European solar panel makers ask EU for ‘emergency’ steps to block China’s ‘significant oversupply’

European solar panel producers are calling for urgent curbs on Chinese access to the EU photovoltaic (PV) market to save their industry.

In a letter sent to the European Commission, a group representing “nearly the entire European PV manufacturing industry” called for “emergency measures” to safeguard the EU supply chain amid “significant oversupply” from China.

It claimed that oversupply of PV modules from China late in 2022 and through 2023 had “triggered a drastic reduction in prices”, forcing European manufacturers to reduce production and leaving stocks “languishing” in warehouses.

“Unfortunately, these stocks remain unsold due to the prevailing market conditions characterised by ultra-low pricing, a situation expected to persist at least throughout 2024,” read the letter from the European Solar Manufacturing Council (ESMC), which represents around 80 companies.

ESMC has demanded an immediate three-pronged response: an European Union buyout of the continent’s solar PV inventories, Brussels-backed project financing for local producers, and speeding up of future regulations to ban panels made using forced labour and reduce over-dependence on single nations.

The latter points are likely to penalise Chinese supplies, but given that Brussels has yet to finalise its forced labour or net-zero industry regulations, individual tenets of the laws would be difficult to bring forward.

Should Brussels not be ready to move on these actions “over the next four to eight weeks”, immediate safeguarding measures must be taken, ESMC demanded.

These would be specific trade defence tools that allow the EU to ban or restrict imports in case of a “sharp” or “unforeseen” uptick that “causes or threatens serious injury to domestic industry”, the group said.

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China-EU summit: Xi Jinping calls on EU leaders to work together and strengthen mutual trust

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The call comes at a sticky moment for Brussels, as the bloc tries to ramp up solar capacity while trying to reduce its reliance on Chinese supplies.

EU climate policies have also come under attack. Farmers protesting against “costly” and “complex” agricultural and environmental regulations toppled a statue of a steelworker outside the European Parliament in Brussels on Wednesday night.

Johan Lindahl, secretary general of the ESMC, said the group was in talks with several EU member states on lodging a formal complaint with Brussels and triggering safeguard measures.

ESMC is not calling for an anti-dumping or anti-subsidy investigation into Chinese supplies because that could take years to complete, Lindahl said. “The industry could be gone by then,” he told the Post.

EU trade spokesman Olof Gill said that the commission “is aware of the challenges faced by the sector, is closely monitoring the situation and keeps all options on the table”.

However, it is known that the EU, and the PV industry itself, are divided on the use of trade defence measures.

Solar Power Europe, an industry group where Chinese companies account for 12.6 per cent of revenue and hold 14 per cent of total voting rights, opposes trade actions, but backs more state support for the sector.

EU slows China de-risking plans in face of member state resistance

“We are aghast at the rumours that a trade defence investigation could be launched into solar,” Walburga Hemetsberger, CEO of SolarPower Europe, said late last year.

“This is an affront to the clear messages that the solar sector has repeatedly set out. We have better, faster, and more effective solutions for the crisis that European manufacturers face. Europe must not betray its climate and energy security targets.”

Chinese customs data shows that shipments of solar PV cells to the EU’s 27 member states were worth US$19 billion last year, down 16 per cent from US$22.6 billion in value terms in 2022.

The solar spat is one of a number of fronts in a tense EU-China trade dynamic.

The bloc is currently investigating subsidies in the Chinese electric vehicle manufacturing sector, which could lead to import duties being imposed on the products.

It is also expected to soon launch a probe into EU firms’ access to the Chinese medical device sector.

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