EU To Include Solar Products In Carbon Border Adjustment Mechanism To Strengthen Climate Policy And Level Global Competition

The European Solar Manufacturing Council (ESMC) has called on the European Commission to expand the scope of the Carbon Border Adjustment Mechanism (CBAM) to include key downstream solar products such as solar modules, mounting systems, and solar trackers. In its feedback to the Commission’s consultation on CBAM’s future scope, ESMC emphasized that these products depend heavily on carbon-intensive materials like aluminium and steel, which are already subject to CBAM rules.

Currently, imported finished solar equipment is not covered by CBAM, allowing non-EU manufacturers particularly in China to avoid the carbon costs faced by European producers. ESMC argues that this loophole creates unfair competition and undermines CBAM’s goal of preventing carbon leakage. According to Jens Holm, ESMC’s Policy Director, extending CBAM to downstream solar goods would increase the cost of Chinese imports and give European manufacturers a much-needed competitive boost. Holm noted that such a move would act as a strong anti-circumvention measure and could play a significant role in revitalizing Europe’s green technology sector.

Including solar modules, trackers, and mounting systems under CBAM would ensure that imported equipment faces the same carbon costs as EU-made products. ESMC believes this would reinforce CBAM’s credibility, establish a fair market environment, and help secure Europe’s solar manufacturing industry amid growing international competition. CBAM will officially take effect on 1 January 2026, requiring importers to purchase CBAM certificates that reflect the embedded emissions of covered goods.

The mechanism is designed to prevent carbon leakage by aligning the carbon cost of imports with the EU Emissions Trading System price, currently €72 per ton. At present, CBAM applies to cement, electricity, fertilizers, iron and steel, aluminium, and hydrogen. The European Commission is expected to review ESMC’s proposal, along with others, later this autumn.