The European Solar Manufacturing Council (ESMC) has urged the European Commission to extend the carbon border adjustment mechanism (CBAM) to cover downstream solar products, including modules, finished panels, mounting structures, and trackers.
The CBAM, a tariff applied to carbon-intensive imports into the European Union, currently covers raw materials such as steel and aluminium. ESMC said this creates a gap in coverage, as ground-mounted PV systems are almost entirely made of steel and aluminium but are not included under the mechanism due to their downstream nature.
ESMC argued that this discrepancy undermines European producers, who must buy CBAM certificates for imported steel and aluminium, while Chinese manufacturers avoid these costs when exporting finished products. “As a result, a Chinese-made module entering Europe receives a free pass on its embedded carbon, giving it a cost advantage over EU-made solar modules,” the council said in a statement.
“This loophole undermines fair competition and contradicts the primary purpose of CBAM: to prevent carbon leakage,” the statement added. The council also said the extension would support the EU’s climate goals, close unintended gaps in carbon pricing, and strengthen Europe’s industrial resilience.
The ESMC warned that Europe’s solar sector faces “severe pressure from unfair competition from China,” which it described as an existential threat to domestic manufacturers and a risk to energy and data security. It has recommended the creation of specific customs codes for mounting systems and trackers to facilitate CBAM’s application to those products.
