Solar industry calls for ’emergency measures’ for struggling EU manufacturers – Euractiv EN

European solar panel manufacturers have announced that they do “about to shut down production lines”unless the EU takes extraordinary measures to save the industry, such as buying back their stocks, which have not been yawning empty in recent years due to the influx of cheaper models from China to the continent.

In February last year, the EU presented its “Green Deal industrial plan” (“The Green Deal Industrial Plan”), which aims in particular to support the production of key technologies such as solar panels, wind turbines and heat pumps in the EU in order to reduce dependence on China, which currently holds almost 80% of global solar energy production.

The European Commission wants 40% of European solar panels to be manufactured in Europe by 2030, as well as other key technologies.

The target is set out in the draft regulation for “net zero” industry (Net zero industry law, NZIA) of the EU, which will be the subject of further negotiations between the European Parliament and member states on Tuesday (6 February).

But those efforts may come too late, solar power industry officials have warned.

“We are currently in an unprecedented situation”Žygimantas Vaičiūnas, political director of the European Solar Industry Council (ESMC), told Euractiv.

“This is a critical situation for (photovoltaic module) manufacturers”, he said, as European manufacturers prepare to close their production lines in Europe. This is particularly the case with MeyerBurger, the Swiss manufacturer of photovoltaic modules, which has already threatened to close its factories in Germany and move production to the United States if no political action is taken.

“The EU is now entering a crucial phase where, within the next 4-8 weeks, the main EU (photovoltaic) module manufacturers and their European suppliers will be ready to shut down their production lines unless essential emergency measures are put in place quickly.wrote ESMC in a letter sent last week to European Commission President Ursula von der Leyen, which Euractiv had the opportunity to consult.

This Monday (February 5) afternoon, the Commission is expected to make a statement during the European Parliament plenary session on the state of the EU solar industry in the face of unfair competition.

Is it not possible to do without Chinese modules?

European manufacturers are currently only able to produce 6 gigawatts (GW) of photovoltaic modules per year, while the EU has installed around 56 GW of new solar capacity in 2023 alone. This expansion is expected to increase as EU countries decarbonise their energy systems .

In the face of this observation, countries such as Germany have warned that without Chinese modules, solar capacity expansion targets – and thus the EU’s climate targets – could not be met, as European manufacturers cannot keep up.

Despite demand for panels, over the past two years, the EU has accumulated unsold solar modules made in Europe as well as imported ones, leading to a significant drop in prices, industry representatives complain.

This situation is caused by overproduction in China, explained Žygimantas Vaičiūnas, which forced the manufacturer “lower prices and export as much as possible”.

“There is currently a surplus of imported PV modules in stock in EU ports and warehouses, estimated at between 70 and 85 gigawatts (equivalent to at least 140 to 170 million PV modules)”wrote his association in a letter addressed to Mrs. von der Leyen.

“Chinese companies sell PV modules at prices lower than production costs”, noted Mr. Vaičiūnas. European manufacturers are therefore unable to sell their own modules.

European manufacturers are therefore requesting the buyback of theirs “accumulated stocks of European PV modules” through a special EU fund.

According to Vaičiūnas, this represents the purchase of roughly 800 megawatts (0.8 GW) of modules that European manufacturers are unable to sell.

The European Commission could set up a “entity ad hoc » which would take the form of a new fund worth 200 to 250 million euros, Dries Acke of SolarPower Europe told Euractiv, similar to the one it created to buy vaccines during the Covid crisis.

“We are talking about substantial (amounts), but not unreasonable,” Mr. Acke emphasized.

Protectionism, the solution?

While Žygimantas Vaičiūnas calls on the EU to consider “trade protection measures”i.e. new tariffs on solar panels from China in “The Last Chance”Dries Acke warns against this idea.

His association SolarPower Europe represents not only European installation companies and manufacturers, but also Chinese manufacturers, which according to Mr. Acke is in line with “reality” solar sector.

“Protectionism will not make it possible to achieve 1.5 or even 2 degrees (of global warming)”he emphasized.

In the past, Europe has already imposed tariffs on Chinese solar panels, but “solar production continues to disappear in Europe”he recalled.

According to a report by the European Commission’s Joint Research Centre, manufacturing in China is currently around 35% cheaper than in Europe.

However, industry representatives expect this gap to narrow in the coming years.“We think we’re at the bottom of the price ladder now,” said Mr. Vaičiūnas, adding that “it is clear that prices will rise in the future”even for modules imported from China.

Both industry representatives are pinning their hopes on net-zero industrial regulation, which would force EU countries to set aside a proportion of their subsidies for solar expansion for modules made outside China, such as in Europe or the United States.

“In two or three years, the situation will be completely different because we have all these legislative initiatives planned”said Mr Vaičiūnas, referring to the NZIA and other EU legislation, which could include a ban on the import of products derived from forced labour.

But the question is how European manufacturers can do it“survive in this really critical situation” in the meantime, until regulations for the “net zero” industry go into effect, he said.

“If we lose these key capacities in the coming months, and I’m talking (of generation capacity) basically six GW, it will be much more difficult to restore them afterwards. »concluded Mr. Vaičiūnas.

(Editing by Anne-Sophie Gayet)

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