Most European Union (EU) countries and the European Commission are set to sign the draft “European Solar Charter” aimed at mobilizing more EU funding and national aid to support Europe’s ailing solar manufacturing industry, as reported by Reuters on April 15. According to the draft document, member states will integrate criteria such as cybersecurity and sustainability requirements into their renewable energy auctions to help local manufacturers. They will also streamline the permitting process for manufacturing facilities under EU rules. Moreover, the Commission will collaborate withthe European Investment Bank (EIB) to support projects, with plans to launch a cross-border European solar manufacturing project. However, the document did not mention about the use of trade weapons like trade tariffs or restrictions on solar panel imports, possibly due to concerns that these measures jeopardize the EU’s green transition target.

Europe’s solar panel manufacturers are facing anexistential threat from Chinese competitors, whose products are quality-comparable but almost 50% cheaper than their European counterparts. Industry groups have called for subsidies for local solar manufacturers and trade restrictions on oversupplied Chinese products to protect the EU supply chain. However, the EU heavilyrelies on cheap solar panel imports to meet its energy transition target, with nearly 97% of solar panels and parts installed in Europe coming from China. The recent “European Solar Charter” could provide similar support to local producers as the “wind power package” introduced last October, which aided wind turbine manufacturers by speeding up permitting procedures and offering them financial guarantees through the EIB.

Sources:

https://www.reuters.com/sustainability/eu-countries-pledge-help-solar-sector-no-trade-curbs-china-draft-shows-2024-04-15/

https://www.scmp.com/news/china/article/3251047/eu-rebuffs-european-solar-industrys-plea-emergency-help-fight-cheap-china-imports

https://www.ft.com/content/39af71b4-36dc-4bb9-a181-3710fdfb7ac2