Analysis of the First Quarter of 2026: Current Development Directions and Export Policies in the Glass Products Industry

2026-03-14

I. Summary of Core Conclusions

The current Glass industry is at a critical window of "structural differentiation."

Policy Changes:Starting from April 1, 2026, China will cancel most value-added tax (VAT) export rebates for glass products, including photovoltaic glass, certain deep-processed glass, and daily-use glass. This represents the biggest variable facing the industry, aimed at forcing industrial upgrading and eliminating low value-added capacity.
Development Direction: The industry is shifting from "scale expansion" to a "dual drive of quality and green growth." Photovoltaic glass is moving towards ultra-thin and large-size development; electronic and pharmaceutical glass are becoming high-profit growth points; traditional architectural and daily-use glass face severe overseas cost pressures and must break through branding and high-end strategies.
Market Landscape:Overcapacity remains serious in the low-end segments, but high-end niche areas (such as high borosilicate glass and ultra-thin electronic glass) are in short supply, with industry concentration further increasing.

Ⅱ. Analysis of major adjustments in export policy (2026 New Deal)

According to the announcement issued by the Ministry of Finance and the State Administration of Taxation (No. 2 of 2026) and the latest management measures of the State Administration of Taxation, the export environment of the glass industry will undergo fundamental changes in 2026:

Cancellation of export tax rebates (key time point: April 1, 2026)
- Scope of coverage:
- • Photovoltaic products: including photovoltaic glass modules, etc., completely abolishing VAT export tax rebates.
- • Glass products: clearly cover daily glass (such as Glass Bottles and jars), some deep-processed glass (such as tempering, lamination, insulating glass, etc. with code 7006-7009).
- • Other related products: ceramics, cement, some chemical raw materials, etc. will be canceled simultaneously.
- Policy intent:
- • Inhibit low-end capacity output: Low-value-added products (such as ordinary glass bottles and basic building glass) that relied on tax rebates to maintain price competitiveness in the past will lose their price advantage.
- • Encourage high value-added transformation: Force enterprises to shift from simply selling products to the "product-technical service" model, or migrate to the upstream of the industrial chain (high-tech barrier products).
- • Financial and environmental considerations: Reducing implicit subsidies for high-energy-consuming and high-emission products is in line with the "dual carbon" strategy.
Direct impact on the enterprise
- • Profit squeeze: For foundry companies with already thin net profit margins, canceling the tax rebate of about 13% may directly lead to losses.
- • Bargaining power transfer: Leading companies with core technologies (such as ultra-thin photovoltaic glass and high-performance automotive glass) (such as Fuyao and Xinyi) have the ability to transmit costs to overseas customers, while small and medium-sized enterprises will face order loss.
- • Change of overseas model: Simple product trade is unsustainable, and enterprises need to accelerate the construction of overseas factories (avoiding the impact of tariffs and tax rebate cancellations) or transform into overall solution providers.
Note: According to industry analysis, specific high value-added categories such as high-end automotive glass are not currently included in the core target of the "low value-added" list of completely canceling tax rebates, but the caliber of policy implementation needs to be subject to the specific HS code and the latest interpretation of the customs, and enterprises need to pay close attention to the actual implementation rules after April 1.

III. Four Core Directions of Industry Development

1. New Energy Drive: "Lightweight and Thin" and "Double-Glass" Photovoltaic Glass
• Trend: With the improvement of N-type solar cell module efficiency, ultra-thin photovoltaic glass of 2.0mm and below has become mainstream, and the mass production yield of 1.6mm glass has surpassed 92%.
• Double-Glass Module Penetration: The penetration rate of double-glass modules is expected to exceed 85% by 2026, driving a surge in demand for backsheet glass.
• Capacity Layout: Production capacity is shifting to the northwest region to take advantage of local inexpensive green electricity to reduce energy costs, while being close to silicon material sources to form an integrated "light-glass-electricity" cluster.
• Challenges: Despite growing demand, the rapid early-stage expansion of production capacity has led to temporary oversupply. The industry is undergoing a harsh "reshuffle period," with small and medium enterprises exiting due to inability to bear cold repair costs and energy consumption standards.
2. High-End Manufacturing: Domestic Substitution of Electronic Glass and Pharmaceutical Glass
• Electronic Glass: Driven by 5G, AI, and foldable smartphones, demand for high-alumina cover glass and UTG (ultra-thin flexible glass) is booming. Domestic companies are working to master high-generation overflow process technology to reduce reliance on Corning and Schott.
• Pharmaceutical Glass: Under the consistency evaluation policy, the replacement of low-borosilicate glass by medium-borosilicate glass (used for vaccine and biologic drug packaging) is accelerating. This is a high-margin and high-barrier incremental market.
3. Green and Low-Carbon: From 'Passive Emission Reduction' to 'Zero-Carbon Factories'
• Technological Innovation: Full oxygen combustion, hydrogen-melt furnaces, and CCUS (carbon capture) technologies are becoming standard.
• Energy Efficiency Standards: The Ministry of Industry and Information Technology and industry associations impose strict energy consumption requirements per product unit. Production lines that do not meet benchmark standards will be forcibly shut down.
• Circular Economy: High-ratio reuse technology of cullet (waste glass) has become a key method for reducing costs and carbon emissions.
4. Intelligence and Branding in Traditional Fields
• Daily Glass: In the context of tax rebate cancellation, it is necessary to shed the "street vendor goods" image, transform into high-end crystal glass and art glass, and establish self-owned brands (OBM) to directly reach C-end consumers.
• Architectural Glass: Transition from single glass sales to energy-saving window systems and BIPV (Building Integrated Photovoltaics) overall solutions to increase the value of individual products.

IV. Strategic Recommendations

In response to the new situation in 2026, glass product companies should adopt the following strategies:

Recalculate export costs: Immediately simulate the cost model after the export tax rebate is canceled on April 1. For low-margin orders, either raise prices or abandon them to avoid "losing more by exporting more."
Accelerate global layout: Companies with sufficient strength should speed up the construction of production bases in Southeast Asia, the Middle East, or Mexico, leveraging local resources and China trade agreements to mitigate policy risks.
Deepen high-tech tracks: Increase R&D investment in microcrystalline glass, special fireproof glass, and smart dimming glass. These products are less affected by tax rebate policies and have pricing power.
Reduce costs through digitalization: Use AI and the Internet of Things to optimize furnace control, reduce fuel consumption, and decrease finished product loss. This is fundamental to surviving in the "post-tax rebate era."

Summary: 2026 is a "watershed" year for the glass industry. The era driven by policy incentives and low-cost factors has completely ended. The future belongs to leading companies capable of global capacity layout, mastering core material technologies, and achieving ultimate green manufacturing.