The EU has rebuffed the European solar industry’s request for emergency measures to combat a surge in cheap imports from China. Any use of trade weapons must be “weighed against” the European Union’s climate goals, Mairead McGuinness, European Commissioner for Financial Services, said during a debate in the European Parliament, as an industry group warned solar-panel manufacturers would go bankrupt without urgent support. “The EU needs to have access to affordable solar panels to fuel the green transition and unlock the economic opportunities. 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,” McGuinness said.
Europe is trying to wean itself off dependence on China for solar panels while also boosting green-energy production. Currently, more than 97% of the solar panels deployed in Europe are imported, mostly from China, McGuinness said. 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. 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%” – was an “opportunity for citizens and solar panel installers”, but “clearly a challenge to EU solar panel 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 presented a list of actions the Commission had already taken and focused on future legislation that could help support the industry. These include a forced-labor ban, which could target panels made or containing parts made in Xinjiang, where the EU accuses China of operating a system of forced labor, which the Chinese government denies.
The Net-Zero Industry Act – being discussed by the European and national parliaments – would mandate that around one-third of solar panels used in the EU are made there, and penalize firms from countries with monopolies on “specific net-zero technology” such as solar during EU procurement processes. However, Commissioner McGuinness warned that dependence on China could become more acute. “On the one hand, global solar-panel deployment is expected to further accelerate,” she said. “On the other hand, a 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 about unfair Chinese competition,” said German Representative Engin Eroglu, while Green Lawmaker Ciaran Cuffe cited the industry’s deep ties to Xinjiang, where the EU claims Uyghur people are persecuted, an allegation China denies.
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% of revenue and hold 14% 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 defense measures did not bring back the reshoring of solar manufacturing and coincided with deep declines in solar deployment,” said Hemetsberger, as reported by the South China Morning Post.