China solar firms should focus on ESG amid domestic competition, regulatory hurdles: GCL

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An executive at GCL Technology Holdings says solar panel makers need to pay greater heed to their carbon management

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An employee at a GCL factory in Hefei, Anhui province, China. Photo: Reuters

Yujie Xue

Published: 8:00pm, 26 Dec 2024

China’s solar panel producers need to focus on minimising how much greenhouse gas they emit, an executive at one of the country’s largest solar firms said, so manufacturers can navigate cutthroat competition at home and regulatory barriers overseas.

“Companies should consider carbon management to be their third core [focus] in addition to costs and technologies,” said Amy Song, the chief sustainability officer at GCL Group, during an interview with the Post this month.

More advanced and better carbon management will enable Chinese solar photovoltaic (PV) companies to cope more effectively with the industry’s cyclical nature and environmental, social, and governance (ESG) regulations in the global market, Song said. This will increase their bargaining power, she added.

Song’s advice came as China’s PV manufacturers, who control more than 80 per cent of the global supply chain, have weathered geopolitical and industry turbulence in 2024 and could face more stringent environmental requirements in the future.

Emissions from the manufacturing of solar equipment represented 0.15 per cent of energy-related global carbon emissions in 2021, according to the International Energy Agency (IEA). Most solar PV manufacturing is powered by fossil fuel and production is largely concentrated in China, where coal continues to account for more than half of the nation’s energy consumption, according to the IEA.

It would take about four to eight months of solar-panel operation to offset the industry’s manufacturing emissions, the IEA said.

At the end of 2023, China’s annual production capacity for finished solar modules was the equivalent of 861 gigawatts (GW), more than double the global module installations of 390GW, according to data from the China Photovoltaic Industry Association (CPIA).