East German state premier blames US for solar industry malaise

Saxony prime minister Michael Kretschmer (CDU/EPP) blamed the USA’s ‘protectionism’ against China for the current malaise of European solar manufacturers, arguing that it proves the necessity of an independent trade policy approach towards China. 

As Europe faces an influx of Chinese solar panels, European module producers are struggling and have called for the EU to take urgent action. 

Already in January, Germany’s biggest remaining solar manufacturer, Meyer Burger, threatened to close its production in Freiberg, Saxony, if there were no immediate political decisions to save the industry.

Asked about the situation on Monday (5 February), Saxony’s Prime Minister Kretschmer (CDU/EPP) blamed the US for the current malaise, calling upon Europe to become more independent in its approach towards China.

“The situation arose because the US market was closed for Chinese solar panels and the products that were on their way from China to America could not be landed there, so the ships were diverted to Rotterdam,” Kretschmer told a group of foreign correspondents, including Euractiv.

The European Solar Manufacturing Council (ESMC) warned in a letter sent to the European Commission last week that between 140 and 170 million solar PV modules have piled up in European ports or warehouses, arguing that it makes it impossible for European producers to sell their own ones. 

Solar industry calls for ‘emergency measures’ as manufacturers prepare to leave Europe

European solar panel manufacturers have warned they are “poised to shut down manufacturing lines” unless the EU takes emergency measures to save the sector, such as a buy-out of their inventories, which have piled up in recent years due to an influx of cheaper versions from China.

“In other words, the problem arises because protectionism is being practised in America, and we are the ones who suffer,” Kretschmer continued.

Therefore, while not agreeing on every aspect with French President Emmanuel Macron, “I think he’s right when he says we […] have to understand that America has its own economic interests, which are not always our own,” Kretschmer added.

However, “we are reliant on America for our defence, we need NATO, we need this alliance, there’s no question about that,” he said.

Regarding trade with China, in turn, “the current policy, which basically follows one-to-one what America is doing, may not be the best way forward,” he said, dismissing calls by the ESMC to consider new tariffs against Chinese solar panels. 

In a speech made in the European Parliament on Monday, EU Commissioner Mairead McGuinness also raised caution on the idea of new tariffs on Chinese PV modules, arguing that “the EU needs to have access to affordable solar panels to fuel the green transition and unlock the economic opportunities”.

Need for a ‘pragmatic solution’

Despite his warnings against protectionism, Kretschmer called for “pragmatic solutions” to improve the situation of European manufacturers. 

“There is currently a huge poster on the Commission building in Brussels – RePowerEU –, you know, the one with these solar panels,” he said.

“I told Mrs von der Leyen at the time that if she doesn’t act now, the European Union will be walled in by Chinese solar modules,” he said, asking: “Is that what we want?”

Alongside other state governments, Saxony has recently called upon the German federal government to introduce so-called “resilience bonuses”, additional subsidies granted for solar panels manufactured outside China, such as in Europe or the US.

A draft law for such bonuses is currently being discussed at the national level in Germany, which many see as the reason for Meyer Burger’s public announcement.

A similar discussion is also ongoing at EU level, where the European Parliament and EU countries are in the last steps of finalising the “Net-Zero Industry Act”, a law that could see such resilience bonuses made mandatory for all EU countries.

Negotiations on this are expected to continue – and potentially be concluded – on Tuesday (6 February).

“We hope that both institutions will find an ambitious agreement on this important piece of legislation in the trilogue tomorrow,” the European Commission’s McGuinness said.

EU countries want to continue using green tech from China

Concerned that excluding Chinese manufacturers of solar panels and other green technologies could slow down the energy transition and raise costs, EU countries on Thursday (7 December) agreed to continue allowing Chinese products for most subsidy programmes for renewable energy.

His critical remarks on the US are not the first time that Kretschmer deviates from the normally transatlantic-oriented line of his political party CDU.

In November 2022, Kretschmer called for a return to energy supply from Russia “once this war [in Ukraine] is over”, raising eyebrows with the political mainstream. 

At the state level in Saxony, Kretschmer’s CDU currently polls behind the far-right AfD, which often takes a critical stance towards the US, reflecting a broad scepticism against the US in the former German East.

Read more with Euractiv

Solar industry calls for ‘emergency measures’ as manufacturers prepare to leave Europe

European solar panel manufacturers have warned they are “poised to shut down manufacturing lines” unless the EU takes emergency measures to save the sector, such as a buy-out of their inventories, which have piled up in recent years due to an influx of cheaper versions from China.