What do market access standards have to do with industrial policy?

The European Union has set a goal of at least 30 GW of European solar manufacturing, at each stage of the value chain, by 2030. Right now, however, European solar manufacturers are facing a crisis. Market forces are driving down the price of solar components, making it difficult for Europe’s solar industry to sell their products. Some parts of the European solar value chain are particularly impacted, like solar modules and wafers. We continue our urgent calls to support these critical links in the solar-led energy transition.

As part of the package of solutions SolarPower Europe has been calling for in our long-standing industrial advocacy, we identify clear market access standards as a key complement to industrial strategy.

It’s important to make the distinction that market access rules are – rightly – driven by motivators wider than industrial strategy. First and foremost, setting minimum thresholds for the Environment, Social and Government performance of products entering the EU is critical to upholding European values; ensuring that the way Europe interacts with a globalised economy supports the continent’s climate leadership and its strengthening of quality of life and work around the world.

Market access standards help establishing a level-playing field of competitiveness internationally. These rules alone will not support the reshoring of solar manufacturing in Europe but that is also not what they’re designed for.

With landmark EU supply chain legislation now wrapped up, this week’s edition of Solar Manufacturing Matters dives into what those laws are, and how they impact the solar sector.

Policy Friday Focus: EU Market Access Standards

On 24 May 2024, the EU’s 27 governments formally approved the EU Corporate Sustainability Due Diligence Directive (CSDDD). The CSDDD will enter into force across all Member States 20 days after its publication in the Official Journal of the EU. Member States will have two years to transpose the legislation into national law. The law requires businesses to conduct responsible corporate behaviour with regards to human rights and environmental considerations, including in their value chains inside and outside Europe, and take measures to counteract and prevent adverse effects of their operations.

The CSDDD applies to companies with more than 1000 employees, and a net worldwide turnover of more than EUR 450 million in the last financial year, and companies that entered franchising agreements in return for royalties of more than EUR 22.5 million. The legislation covers around 5,300 companies in the EU. The law has no specific reference to the solar sector, however, of course solar companies under the scope will need to ensure their compliance. From summer 2024, EU Countries have 3-5 years to Implement the CSDDD.?The implementation is staggered, with smaller companies having longer to comply.

The CSDDD is the sister legislation to the EU Forced Labour Ban. In European Commission President Ursula von der Leyen’s State of the Union Speech in September 2021, she announced that the EU would come forward with a ban on products being made with forced labour, being placed on the EU market. That kicked off a legislative process, where an official proposal for the law was published a year later in September 2022 – you can read SolarPower Europe’s statement welcoming the publication here.

The Forced Labour Ban was agreed by Council and Parliament in March 2024. Together, the CSDDD and Forced Labour Ban are integral tools to support supply chain sustainability. Companies need legislative certainty to manage their compliance requirements effectively and efficiently, and through these latest political decisions, the solar sector now has a path forward to reinforce our supply chain sustainability in line with law.

The focus now comes to the implementing guidelines of the Forced Labour Ban. The European Commission should soon adopt clear implementation guidelines for customs authorities, national authorities and economic operators, with particular attention to SMEs, to ensure consistent and efficient rollout across Europe. What applies at the port in Rotterdam should apply to the border of Hungary, and those rules should be made clear to industry. We are looking forward to the implementation guidelines to get clarity on route to compliance. To ensure legislative coherence – and the clearest route possible – it makes sense that the CSDDD is referenced within the final text and implementing guidelines of the Forced Labour Ban regulation.

Command from law is essential in driving compliance. To support companies on their route to compliance, sectors should be able to cooperate in Multi-stakeholder Initiatives (MSIs). Examples of successful MSIs include Fairtrade International , the Forest Stewardship Council , the Aluminium Stewardship Initiative , or the IRMA Initiative for Responsible Mining Assurance .

Multi-stakeholder Initiatives (MSIs) are robust ESG assurance and certification schemes governed by balance of stakeholders including industry representatives and civil society who are independent of the relevant industry. MSIs typically rely on third-party, independent supply chain audits conducted against international and sector-specific ESG operating practice standards.?

MSIs are founded on the principle of equal representation of all stakeholders in decision making, and transparent complaints mechanisms reinforcing the legitimacy and effectiveness of such initiatives. By uniting diverse stakeholders, including civil society, these initiatives create a broader, more inclusive platform for dialogue and action, leading to more comprehensive and sustainable solutions.

The solar sector is currently developing its own MSI – The Solar Stewardship Initiative (SSI) . Discover more about the SSI.

Ecodesign - coming soon?

For those in the know, the upcoming EU Ecodesign and Energy Label policy measures for solar PV products are some of the most hotly anticipated legislative pieces in the works. These are the technical and information requirements that set the minimum standards for circularity, energy performance and environmental sustainability for products being placed onto the European market.

Deep dive and demystify the upcoming Ecodesign and Energy Label rules for solar PV in this opinion piece from SolarPower Europe in pv magazine Global .

Solarcoaster

The latest ups and downs in the EU solar manufacturing landscape.

CLOSURE -? Solarwatt will close German battery storage production following module factory closure

INNOVATION - Fraunhofer ISE creates 24% efficient TOPCon cell with M10 silicon wafers

INNOVATION - Slovakian researchers find new hydrophobic, antireflective coating for solar glass

TRADE - Wafer prices further decline, concerns arise about survival chances of producers

Solar Manufacturing Matters is a fortnightly newsletter on the European solar manufacturing landscape. Every other Friday, check out our latest EU policy analysis and a roundup of solar manufacturing market news.

From SolarPower Europe, the award-winning European trade association with over 300 members active at every point in the solar PV value chain.