Will Solar Products Be Included in the EU’s Carbon Border Adjustment Mechanism?
With fewer than four months until the European Union’s Carbon Border Adjustment Mechanism (CBAM) enters its definitive phase, the European Solar Manufacturing Council (ESMC) is calling on policymakers to expand the scope of the regulation to cover key downstream solar products.
In a recent statement, the ESMC argued that excluding photovoltaic (PV) goods from CBAM weakens the mechanism’s impact and gives non-EU manufacturers an unfair competitive advantage.
A Loophole in the System
Solar products are built with carbon-intensive materials such as aluminum and steel—commodities already included under CBAM. Yet finished solar equipment imported into the EU currently avoids the carbon costs that European manufacturers must bear.
“This loophole favors non-EU manufacturers, particularly in China, and undermines CBAM’s central objective of preventing carbon leakage,” the ESMC said.
Jens Holm, Policy Director at the ESMC, added:
“Extending CBAM to downstream solar PV goods would make Chinese solar modules, trackers, and systems more expensive and give European manufacturers a long-awaited competitive advantage. By doing so, CBAM could become one of the most effective anti-circumvention measures and substantially contribute to Europe’s green-tech industrial revival.”
Strengthening Europe’s Solar Base
The ESMC maintains that expanding CBAM would enhance the integrity of the mechanism, create a level playing field, and help secure Europe’s solar industrial base amid mounting global competition.
From January 1, 2026, EU importers of covered goods will be required to purchase CBAM certificates reflecting the embedded emissions of those imports. The certificates will be priced to align with the EU Emissions Trading System (currently €75.95/mt, or $89.07/mt).
At present, CBAM applies to cement, electricity, fertilizers, iron and steel, aluminum, and hydrogen. The European Commission is expected to respond to the ESMC proposal—alongside other industry submissions—later this autumn.
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