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November 22, 2023

Brussels Briefing: Solar industry warns protectionism could hamper energy transition

Solar panel park in Spain
The vast majority of the solar panels used in the EU are made in China (Photo: Angel Garcia/Bloomberg)

The EU is in danger of slowing the move to net zero if it follows the position agreed by the European parliament to ban non-EU companies from auctions, says SolarPower Europe. The parliament also agreed carbon farming rules, a position on consumers’ ‘right to repair’, and EU demands for COP28

Local content pre-qualification criteria for clean energy technologies agreed by the European parliament in a vote on the planned EU Net Zero Industrial Act suggests policymakers are yet to understand what makes a proper industrial policy, says Dries Acke, policy director at industry body SolarPower Europe.

The position agreed on Tuesday, which will form the basis for the parliament’s final negotiations with the European Commission and Council, has taken an “ugly turn”, says Acke. He criticised MEPs for their decision to back “pre-qualification criteria on local content, meaning that technologies that are partially produced outside Europe are not even allowed to bid into public auctions”.

“This is a red flag for the solar sector and for those committed to the EU’s energy security and climate goals,” says Acke. “Two things can be true: we must work harder to support European solar manufacturing, and Europe needs to be part of a globalised solar supply chain to meet climate and energy targets.”

Acke dismisses the idea that an industry policy should apply the same rules to all technologies, highlighting the technology-specific components of the US Inflation Reduction Act. “We shouldn’t throw solar deployment under a bus” in an apparent effort to create a “made in Europe” energy transition, he tells Sustainable Views.

He places the blame for this direction of travel at the door of “countries like France that plan to rely less on solar for the energy transition”. Not only is the country’s electricity already relatively low in emissions given its reliance on nuclear, French President Emmanuel Macron has been particularly vocal about creating a “made in France” transition.

Applying non-price criteria

The vast majority of the solar panels used in the EU are made in China, and SolarPower Europe estimates that by 2030 around 60 per cent of the solar power deployed in the EU will happen via auctions.

However, Acke says that he welcomes the EU parliament’s proposal for the commission to come forward with technology-specific guidance six months after the adoption of the act on how and when non-price criteria should be applied in auctions.

“Using non-price criteria is a good idea to reward more sustainable and more locally produced technologies,” says Acke. But he insists that this practice should be “phased in gradually and be tailored to the specific supply chain starting point of solar PV”. It would be “a mistake to apply these criteria sweepingly to all auctions and to all technologies alike from day one”, he says.

The World Wide Fund for Nature’s European policy office, meanwhile, rues the inclusion of “unproven technologies which are not yet commercially available and/or could take decades to become so, such as nuclear fusion or small modular reactors” in the parliament’s proposed text and its decision not to limit carbon capture and storage deployment to “unavoidable emissions in targeted sectors”.

“The parliament has lost its green focus and is instead relying on hocus-pocus,” said Camille Maury, the organisation’s senior policy officer for industrial decarbonisation, in a statement. “Taxpayers’ money will be diverted from the key green technologies needed to decarbonise the European industry on time and it sends the wrong message to European manufacturers.”

Luke Haywood, climate and energy policy manager at non-profit European Environmental Bureau proffers a similar view. “Granting nuclear energy the same access to financial and administrative support as renewables, heat pumps and grids would divert scarce and precious resources from faster and cheaper solutions for decarbonising the EU,” he said in a statement. “We urge EU lawmakers and member states to focus public support on solutions that exist and work now.”

A tighter focus on what constitutes a clean energy technology has also been called for by Cleantech for Europe, the San Francisco-headquartered group backed by Bill Gate’s Breakthrough Energy, in an open letter addressed to MEPs ahead of the vote.

Carbon farming rules

The parliament also voted on the carbon removal certification framework, the final position on which must now be agreed with the other EU institutions. Wijnand Stoefs, policy lead on carbon removals at non-profit Carbon Market Watch, says the parliament’s position is “better” than the commission’s original proposal, but that “policymakers have a lot of work ahead of them at trialogues to turn the CRCF into an effective climate action tool, rather than a smokescreen that hides greenwashing”.

Avoiding greenwashing means “no CRCF units should be sold on voluntary carbon markets for compensation claims or used to offset emissions in compliance instruments like the EU Emissions Trading System”, said Carbon Market Watch in a statement.

The organisation also warns against double counting. “Identifying alternative financial mechanisms for carbon farming and support for climate contribution claims would have been a better and future-proof way forward, rather than this shortsighted focus on voluntary carbon markets,” it said.

Carbon Market Watch has consistently called for policymakers “to think beyond markets” and focus instead on how the EU, member states and business can financially support farmers and foresters to protect and restore the environment.

French MEP Pascal Canfin said on X that the law will “allow all farmers in Europe to be rewarded when they store and reduce carbon on their farms —  good news for the transition to agroecology”.

‘Right to repair’

The EU parliament also adopted its negotiating position on measures to strengthen the right of consumers to get products repaired, meaning that producers will be obliged, for example, to provide spare parts and repair information during the entire expected lifetime of products, while countries will have to adopt measures promoting repair to consumers, such as repair funds or vouchers.

As Sustainable Views reported, some repair companies remain concerned that the proposed law does not go far enough to stop big companies using “parts pairing” practices that can undermine efforts to repair and refurbish electronic and electrical goods.

End fossil fuel subsidies

MEPs also adopted EU demands for COP28, including a call for an end of all direct and indirect fossil fuel subsidies at national, EU and global levels “as soon as possible and by 2025 at the latest”, a global target to triple renewable energy and double energy efficiency by 2030, a tangible phasing out of fossil fuels as soon as possible, and a halt on all new investments in fossil fuel extraction.

The parliament likewise approved the revision of the regulation governing EU carbon dioxide emissions standards for new heavy-duty vehicles in the EU.

A service from the Financial Times