European Solar Manufacturing Council (ESMC) input to WG3 - Secure Supply Chains

Response to the Invitation for stakeholder inputs and comments on EU-U.S. Trade and Technology Council Working Group 3 on Secure Supply Chains – CLEAN ENERGY

European Solar Manufacturing Council (ESMC) is highly supporting the EU-US Trade and Technology Council (TTC) efforts to coordinate approaches to key global technology, economic, and trade issues with a view to deepen transatlantic trade and economic relations and presents the position to Trade and Technology Council Working Group 3 on Secure Supply Chains. 

1.    What should be the main concrete objectives towards which this working group could work in your sector? More specifically, what concrete problems or issues have you encountered related to supply chain resilience which you believe could be addressed in the TTC Working Group 3 on Secure Supply Chains?

Almost 100% import dependency on solar PV hardware is a critical issue for the EU and US in current dedicated pursue of the strategic goals towards green and climate neutral economy and energy. Development of effective and costs competitive PV manufacturing domestically should be addressed urgently to safeguard the successful achievement of climate and energy goals and ensuring positive spill-over to economies and societies of the EU and US. Currently the EU and US are witnessing the tremendous growth in solar PV installations and a double growth of the PV installations are forecasted just during the next 2-3 years. However, the EU and US overdependency on PV production imports could have not only negative economic impact, but also negative green and climate neutral economy implementation consequences in the short, medium and long term. While in the EU about 15% of the new global PV systems were installed in 2020, Europe only produced 11% of the PV silicon, 1% of ingot and wafers, 0.4% of cells and 4% of modules of the global production. The global annual PV market is forecasted to grow from 150 GW to 600 GW annually within this decade, but up to now in the EU only 10 GW of new PV manufacturing capacity is planned. Similar trends are also visible in the US, however, some dedicated efforts and incentives to support PV manufacturing in the US are just emerging. The competitive participation in global PV manufacturing value chains could be based on decades of intense and successful R&D efforts in the development of low-cost and high-efficient PV cell and module concepts in the EU and US.

In the TTC Working Group 3 on Secure Supply Chains the solar PV supply chain resilience should be addressed by ensuring the smooth coordination of the instruments and the incentives for the EU and US PV manufacturing to be competitive worldwide. The first target would be to ensure significantly higher domestic manufacturing capacities inside the EU and US. However, this target, as well as the momentum to supply the EU and US manufacturing to the global markets, will not be effectively achieved without constant policy and specific incentives coordination between the EU and US.

2.    What actions would you propose to reach these objectives? For example, how could transparency of supply chains be reinforced? How could the EU and the U.S. cooperate to effectively increase supply chain resilience? 

For the supply chain resilience of the solar energy the EU and US should exchange the information on policy measures and the planned incentives for PV manufacturing sector in the EU and US. This exchange of information, coordination of actions and specific implementation programs should be dedicated to streamline the efforts to ensure the product and price competitiveness of the PV manufacturing in the EU and the US in significantly reducing the import dependency without any further delay in these areas:

- Financial incentives for the PV manufacturing (subsidies and public support, loans, tax credits);

- Policy frameworks for the PV production (sustainability principles, circularity of the PV production, EcoDesign, green public procurement, Eco-labelling and other measures are critical to promote high environmental standards and low carbon footprint in the PV manufacturing);

- Horizontal policy measures and incentives dedicated to ensuring the social standards and protection of workers and labour rights (exploring the ways to combat non-market, trade distortive practices and addressing the forced labour issue in third countries).