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					</table><p>Solar component imports into Europe could become more expensive if a proposal to extend the Carbon Border Adjustment Mechanism (CBAM) to solar modules, trackers, and mounting structures is accepted by the <a href="https://commission.europa.eu/index_en" target="_blank" rel="noopener">European Commission</a>.</p>
<p>The European Solar Manufacturing Council (ESMC) has recommended to the Commission that solar products be brought under the CBAM’s ambit, as they rely heavily on carbon-intensive materials such as aluminium and steel, which are already covered by the adjustment mechanism.</p>
<p>“However, finished solar equipment imported into the European Union (EU) currently avoids the carbon costs faced by European manufacturers. This loophole gives non-EU manufacturers, particularly in China, an unfair advantage and undermines CBAM’s core objective of preventing carbon leakage,” ESMC has said.</p>
<p>The production of solar modules, mounting structures, and trackers involves the use of carbon-intensive materials, including aluminum, steel, and glass. ESMC said that in a standard 22 kg module, 14 kg is glass, 3 kg is aluminum, and the remainder consists of other components. A typical ground-mounted solar structure is almost entirely made of steel and aluminum, as is the case for trackers. These products are heavily reliant on CBAM-covered materials, but due to their downstream nature, they are not currently included under it.</p>
<p>ESMC pointed out that European solar manufacturers importing steel and aluminum for domestic production will be required to purchase CBAM certificates. In contrast, Chinese manufacturers are exempt from these costs when they export finished solar products to the EU, despite their products containing large quantities of steel and aluminium. “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,” ESMC said.</p>
<p>Extending CBAM to downstream solar photovoltaic goods would make Chinese solar modules, trackers, and systems more expensive and give European manufacturers a long-awaited competitive advantage, ESMC said.</p>
<p>If the European Commission approves the proposal, Indian solar exporters could also have to pay a price. Historically, the U.S. has been the prime destination for Indian solar exports. However, the 50% trade tariffs and the recent <a href="https://www.mercomindia.com/usitc-votes-to-go-ahead-with-probe-into-solar-imports-from-india" target="_blank" rel="noopener">threat</a> of antidumping and countervailing duties could dent the competitive advantage of Indian solar modules. Indian manufacturers would have to look at other markets, such as Europe.</p>
<p>The European Commission is expected to respond to ESMC’s proposal later this year.</p>
<p>From January 1, 2026, when CBAM comes into force, importers must purchase CBAM certificates that reflect the embedded emissions of covered products. The purpose is to prevent carbon leakage by imposing the same carbon price as in the European Union Emissions Trading System.</p>
<p>As of now, cement, electricity, fertilizers, iron and steel, aluminum, and hydrogen are covered under CBAM.</p>
<p>The transitional phase of CBAM will <a href="https://www.mercomindia.com/eu-adopts-rules-governing-carbon-tariff-measure" target="_blank" rel="noopener">run</a> until the end of 2025.</p>



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					</table><p>The <a href="https://www.commerce.gov/" target="_blank" rel="noopener">U.S. Department of Commerce</a> has found that certain Chinese solar manufacturers have been evading antidumping duty (AD) and countervailing duty (CVD) regulations by assembling solar cells and modules within Southeast Asia. These products are subsequently shipped to the United States.</p>
<p>In its final findings, the investigation revealed that some solar cells and modules exported from Cambodia, Thailand, Malaysia, and Vietnam incorporated wafers that originated in China, contravening U.S. tariffs.</p>
<p>The inquiry identified several companies involved in the circumvention of tariffs. Among them are BYD Hong Kong (Cambodia), New East Solar (Cambodia), Canadian Solar (Thailand), Trina Solar (Vietnam), and Vina Solar (Vietnam).</p>
<p>BYD Hong Kong, Canadian Solar, Trina Solar, and Vina Solar had previously been <a href="https://www.mercomindia.com/us-finds-chinese-module-manufacturers-evading-tariffs" target="_blank" rel="noopener">found</a> to be circumventing tariffs in December last year.</p>
<p>The final decisions will not immediately impact trade at the border. According to the Presidential Proclamation issued on June 6, 2022, solar module and cell imports from the countries above will not be <a href="https://mercomindia.com/president-biden-waives-duties-solar-module-imports/" target="_blank" rel="noopener">subject</a> to duties until June 2024, provided that these imports are utilized in the U.S. market within six months following the termination of the proclamation.</p>
<p>This allows U.S. solar importers ample time to adjust their supply chains and ensure their sourcing practices align with U.S. trade regulations.</p>
<p>The Department has clarified that these findings do not ban imports from these South East Asian countries. Companies will have the opportunity to affirm through certification that they are adhering to duties and not circumventing them; this would exempt them from the circumvention rulings.</p>
<p>The Department establishes that a company is deemed to have evaded tariffs when it utilizes Chinese wafers and at least two of the following materials: silver paste, aluminum frames, glass, backsheets, ethylene vinyl acetate sheets, and junction boxes.</p>
<p>In cases where a company does not possess an existing tariff rate, it will be subject to an AD rate of 238.95% and a CVD rate of 15.24%. If a company previously held a tariff rate from a preceding order, that specific rate will be applicable. However, in instances where the company does not possess a tariff rate, it will adopt the tariff rate of the company from which it sources Chinese materials.</p>
<p>If these scenarios do not apply, the company will be subjected to an antidumping duty rate of 238.95% and a countervailing duty rate of 15.24%.</p>
<p>As the Commerce Department initially determined that circumvention was taking place across all four Southeast Asian countries, the agency is issuing a comprehensive country-wide designation for circumvention. This designation implies that these countries are identified collectively as channels through which solar cells and modules are evading duties on their route from China.</p>
<p>Under U.S. law, the Commerce Department can initiate circumvention inquiries where evidence indicates that goods subjected to existing AD or CVD orders are either completed or assembled in third countries using components imported from the country subject to the order. The imposition of tariff orders is intended to provide relief to domestic industries within the United States when confronted with inequitable competition.</p>


US Concludes Circumvention Inquiries on Solar Products from China

<p>The U.S. International Trade Commission (ITC) has announced antidumping tariff recommendations in the 30-35 percent range, much lower than what Suniva and SolarWorld were looking for.</p>
<p>The full set of recommendations is expected to be submitted to President Trump who has until January 2018 to agree or disagree with the recommendations made by the ITC.</p>
<p>The petitioners and the developer community were engaged in a bitter PR fight to make their respective cases. In the end, it looks like the trade commissioners gave something to both sides without jeopardizing the long-term growth of the U.S. solar sector.</p>
<p>A 30-35 percent tariff would mean approximately $0.10/W rise in module costs, which would take module prices to about the same level they were this time last year. Except for the petitioners and local manufacturers, most of the industry seems pleased with the outcome.</p>
<p>The four commissioners differed in their recommendations &#8211;</p>
<ul>
<li>Commissioners Williamson and Johanson recommended 30 percent tariff for modules phased down by 5 percentage points per year in each of the subsequent 4 years. For cells, they recommended 1 GW tariff-free quota, which would increase by 0.2 GW each year and a 30 percent tariff over the 1 GW quota declining by 5 percent over subsequent 4 years.</li>
</ul>
<p>&nbsp;</p>
<ul>
<li>Commissioner Broadbent recommended a quantitative restriction of 8.9 GW on imports of cells and modules for a four-year period increasing by 1.4 gigawatts each subsequent year. The commissioner also recommended auctioning import licenses for 1 cent per watt to generate at least $89 million in revenue in the first year and increase by at least $14 million each year after.</li>
</ul>
<p>&nbsp;</p>
<ul>
<li>Commissioner Schmidtlein recommended a 0.5 GW tariff-rate quota and a 10 percent tariff, which would increase to 30 percent after breaching the 0.5 GW quota for solar cell imports. For modules she recommended a 35 percent duty declining over four subsequent years.</li>
</ul>
<p>&nbsp;</p>
<p>The release of the recommendations ends months of uncertainty that surrounded the sector affecting solar markets around the world. The case had resulted in an increase in module prices globally and a shortage of modules as U.S. developers had been stockpiling Chinese modules at premium rates fearing the worst outcome.</p>
<p>India <a href="https://mercomindia.com/indias-anti-dumping-investigation-solar-imports-china-taiwan-malaysia-underway/" target="_blank" rel="noopener">initiated</a> its own anti-dumping case against cell and module imports from China, Taiwan, and Malaysia in July this year.</p>
<p>The U.S. ITC recommendations give <a href="https://mercomindia.com/lessons-india-suniva-solar-anti-dumping-hearing/" target="_blank" rel="noopener">India’s</a> office of the Directorate General of Anti-dumping &amp; Allied Duties (DGAD) a precedent to follow.</p>
<p>According to Mercom India sources, a tariff imposition in the range of $0.10 &#8211; $0.18 is being tossed around and with the U.S. ITC recommendations out, we expect DGAD to follow with its own antidumping tariff recommendations in November.</p>


U.S. ITC Recommends Lower than Expected Tariff in Suniva Antidumping Case, Setting a Precedent for India

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