness said the “surge in imports” – having driven solar prices down by “over 40 per cent” – was an “opportunity for citizens and solar panel installers”, but “clearly a challenge to EU solar panels producers”.

Yet no urgent support appears to be forthcoming. The use of trade measures should only be used “when that is in the overall union interest”, McGuinness said.

It is understood that some powerful member states, including Germany, are reluctant to open a new trade front with China.

Rather than emergency measures, McGuinness rhymed off a list of actions the commission had already taken and focused on future legislation that could help support the industry.

These include a forced-labour ban, which could target panels made or containing parts made in China’s Xinjiang Uygur autonomous region, where Beijing is accused of operating a system of forced labour. The ban could be complete this year.
The bloc’s Net-Zero Industry Act could be concluded by negotiators from the parliament and member states on Tuesday, McGuinness said.
This would mandate that around one-third of solar panels used in the bloc are made there, and penalise firms from countries with monopolies on “specific net-zero technology” such as solar during EU procurement processes.

But the finance chief warned that dependence on China could become more acute.

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“On the one hand, global solar-panel deployment is expected to further accelerate,” she said. “On the other hand, the deployment of massive expansion of production is also in the making, mainly in China. This situation might remain.”

Members of the European Parliament urged the commission to move more quickly to support the industry.

“I’m not that happy with your speech because I’m convinced that you know about a serious situation we’re facing … it’s about unfair Chinese competition,” said Engin Eroglu, a centrist member from Germany.

Green lawmaker Ciaran Cuffe cited the industry’s deep ties to Xinjiang, where “Uygur people are systemically persecuted”.

“We need to ensure that we’re not dependent on China and we need to make a choice. Will the solar revolution be red or fully green? That is the choice we need to make,” said the Irish member.

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Beijing has vehemently denied that any human rights abuses are taking place in Xinjiang.

Meanwhile, the European industry itself is divided on what measures should be taken.

One lobbying group, Solar Power Europe, where Chinese companies account for 12.6 per cent of revenue and hold 14 per cent of total voting rights, has called for financial support but no trade barriers.

Nonetheless, this group too was underwhelmed by McGuinness’ statement. Walburga Hemetsberger, Solar Power Europe’s CEO, said “manufacturers are going bankrupt”.

“More support, and better access to support, is critically needed,” she added, while praising the commission’s apparent opposition to trade measures.

“History has shown that trade defence measures did not bring back the reshoring of solar manufacturing and coincided with deep declines in solar deployment,” said Hemetsberger.

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