EU Solar Firms Face Collapse Amid Chinese Imports Surge

The EU solar industry is facing an existential threat from cheap Chinese imports, a trade group warned

by Victor Adetimilehin

Europe’s solar panel makers are on the brink of shutting down as they struggle to compete with cheap imports from China, a trade group warned on Tuesday.

The European Solar Manufacturing Council (ESMC) said in a letter to the European Commission that the bloc’s solar industry was facing an “existential threat” from a flood of Chinese products that have driven down prices and created a glut of solar panel parts in European warehouses.

The ESMC, which represents more than 40 companies and research institutes, urged the EU to take urgent action to support the local solar sector, which employs about 100,000 people and is key to achieving the bloc’s climate goals.

According to the letter, major EU PV module producers and their European suppliers will shut down manufacturing lines over the next 4–8 weeks unless substantial emergency measures are promptly implemented. The letter specifically refers to photovoltaic modules that convert sunlight into electricity.

The ESMC asked the EU to launch emergency measures including a scheme to buy up excess inventories of EU solar modules to ease the oversupply, and change state aid rules to boost government support for local solar producers.

The letter suggests that if rapid implementation of those measures is not possible, the EU should also explore ‘safeguard’ measures, which may involve tariffs and quotas, to address the surge of imports.

A Green Transition at Risk

The ESMC’s plea comes as Europe is rapidly expanding its solar capacity, installing a record 56 gigawatts (GW) of new solar power last year, according to industry data.

The EU views solar energy as a crucial element of its plan to reduce greenhouse gas emissions by 55% by 2030 and achieve climate neutrality by 2050.

But while the bloc’s green transition is creating a huge demand for solar panels, it is also exposing the vulnerability of its domestic industry, which has lost market share to Chinese rivals over the years.

According to the ESMC, China accounts for more than 80% of the global solar module production and has increased its exports to Europe by 40% in 2023.

The trade group claimed that Chinese solar products sold in Europe at prices below their production costs, a practice known as dumping. This practice harms fair competition and violates international trade rules. 

The EU imposed anti-dumping duties on Chinese solar imports in 2013 but lifted them in 2018 after reaching a price agreement with Beijing.

However, the ESMC stated that the agreement did not prove effective, and Chinese solar products continue to be sold at artificially low prices in Europe.

The ESMC said that the EU needed to act fast to save its solar industry, which has already seen several plant closures and job losses in recent months.

Switzerland’s Meyer Burger, one of Europe’s leading solar technology firms, announced plans to close its loss-making production plant in Germany this month, unless the government delivered promised funding.

The ESMC said that the EU should follow the example of the United States, which has imposed tariffs on Chinese solar imports and launched a $3 billion program to support its domestic industry.

The trade group also said that the EU should use its green recovery funds to boost the demand for European-made solar products and create a level playing field for local producers.

The ESMC said that preserving the EU’s solar industry was not only crucial for its climate ambitions but also for its strategic autonomy and technological innovation.

“Solar PV is a key enabling technology for the European Green Deal and the twin green and digital transitions,” the letter said. “Losing the EU PV industry would mean losing the EU’s sovereignty and leadership in the global energy transition.”

A spokesperson said that the commission was monitoring the market situation and the impact of imports on the EU solar sector, and was ready to use its trade defense instruments if necessary.

The spokesperson also said that the commission was promoting the development of a competitive and sustainable solar value chain in Europe, through its industrial strategy, its research and innovation programmes, and its green recovery funds.

The ESMC said it hoped that the commission would act swiftly and decisively to protect the EU’s solar industry and secure its future.

“We are confident that, with the right policy framework and support measures, the EU PV industry can thrive and contribute to the EU’s green and digital leadership,” the letter said.

Source: Reuters

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