EU curbs on Chinese components risk halting renewables rollout in poorer countries, industry warns

By Alex Lefkowitz and Kate Abnett

BRUSSELS, July 9 (Reuters) - A ban on EU funding for Chinese-made inverters — a critical clean energy component — could slow or even halt the rollout of solar and wind projects in poorer European countries that rely on public money, companies and investors warned.

The European Union is seeking to become more self-sufficient in strategic industries but is currently still heavily dependent on Chinese supply chains for technologies crucial to the bloc's green transition.

The European Commission blocked EU funding in May for inverters — an essential part in solar, wind and battery storage systems — from so-called "high-risk" countries, including China, over security concerns.

China supplies about 70% of Europe's inverters.

EU BAN RAISING PROJECT COSTS, FREEZING FINANCE DECISIONS

In a letter to European Commission President Ursula von der Leyen, dated July 7 and seen by Reuters, 36 companies and investors warned that restricting Chinese inverters would disrupt solar and wind expansion in Central and Eastern European countries. 

Those countries are already lagging behind wealthier Western European nations in their efforts to move away from fossil fuels.

"It risks slowing — and in some markets halting — the energy transition in the entire region," the industry players wrote.

They warned European-manufactured supply is not yet sufficient to replace Chinese parts, leading to higher costs and project delays, while a lack of clarity about how the EU will apply the ban was "freezing financing decisions across the region".

Consultancy Wood Mackenzie estimates that between 2026 and 2030 the EU restrictions will force around 14% of European solar projects and 12% of energy storage deployments, which would likely have used Chinese inverters, to seek alternative suppliers. Romania, the Czech Republic and Greece are among the most affected markets.

Instead of limiting Chinese supply, the companies asked the EU to impose rules restricting foreign companies' access to their inverters once they are installed in the European grid. Inverters can typically be remotely accessed by the manufacturer, for example, to update software. 

Some EU officials have said such an approach is unlikely to provide a strong enough firewall against potential interference. 

(Reporting by Kate Abnett; Editing by Joe Bavier)