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Brazil has decided to impose a 12% import tariff on photovoltaic modules

According to foreign reports, on December 12 (last Tuesday), the Brazilian government approved measures to increase import tariffs on photovoltaic modules and wind turbines, saying that this move would promote the production of local renewable energy equipment. This measure will officially take effect on January 1, 2024, two weeks later.

Brazil's Ministry of Industry and Trade said in a statement that the country's government has eliminated a 12% import tax subsidy for photovoltaic modules because the country also produces similar products.

At the same time, the Brazilian government also revoked more than 300 temporary tax reduction measures for solar modules and took effect within 60 days.

Brazil also produces some equipment for solar power generation. In fact, solar energy has become the second largest source of electricity in the country. This move will have a considerable impact on China’s photovoltaic industry. Because most of Brazil's photovoltaic modules are imported from China.

From January to October this year, China exported US$3.164 billion of photovoltaic modules to Brazil, ranking second among the top ten exporters of photovoltaic modules.

In fact, China’s exports to the Netherlands are not a true reflection of the country’s photovoltaic installed capacity. The reason why the Dutch trade volume is so high is mainly due to its strong re-export trade potential. The so-called re-export trade means that a country imports goods from other countries and then exports them to a third country without substantively processing or changing the goods. In 2022, the Netherlands' import and export trade volume will reach US$1.86 trillion, ranking fourth in the world after China, the United States, and Germany. In fact, most of China's leading photovoltaic companies have established overseas warehouses/front-end warehouses in the Netherlands in order to facilitate European dealers to pull goods.

If we do not consider the export of Chinese companies' Southeast Asian production capacity to the United States, Brazil is the largest exporter of Chinese photovoltaic products.

In terms of photovoltaic installed capacity, the Brazilian market cannot be underestimated. Brazil's solar power installed capacity will be 24GW in 2022, ranking eighth in the world. As of October 2023, Brazil's total solar installed capacity is estimated to be approximately 34.2GW. In the first ten months of this year, Brazil achieved 10GW of newly installed photovoltaic capacity, more than all of last year.

According to foreign reports, the restoration of tariffs on photovoltaic products has been welcomed by the Brazilian Electrical Industry Association Abinee. The association said local manufacturers "suffered losses and lost jobs". Imported Asian products have an unfair advantage because they are subsidized in their countries of origin.

The Brazilian government has also increased the minimum power generation capacity of wind turbines to qualify for import tax exemptions. Equipment with power above 7,500 kilovolt-amperes (kVA) will continue to be exempt next year, compared with 3,300 kVA previously. From 2025, all imported wind turbines will be subject to an import tax of 11.2%.

The measure should benefit wind turbine manufacturers, who complain of increased competition from imported products while the local industry shrinks as some multinationals stop production in Brazil.

It is worth mentioning that Chinese wind power manufacturing companies have begun to deploy in Brazil. On November 29, 2023, the first blade manufactured by Sinoma Technology (Brazil) Wind Turbine Blade Co., Ltd., the GW83.4 blade, successfully rolled off the production line, marking that Sinoma Blade Brazil has the production and manufacturing capacity of 5MW blades.


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