The European Solar Manufacturing Council (ESMC) has proposed to the European Commission that solar modules, trackers, and mounting structures be included under the Carbon Border Adjustment Mechanism (CBAM). This move could make solar component imports into Europe more expensive, particularly from countries like China, which dominates the global solar market. The ESMC argues that solar products rely heavily on carbon-intensive materials like aluminum and steel, which are already covered by the CBAM. However, finished solar equipment imported into the EU currently avoids the carbon costs faced by European manufacturers, giving non-EU manufacturers an unfair advantage.
The production of solar modules, mounting structures, and trackers involves the use of large quantities of aluminum, steel, and glass. For example, a standard solar module contains 14 kg of glass, 3 kg of aluminum, and other components. Similarly, ground-mounted solar structures and trackers are almost entirely made of steel and aluminum. Despite this, these products are not currently included under the CBAM due to their downstream nature.
The ESMC points out that European solar manufacturers importing steel and aluminum for domestic production will have to purchase CBAM certificates, while Chinese manufacturers are exempt from these costs when exporting finished solar products to the EU. This gives Chinese solar modules a cost advantage over EU-made solar modules. Extending the CBAM to downstream solar photovoltaic goods would make Chinese solar modules, trackers, and systems more expensive and give European manufacturers a competitive advantage.
If the proposal is accepted, Indian solar exporters could also be affected. With the US market becoming less competitive due to trade tariffs and antidumping duties, Indian manufacturers may look to Europe as an alternative market. However, they would then have to comply with the CBAM and purchase certificates to reflect the embedded emissions of their products. The European Commission is expected to respond to the ESMC’s proposal later this year, with the CBAM set to come into force on January 1, 2026. The mechanism aims to prevent carbon leakage by imposing the same carbon price as in the European Union Emissions Trading System on imported goods. Currently, cement, electricity, fertilizers, iron and steel, aluminum, and hydrogen are covered under the CBAM.