The EU is set to take a step back in its escalating solar war with China and back off from trade curbs and instead aid its own industry with more funding.
Most of the bloc’s members are set to commit more support to help their ailing solar panel manufacturers and opt to avoid using trade restrictions on cheap panel imports from China, a draft document showed.
While Europe is installing new solar panels at record speed, most come from China, and Europe’s few panel manufacturers are struggling to compete, prompting some to cut production or make plans to shift investments to the US.
A draft ‘European Solar Charter’ set to be signed by the European Commission and most EU countries on Monday said governments would consider using more EU funding and national aid to back solar manufacturing projects.
“Further urgent action is needed in the short term to address the crisis in the European manufacturing industry,” said the draft document, seen by Reuters.
EU officials said more than 20 of the EU’s 27 countries were set to sign up to it.
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The governments said they would add criteria like cybersecurity and sustainability requirements to their renewable energy auctions to help local manufacturers, and quickly apply EU rules to speed up permits for manufacturing facilities.
The draft said the European Commission would work with the European Investment Bank to support projects, and consider launching a cross-border European solar manufacturing project.
It steered clear however of any commitments on EU trade tariffs or restrictions on solar panel imports.
European solar panel manufacturers have previously asked the EU to consider trade safeguards on Chinese imports, but Brussels and governments including Germany have warned broad curbs on Chinese supply could stunt Europe’s fast expansion of clean energy.
The vast majority of solar panels and parts installed in Europe come from China – in some cases 95%, International Energy Agency data show. Utilities and panel installers generally do not support import curbs.
The EU has so far taken more targeted actions, looking at individual instances of Chinese subsidies, as it attempts to help European clean tech manufacturers compete with foreign suppliers.
Brussels launched two investigations this month into whether Chinese bidders benefited excessively from subsidies in their offers in a European public tender.
The EU said last week it will also investigate subsidies received by Chinese wind turbine suppliers.
- Reuters with additional editing by Sean O’Meara
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