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					</table><p>The <a href="https://commerce.gov.in/" target="_blank" rel="noopener">Ministry of Commerce</a> has allowed developers of Special Economic Zones (SEZ) and units in SEZs to install solar systems for captive consumption, following demands from the Export Promotion Council for Export Oriented Units and SEZs (EPCES).</p>
<p>In a clarification, the ministry said that duty benefits under Section 26 of the SEZ Act are allowed for SEZs to install, operate, and maintain renewable energy equipment like solar panels exclusively for captive use on the condition that the power generated is not wheeled out to the domestic tariff areas (DTA). The solar equipment will be treated as capital goods.</p>
<p>The ministry has also directed Development Commissioners of SEZs to consider requests from SEZ developers/co-developers to set up non-conventional power plants as part of infrastructure with fiscal benefits. However, no fiscal benefits will be available for the solar systems&#8217; operation and maintenance (O&amp;M).</p>
<p>According to EPCES, various IT/ITES developers had requested that they be allowed to import solar panels without duties and procure them from DTAs without payment of GST to install them in their buildings to provide power supply to common areas of SEZs.</p>
<p>Units in SEZs had raised a similar demand but there was no clarity in this regard in the SEZ power guidelines. According to existing provisions, SEZ and IT/ITES developers can set up units in SEZ processing areas with fiscal benefits but under the Net Foreign Exchange (NFE) obligation.</p>
<p>EPCES had contended that it was difficult for SEZ units to operate with the NFE obligation. However, municipal and development authorities had made it mandatory for the units to install solar power systems before commencing their operations.</p>
<p>The matter was resolved after EPCES brought the difficulties faced by its members to the attention of the Commerce and Power ministries and the Directorate General of Export Promotion, Central Board of Indirect Taxes and Customs.</p>
<p>In May, the Ministry of New and Renewable Energy had <a href="https://www.mercomindia.com/renewable-sezs-green-hydrogen-exempt-almm" target="_blank" rel="noopener">exempted</a> renewable energy projects located inside SEZs and EOUs and supplying power exclusively to green hydrogen (or its derivatives) projects, also located in an SEZ or set up as an EOU, from the purview of Approved List of Models &amp; Manufacturers for solar modules.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>


SEZ Developers Allowed to Install Solar Systems for Captive Consumption


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					</table><p>A parliamentary committee has asked the government to seek postponement of the application of the <a href="https://european-union.europa.eu/index_en" target="_blank" rel="noopener">European Union</a>’s Carbon Border Adjustment Mechanism (CBAM) to the Micro, Small &amp; Medium Enterprises (MSME) sector by at least three years.</p>
<p>In a recent report, the <a href="https://sansad.in/rs/committees/13?departmentally-related-standing-committees" target="_blank" rel="noopener">Standing Committee on Commerce</a> expressed concern over the potential hindrances posed by tariff and non-tariff barriers raised by the EU and the U.S., which could impede the growth of the MSME sector.</p>
<p>Early last year, India and China <a href="https://www.mercomindia.com/india-voices-concern-over-europes-carbon-tariff-measure-at-wto" target="_blank" rel="noopener">expressed</a> concern over CBAM at the World Trade Organization (WTO). The issue is likely to figure at the WTO’s Ministerial Conference to be held in Abu Dhabi from February 26 to 29.</p>
<p>While acknowledging the noteworthy role played by engineering exports in the overall merchandise exports of India and the prospect of achieving the $300 billion export target by 2030, the standing committee felt that Indian manufacturers in the MSME sector may not have the financial resources to make changes to overcome the challenge posed by CBAM.</p>
<p>To protect the MSME sector from the U.S.’ Expansion Act of 1962 and non-tariff barriers in the form of CBAM, the committee recommended that the government engage at the highest level with the U.S. and EU, respectively, to resolve the matter.</p>
<p>It also recommended putting in place a robust mechanism to support and equip MSMEs to counter the adverse effects of CBAM.</p>
<p>With the European Commission adopting the rules governing the implementation of the carbon tariff on imported goods, the transitional phase of CBAM <a href="https://www.mercomindia.com/eu-adopts-rules-governing-carbon-tariff-measure" target="_blank" rel="noopener">started</a> last October. It will be in force until the end of 2025, with full implementation starting in 2026. CBAM will initially apply to imported products and commodities like cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.</p>
<p>The carbon tariff measure has governments and exporters of goods from countries outside the EU worried because they fear their competitiveness will be adversely impacted by having to pay a price for the carbon emissions generated during the manufacture of goods. The tariffs on goods manufactured by hard-to-abate sectors like steel and cement are expected to be as high as 35%.</p>
<p>Besides manufacturers in the MSME sector, the Indian steel industry is also likely to face negative consequences of the EU’s carbon tariff measure.</p>


Seek Deferment of CBAM by Three Years, Parliamentary Panel Tells Government

<p>The United States solar industry could miss out on 18 GW of solar deployment by 2023 due to steep duties proposed by an anonymous group of petitioners, the Solar Energy Industries Association (<a href="https://www.seia.org/" target="_blank" rel="noopener">SEIA</a>) said in a letter to the Commerce Secretary.</p>
<p>The letter noted the petition before the Department of Commerce is to seek 50-250% duties on imported crystalline silicon photovoltaic (PV) panels and cells from Malaysia, Vietnam, and Thailand. These countries account for 80% of overall penal imports of the U.S.</p>
<p>The proposed duties would impact the livelihoods of 231,000 solar workers and the country’s effort to fight climate change, SEIA said.</p>
<p>The association also alleged that the anonymous solar tariff petition is based on a false premise that cells and panels manufactured in Malaysia, Vietnam, and Thailand are insignificant. They are made in China predominantly and passed through the targeted nations. The petition also alleged that some companies are circumventing anti-dumping and countervailing duties imposed on China in 2012.</p>
<p>According to forecasts from Wood Mackenzie, the United States will <a href="https://mercomindia.com/us-adds-5-7-gw-solar-capacity-q2-2021/" target="_blank" rel="noopener">add</a> around 30 GW of new solar capacity in 2022 and 33 GW in 2023. However, the deployment pace is short of reaching President Joe Biden’s 2035 clean energy targets, and implementing these duties would be a catastrophic blow to any chance of addressing climate change.</p>
<p>Abigail Ross Hopper, President and Chief Executive Officer of SEIA, said, “I cannot overstate the dire threat that these reckless petitions are imposing on hundreds of thousands of American families. The anonymous petitioners are asking the Department of Commerce to misinterpret not only U.S. law but also overturn a decade of department decisions in solar trade cases, all to benefit a few anonymous petitioners at the expense of the entire U.S. solar economy. We urge Commerce to use its discretion and dismiss these frivolous petitions.”</p>
<p>According to the <a href="https://mercomindia.com/solar-energy-could-account-for-40-of-us/" target="_blank" rel="noopener">report</a> of the U.S. Department of Solar Energy Technologies Office and the National Renewable Energy Laboratory, solar could account for as much as 40% of the nation’s electricity supply by 2035 and 45% by 2050 with aggressive cost reductions, supportive policies, and large-scale electrification.</p>


Proposed Steep Duties Could Cost US 18 GW of Solar Deployment by 2023: SEIA

<p>The government of India’s Department of Commerce will soon have a Directorate General of Trade Remedies (DGTR). The Commerce and Industry Minister, Suresh Prabhu, has given his approval for the creation of DGTR in the department.</p>
<p>The minister’s approval came following an amendment made to the Government of India (Allocation of Business) Rules, 1961 on May 7, 2018.</p>
<p>DGTR has been approved with a sanctioned strength of 112 posts drawn from Directorate General of Anti-dumping and Allied duties (<a href="http://www.dgtr.gov.in/" target="_blank" rel="noopener">DGAD</a>) of Department of Commerce and Directorate General of Safeguards (<a href="http://dgsafeguards.gov.in/" target="_blank" rel="noopener">DGS</a>) of Central Board of Excise and Customs (CBEC).</p>
<p>DGTR will be a multi-service organization drawing upon the skill-set of various officers from the field of international trade, customs, revenue, finance, economics, costing, and law. DGTR will be the apex national authority for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.</p>
<p>The DGTR will bring DGAD, DGS and safeguard functions of Directorate General of Foreign Trade (DGFT) into its fold by merging them into one single national entity.</p>
<p>The creation of DGTR by merging DGAD and DGS will also result in saving 49 government posts. This development is also in tune with the goal of Prime Minister Narendra Modi to have “minimum government and maximum governance”.</p>
<p>It will also provide trade defense support to our domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries. In the last three years, India initiated more than 130 anti-dumping, countervailing duty, and safeguard cases to deal with the rising incidences of unfair trade practices and to provide a level playing field to the domestic industry.</p>
<p>Suresh Prabhu termed the creation of DGTR, an issue pending since 1997, to be the manifestation of Prime Minister’s vision to provide a level playing field to our domestic industry.</p>
<p>This will be positive for the renewable energy sector in India. The current rate of resolution of such cases in India is very slow. In the past, lengthy investigation into <a href="https://mercomindia.com/dgad-anti-dumping-solar-imports-malaysia/" target="_blank" rel="noopener">anti-dumping</a> had disrupted the solar sector. Another example is the ongoing investigation into the <a href="https://mercomindia.com/madras-high-court-dismisses-petition-levy-safeguard/" target="_blank" rel="noopener">safeguard duty case</a>.</p>
<p>With the creation of DGTR such cases are expected to be fast-tracked, helping the fledgling solar sector of the country.</p>


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