Brussels throttles imports of Chinese green tech

Brussels will impose import restrictions on green tech from China, downgrade bidders for public contracts and make it harder for buyers to access subsidies.

The measures are expected to be unveiled by the European Commission on Thursday as part of a more aggressive push to tackle China’s dominance in supplying products like solar panels and heat pumps.

Under a draft Net Zero Industry Act submitted to the Financial Times, public tenders using products from a country with more than 65 percent of the EU market share would be downgraded. Similar rules would apply to any government program that subsidizes consumer purchases. “China is a prime example,” said a person familiar with the plans.

Ursula von der Leyen, Commission President, has urged the EU to “reduce” its exposure to China as Brussels seeks to reduce its reliance on the country’s manufactured goods and moves closer to the US’s tough stance on its communist regime.

China is responsible for more than 90 percent of some parts used in solar panels, the document said, and is increasing its dominance in other supply chains, including wind turbine and electric vehicle production. This trend has prompted policymakers to acknowledge that the EU is replacing its dependence on Russian gas with a dependence on clean technology from China.

However, according to people familiar with the situation, the Commission’s Trade Directorate fears that the proposed changes to the government procurement rulebook could breach international rules.

“It’s important that it’s in line with our WTO obligations, our obligations under procurement agreements with the government,” said one, referring to the World Trade Organization which bans discriminatory measures.

“An important element is to make sure that this is not some kind of green protectionism and that we are not making the green transition more expensive for both private companies and taxpayers.”

The draft law could still change after internal discussions between commission departments before its publication.

The draft proposal described the diversity of the offer as a key component in the evaluation of offers. “The supply should . . . are considered insufficiently diversified if a single third country supplies more than 65 percent of the demand for a given net-zero technology within the Union,” it says.

It would also assess the environmental sustainability of the tenders, which could be counted against Chinese imports.

In sectors where EU industry is still strong, such as wind turbines and heat pumps, “our trade balance is deteriorating,” the draft warns amid rising energy and input costs for European manufacturers. Brussels wants to reverse this trend by intervening in the market with the aim of increasing EU production of green technologies to 40 percent by 2030.

The Commission will also seek to boost nascent carbon capture technology by requiring major oil and gas exploration companies to commit to storing up to 50 million tonnes of CO₂ annually by 2030, with each company being given an individual target. Eadbhard Pernot, policy manager at the NGO Clean Air Task Force, said such targets were “the first of their kind”.

A separate critical raw materials proposal on Thursday aims to facilitate domestic mining of lithium and other minerals used in green technology. Brussels wants to introduce stricter environmental measures to limit imports, according to a draft of the text that is still being drafted.

After the Commission publishes its proposals, the European Parliament and member states must approve them before they become law, a process that can take up to two years.

China on Wednesday demanded that European countries implementing significant environmental trade measures submit a written report to the WTO for its members to review their legal basis, the impact on trade, compliance with international rules and the impact of those measures on developing countries, a Geneva-based Can discuss trade, official said. Beijing wanted to start with the EU’s CO2 border tax, which will force foreign importers to bear the costs of their CO₂ emissions from 2026.