ESMC is urging the European Commission to extend the carbon border adjustment mechanism (CBAM) to key downstream solar products.
Feedback from the council published on the commission's website says the mechanism, a tariff on carbon-intensive products imported to the European Union, should include solar modules and finished solar panels, mounting structures featuring aluminium and steel frames and solar trackers.
The council’s statement highlights that although a typical ground-mounted PV structure is almost entirely made of steel and aluminium – materials featured under the CBAM – the system itself is not currently covered under the mechanism due to its downstream nature.
ESMC says this creates “a critical asymmetry” as European solar manufacturers importing steel and aluminium for domestic production are required to purchase CBAM certificates, while Chinese manufacturers are exempt from these costs when they export finished solar products to the EU.
“As a result, a Chinese-made module entering Europe receives a free pass on its embedded carbon, giving it a cost advantage over EU-made solar modules,” the council’s statement adds. “This loophole undermines fair competition and contradicts the primary purpose of CBAM: to prevent carbon leakage.”
The council’s statement adds that extending the CBAM to downstream solar goods would also align with the EU’s broader climate objectives, close an unintended gap in the carbon pricing regime and ensure the mechanism remains fair and comprehensive.
It also says that Europe's solar industry is currently under severe pressure from unfair competition from China, which it adds poses an existential threat to Europe’s manufacturers, creates enormous data and energy security risks and is both climate and environmentally unsustainable.
The council has recommended the adoption of specific customs codes for solar mounting systems and trackers. It suggests the move would facilitate the application of CBAM to these products.
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