EU proposal to detonate the domestic solar photovoltaic industry, whether it affects China's solar exports?
EU proposal to detonate the domestic photovoltaic industry, whether it affects China's solar exports?
Recently, a news about the EU's green industry proposal to limit photovoltaic imports has attracted much attention, which requires 85% of the components used in European wind farms, 60% of heat pumps, 85% of photovoltaic cells, 85% of electrolytic cells must be produced in mainland Europe. The market believes that the news will limit China's photovoltaic imports, triggering a number of photovoltaic leading flash crash.
On March 16, the official website of the EU officially released the two cornerstones of the green industry program, the Net Zero Industry Act and the European Key Raw Materials Act proposal, from the proposal, the two main purposes of the legislation is to ensure the global leadership of the EU green industry technology.
In the proposal the EU has set a target to increase the local production capacity of key green industries such as photovoltaics and batteries to 40% by 2030. It also plans to achieve a target of 50 million tons of carbon capture by 2030.
The proposal of the Net Zero Industry Act proposes that by 2030, the EU plans to source at least 10% of its annual supply of key raw materials, 40% of its processing of key raw materials, and 15% of its recycling of key raw materials from EU territory. In addition, the proposal set, from a single third-party countries should not exceed 65% of the annual consumption of strategic raw materials, higher than 65% of the country's relevant products will be downgraded in the tender evaluation, and the product's buyers will be more difficult to obtain government subsidies.
Europe and the United States photovoltaic products rely excessively on China after the release of this proposal, most people believe that this brings new challenges to the European as the main export market of Chinese photovoltaic export enterprises. In recent years, the European market has been dependent on imports of photovoltaic products from China. From the data of 2022, the European market is highly dependent on Chinese photovoltaic products rather than decline. 2022 China's total exports of photovoltaic silicon wafers, cells, modules and other products exceeded three consecutive "tens of billions" mark, reaching 51.25 billion U.S. dollars, compared with 28.4 billion U.S. dollars in 2021 rose by more than 80%. According to market information company data show that in 2022, Chinese PV companies exported a total of 154.8GW of photovoltaic modules, an increase of 74% compared to 2021. The export value of $41.2 billion, up 65.3% year-on-year. Among them, more than half of the PV products exported to the European region. 2022, China exported 86.6GW of PV modules to Europe, an increase of 112% year-on-year, Europe has become the largest exporter of Chinese PV module products. At the same time, Europe and the United States PV installed demand soared at the same time, countries are also actively promoting the localization of photovoltaic manufacturing. In addition to the "Net Zero Industry Act" proposal, at the end of last year, the European Commission formally established the European Solar Photovoltaic Industry Alliance, used to promote investment in the EU solar manufacturing industry. EU internal market officials said that the EU is now almost completely dependent on China in photovoltaic manufacturing, China currently controls 80% of the world's solar photovoltaic manufacturing capacity, in the global market share of polysilicon and silicon ingots, will soon reach nearly 95%.
Does it affect China's PV exports? "The EU introduced this policy is not at all aimed at restricting China, but to benchmark the U.S. Inflation Reduction Act (IRA). If the EU does not do so, their local enterprises to build factories, including manufacturing capacity are 'run' to other countries, so the fundamental purpose of the introduction of the policy can be understood as to preserve the local manufacturing is not 'snatched' away." A senior PV industry sources told. Talking about the impact on Chinese photovoltaic enterprises, the above-mentioned senior PV industry insiders said that the impact of this bill on China-related photovoltaic enterprises is at least not as big as the reaction on the plate, and should not have a substantial impact on Chinese enterprises within two or three years. "In the current situation, the EU needs to develop clean energy such as photovoltaic wind power, but also need China's photovoltaic products." He believes that the "Net Zero Industry Act" is still in the draft stage, has not yet formed a clear legislation, and so on to complete the legislative process for at least another year. In the meantime, the content of the bill still needs to be discussed within the EU. For example, France hopes to include nuclear power, while other EU countries believe that only photovoltaic, wind power belongs to green power, so the content of the bill is still controversial within the EU. In addition, from the bill finally landed, to the EU to cultivate photovoltaic capacity, individuals believe that at least another three years or so. "For Chinese PV companies, they can choose to go to Europe to build factories.
According to the U.S. Inflation Reduction Act (IRA), (the U.S.) will not conduct a retroactive investigation of the place of incorporation of the parent company. That is to say, if the relevant enterprises have factories (capacity) in Europe or Southeast Asia, it is also possible to circumvent the content of the restrictions within the Net Zero Industry Act on the products of a particular country's market share in Europe shall not exceed 65%." The above PV senior industry insiders added.
