EU Not Thinking About Trade Measures For Solar Imports

• EU Energy Commissioner Kadri Simson has clarified the bloc does not plan to bring in trade tariffs on imported solar panels 
• The focus is on improving deployments with imported panels as the domestic manufacturing isn't enough 
• The bloc will support domestic solar producers with other policy ideas 
• The EU Council and Parliament have also reached an agreement over forced labor concerns 

The European Union (EU) Energy Commissioner Kadri Simson is batting to find a balance in keeping the bloc's solar PV deployments affordable to meet its climate targets, and supporting local manufacturers. This means the talk of trade tariffs is off the table, for now. 

In her speech at the press conference of the EU Energy Council recently, Simson said "There is a stark contrast between the positive rapid deployment of solar PVs in Europe and the very fragile situation of European manufacturers, squeezed by a surge in cheap imports from third countries." 

According to the Federal Ministry for Economic Affairs and Climate Action (BMWK), the bloc is expected to install 80 GW to 90 GW of solar PV capacity annually, up from the 56 GW in 2023. Yet its home-grown module production capacity stands at under 4 GW currently. Those of ingots/wafers and cells are much lower. Unless the manufacturing expands, this continues its dependence on imported products. 

A Reuters report quoted the Energy Commissioner as having said to reporters at the meeting of the EU Energy Ministers that 'clearly we cannot close our borders because we need solar panels.' 

Admitting to the EU solar PV manufacturers facing a challenging environment, making it difficult for them to compete with cheaper products in the market, Simson shared that she and the EU Industry Commissioner Thierry Breton have written to all EU energy ministers on the subject. 

The letter contains possible measures to further support solar manufacturing in the bloc, without compromising the deployment rate. The measures suggested may include focus on high quality products, with high environmental and labor standards, and increasing non-price criteria in renewable energy auctions, along with cybersecurity and data security. 

Simson said the suggested policy ideas have 'found support.' 

Speaking at the SolarPower Summit 2024 of SolarPower Europe (SPE), Simson stated, "We will ensure EU manufacturers grow steadily without affecting overall deployment. And we will continue to nurture the gigantic potential of solar to build a cleaner, greener, and more secure energy system," said Simson.  

The message that the market shouldn't expect any tariffs was clear post the energy ministers meeting in Brussels. In an official statement, the German State Secretary at the BMWK said, "Trade restrictions are not the way forward. This would make PV expansion more expensive and slower overall and endanger the energy transition. The federal government is proposing European resilience tenders that complement national tenders and strengthen Europe's solar industry." 

Notably, the EU has agreed to launch public procurement auctions to factor in sustainability and resilience under the Net-Zero Industry Act (NZIA). However, the question of resilience auctions at the national level has divided the German solar industry (see German Solar Manufacturing Industry Bracing For A Change?). 

Forced labor deal 

Meanwhile, the EU Council and Parliament have reached a provisional deal on prohibiting products made with forced labor from entering its borders or the export of any such products from the EU market. 

Following the US bringing in the Uyghur Forced Labor Prevention Act (UFLPA) to ban products made in Xinjiang including polysilicon for solar cells, the EU Parliament had proposed an import ban on all products produced by forced labor and on products produced by all Chinese companies listed as exploiting forced labor (see UFLPA Comes Into Force In The US). 

The commission will issue guidelines for economic operators and competent authorities, including best practices to comply with. While the commission will lead investigations outside the EU territory, the competent authority of the member states will lead when the risks are within respective bloc nations. 

The final decision to ban, withdraw and dispose of a product found to have been made with forced labor will be taken by the authority that led the investigation.  

"In cases of supply risks of critical products made with forced labour, the competent authority can decide not to impose their disposal, and instead order the economic operator to withhold the product until it can demonstrate that there is no more forced labor in its operations or respective supply chains," explains the council. 

Belgian Deputy Prime Minister and Minister for the Economy and Employment Pierre-Yves Dermagne said, "With this regulation we want to make sure that there is no place for their products on our single market, whether they are manufactured in Europe or abroad." 

Initially proposed by the European Commission in September 2022, the deal will still need to be endorsed and formally adopted by both the council and the parliament to become a law.