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The European Photovoltaic (PV) manufacturing industry, appreciating the fact that European Commission adopted ‘Wind Power Package’ on the October 24th, strongly urges the European Commission to prepare and adopt a similar package to enhance the competitiveness of European PV manufacturing in current critical circumstances of oversupply of imported PV modules from China.

European Solar Manufacturing Council (ESMC) strongly requests to prepare legislative framework for safeguarding European 40 GW PV manufacturing capacities in 2030 along the entire value chain as a security of supply leverage and adopting the respective concrete annual targets from 2025 to 2030 including some emergency measures to prevent bankruptcies of European PV module producers.

While the Net-Zero Industry Act goes into the right direction by introducing resilience criteria in auctions and public procurements, the committed capacities for European-produced PV modules should be clearly defined by the legislative and non-legislative decisions, so that European PV manufacturers would have a clear segment of market for their resilient PV production.

The European PV manufacturing industry is grappling with existential challenges, primarily stemming from external supply pressures, and the need to meet European manufacturing targets while enhancing competitiveness. Failing to incorporate concrete PV manufacturing targets by reserving a part of the market for European-made products — including respective implementation framework in ‘European Solar PV Manufacturing Package’ or similar framework of instruments — could lead to a substantial loss of the European PV manufacturing industry, despite the ongoing efforts of the European Commission in initiatives like TCTF, REPowerEU, and the European Solar PV Industry Alliance.

The current situation for European PV manufacturers is dire as some major PV module producers are contemplating decisive decisions by the middle of November about closure of production facilities or relocating their manufacturing to other regions. However, the adoption of a comprehensive ‘European Solar PV Manufacturing Package’ for safeguarding off-take of European-produced PV products without delay could potentially prevent the bankruptcies of European PV module producers.

The ‘European Solar PV Manufacturing Package’ or similar framework must prioritize the following 3 key milestones for immediate adoption:

  1. Safeguard off-take of European-produced PV products: Legislative requirements should reserve a portion of the market for domestic products, starting, as an example, with a 10–15 % target by 2025/2026, increasing each year toward the 2030 goal of 40% or 40 GW of PV manufacturing capacities.
  2. Ensure supply chain resilience: Incorporate extra points for European-produced PV modules, taking into account resilience criteria and ESG (Environmental, Social, and Governance) criteria. This should include yearly benchmarks, well-defined mechanisms, and a mandatory implementation framework to support the European value chain.
  3. Ban PV products produced with forced labour: Leverage the existing Uyghur Forced Labor Prevention Act (UFLPA) Entity List to prohibit PV products produced with forced labour in the EU market. The ongoing legislative proposal in the EU goes in the right direction but even once adopted the implementation could take at least 18 months — we cannot tolerate forced labour in the EU market, and this should be prohibited without any delay.

The ESMC emphasizes that in 2022, the EU trade deficit with China in PV components amounted to €25 billion. An integrated policy framework is essential to address this trade deficit, enhance EU solar PV manufacturing capacities, reduce reliance on imported PV technologies, and ensure the achievement of EU Green Deal targets.

As already proposed by the European Solar PV Industry Alliance by providing annual financial support between €4.7 billion and €6.4 billion, the European PV manufacturing industry commits to delivering at least 30 GW of European PV manufacturing capacities along the entire PV value chain, contingent on the adoption of the above-mentioned key milestones within the potential ‘European Solar PV Manufacturing Package’.

Image copyright: Systovi

Žygimantas Vaičiūnas
ESMC Policy Director

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