EU's solar plans in SE Asia caught in US-China trade war

EU's solar plans in SE Asia caught in US-China trade war. Photo by Biel Morro on Unsplash

Deutsche Welle

<a href="https://news.abs-cbn.com/business/01/01/24/worlds-largest-solar-project-breaks-ground-in-ph-says-spnec" id="isPasted">&#39;World&rsquo;s largest solar project&rsquo; breaks ground in PH, says SPNEC</a><a href="https://news.abs-cbn.com/business/01/05/23/ph-gets-137-b-investment-pledges-from-china-on-energy" id="isPasted" rel="noopener noreferrer" target="_blank">PH gets $13.7 billion &#39;investment pledges&#39; from China firms for renewable energy: Palace</a>In 2022, the Biden administration ordered a two-year tariff reprieve for solar panel imports from Malaysia, Thailand, Cambodia and Vietnam to prevent disruptions in domestic solar deployment while US manufacturing scaled up. However, this moratorium expired in June 2024, leading to immediate reactions from major Chinese-owned solar panel producers.In that same month, the Chinese photovoltaic company Longi Green announced the suspension of production at a battery plant in Vietnam, while Trina Solar initiated maintenance shutdowns at its facilities in Thailand and Vietnam.Some manufacturers have shifted production to Indonesia and Laos, which currently do not face US tariffs. Indra Overland, head of the Norwegian Institute of International Affairs&#39; Center for Energy Research, told DW that tariffs could promote further industrial diversification in the region, which is not necessarily a negative outcome.A shift from Southeast Asia?Concerns about the industry&#39;s future remain high. Earlier this year, the US Department of Commerce launched an investigation into whether solar producers in the four aforementioned Southeast Asian countries were receiving government subsidies and dumping products in the US market. In August, Bloomberg reported that some US firms are lobbying for tariffs as high as 272% on all solar imports from these nations.&quot;There is concern, particularly if Donald Trump gets reelected, about the stability of these alternative manufacturing choices,&quot; Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, told DW.&quot;If the US intensifies its crackdown on products with any Chinese content, it will make it harder for plants in Vietnam and elsewhere to ship finished solar panels to the US,&quot; she added. &quot;It&#39;s possible, though currently less likely, that the EU would follow suit, which would weaken the business case for investments in Southeast Asia.&quot;Over the past year, two of the world&#39;s largest solar companies, Jinko Solar and TCL Zhonghuan, have announced significant investments in the Middle East.However, analysts believe that major Chinese solar producers will not leave Southeast Asia anytime soon. Despite higher US tariffs, these companies are still expected to profit from the American market.While the EU has imposed tariffs on Chinese solar imports, it has been more lenient with imports from Southeast Asia. The US and the EU have differing objectives: &quot;The US is focused on building domestic production, while Europe&#39;s priority is ensuring there are enough panels available for installation,&quot; said Elms.Though some solar panel manufacturers have shut down operations in Malaysia, Vietnam and Thailand, many remain open and are looking to boost exports to India and Europe.Analysts warn that a surplus of Southeast Asian-produced solar panels could undermine the EU&#39;s domestic solar manufacturing industry. According to Wood Mackenzie, EU-made solar modules cost around $0.34 (&euro;0.31) per watt, compared to $0.15 per watt in China and Southeast Asia.<iframe width="640" height="360" src="https://www.youtube.com/embed/Vz8dJ0k2880?&wmode=opaque&rel=0" frameborder="0" allowfullscreen="" class="fr-draggable"></iframe> A boon for Europe&#39;s green agendaOn the other hand, reduced solar exports from Southeast Asia to the US due to tariffs could lead to falling prices as Chinese manufacturers in the region seek new markets. &quot;Southeast Asian solar panels could flood the EU market as they are squeezed out of the US,&quot; said Overland.An additional outcome of rising tariffs could be increased solar panel availability within Southeast Asia itself. &quot;This would be a positive development,&quot; Overland noted, &quot;as these countries have lagged in their energy transition. More panels are also likely to be redirected to other developing regions, which is beneficial.&quot;Greater solar panel availability in Southeast Asia could support the EU&#39;s green agenda in the region.While Southeast Asia contributes roughly 5% of global emissions, the International Energy Agency has predicted that its CO2 emissions could rise to 2.4 gigatons by 2040, a 71% increase from 2018 levels.Solar and wind capacity in the region grew by 20% in 2023, reaching more than 28 gigawatts, according to a recent Global Energy Monitor report. With a substantial base of hydropower, this growth brings the bloc close to its renewable energy capacity target of 35% by 2025, GEM reports.Edited by: Srinivas Mazumdaru

Chinese-owned solar companies operating in Southeast Asia &mdash; particularly in Thailand, Vietnam, Malaysia and Cambodia &mdash; are facing potential challenges due to rising US tariffs. These countries account for around 40% of solar module production capacity outside of China and may soon be subject to additional US tariffs amid accusations of aiding China in circumventing US import duties.In response, many Chinese firms have scaled back operations in Southeast Asia, complicating the European Union&#39;s efforts to expand its solar capacity. Southeast Asia, second only to China in solar panel production, accounted for over 80% of US solar imports by the fourth quarter of 2023, according to S&amp;P Global Market Intelligence.

US tariffs on Southeast Asian solar exports could further weaken solar panel producers in the European Union, but also help the EU's green agenda.

US tariffs on Southeast Asian solar exports could further weaken solar panel producers in the European Union, but also help the EU's green agenda.

EU's solar plans in SE Asia caught in US-China trade war | ABS-CBN News

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EU's solar plans in SE Asia caught in US-China trade war

EU's solar plans in SE Asia caught in US-China trade war