Recently, a piece of news about the European Union's green industry proposal to restrict photovoltaic imports has detonated A shares. The most concerned content is that 85% of the components used in European wind farms, 60% of heat pumps, 85% of photovoltaic Electrolyzers must be produced in continental Europe. The market believes that the news will restrict China's photovoltaic imports, triggering a flash crash of many photovoltaic leaders.
And this Thursday (March 16), the news ushered in the official landing. The official website of the European Union officially released the two cornerstones of the green industry plan, the "Net Zero Industry Act" and the "European Key Raw Materials Act". Judging from the proposals, the main purpose of the two major legislations is to ensure the EU's global leadership in green industrial technology.
In the proposal, the EU set a target to increase indigenous production capacity in key green industries such as photovoltaics and batteries to 40% by 2030. At the same time, it is also planned to achieve the goal of 50 million tons of carbon capture by 2030.
Securing supply of key raw materials such as lithium and rare earths
In terms of measures to limit raw materials, the draft "Net Zero Industry Act" stipulates that by 2030, the EU plans to supply at least 10% of key raw materials, process 40% of key raw materials, and recycle 15% of key raw materials from the EU. .
The annual consumption of strategic raw materials from a single third-party country should not exceed 65%, and related products from countries above 65% will be downgraded in tender evaluation, making it harder for buyers to obtain subsidies.
It is worth noting that the restrictions on raw materials in the proposal are mainly in areas such as lithium and rare earths. The purpose of the proposal is to ensure that the EU can obtain a safe, diversified, affordable and sustainable supply of key raw materials, including: rare earths, lithium , cobalt, nickel and silicon etc.
It is understood that the EU is particularly dependent on China for rare earth and lithium resources. Nearly 90% of rare earth and 60% of lithium are processed in China. Among the 30 key raw materials identified by the EU, two-thirds of China is the main exporter.
In the field of solar energy, the EU has not restricted the import of photovoltaic raw materials. The EU also stated that some early stages of the industrial chain, including silicon ingots and silicon wafers, will continue to rely on Chinese imports, accounting for more than 90%.
Even in the proposal, solar energy is "responsible", saying that by 2030, the EU's solar module production capacity will be sufficient to meet at least 40% of the annual expected demand under the REPowerEU and Green Convention initiatives, which involves a 600 GW solar installed capacity plan.
It is not difficult to see that the purpose of the EU's promulgation of this bill is to get rid of the external dependence of the renewable energy industry chain and enhance local renewable energy manufacturing by attracting renewable energy companies to settle in. On the other hand, it is also an escalation of the battle with the United States for renewable energy.
An Escalation in the Battle for U.S. Renewable Energy
Since the White House promulgated the "Inflation Reduction Act" in the second half of last year, Europe and the United States have started a series of subsidy wars for the entry of renewable energy companies. European countries believe that the promulgation of the U.S. "Inflation Reduction Act" snatched away European renewable energy companies, claiming that the U.S. has used large subsidies to induce European renewable energy companies to transfer their industrial chains to the U.S., weakening European new energy manufacturing, and destroying jobs in Europe.
Therefore, since the second half of last year, the European Union has also been stepping up the formulation of a "green subsidy" plan to deal with the "Inflation Reduction Act" of the United States. The "digitalization of the energy system" plan to attract renewable energy companies to settle in is a tough confrontation with the US "Inflation Reduction Act", and this bill is another escalation of the subsidy war between the two sides.
From the bill, we can also see that the core goal of the EU's promulgation of the bill is to achieve carbon emission reduction and establish a diversified green energy supply and its supply chain. In fact, with the support of various subsidies and policies in Europe, A number of Chinese photovoltaic, energy storage, and lithium battery companies have successively gone to Europe for financing and listing.