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26/09/2016

EU reopens China solar dumping probe

Competition

EU reopens China solar dumping probe

Solar panel assembly line, China. [Shutterstock]

EU regulators opened a probe into the solar power panel industry in China, the European Commission said on Friday (29 May), in response to accusations that Chinese companies were dodging import duties by exporting via Taiwan and Malaysia.

Following a complaint by European firms, “the Commission has concluded that sufficient evidence exists to justify the initiation of an investigation,” the Commission said in the European Union’s official journal.

The complaint threatens to spark a new flare-up in a long-running row on a trade issue that Brussels and Beijing only recently managed to damp down.

The investigation will try to establish whether Taiwanese and Malaysian companies are true producers of solar power products or as European manufacturers allege, only fronts for Chinese producers.

If found at fault, the Commission could impose heavy anti-dumping duties on the Chinese products concerned, in a repeat of a bitter dispute between the two giant trading partners

Top lobby EU ProSun argues China exports solar modules and cells via Taiwan and Malaysia and passes them off as locally made to avoid EU levies.

“Such circumvention is customs fraud and must be stopped,” said Milan Nitzschke, President of EU ProSun in a statement welcoming the probe.

EU ProSun has been a fierce critic of Chinese manufacturers who it says have largely destroyed Europe’s solar panel industry.

After months of tit-for-tat reprisals involving punitive levies on solar panels and a widening range of other goods, the EU and China called it quits in 2013 and agreed a new minimum price regime for solar panel imports from China.

This does not cover all Chinese companies however and there have been repeated complaints by European firms over alleged breaches of the accord which expires at the end of this year.

The Commission, the EU’s executive arm which polices competition issues, launched an investigation in December into alleged Chinese dumping of solar glass, a key component of solar panels.

Background

The European Commission decided in 2013 to impose punitive import duties on solar panels from China in a move to guard against what it sees as dumping of cheap goods in Europe.

Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand.

EU producers say Chinese companies have captured more than 80% of the European market from almost zero a few years ago, exporting €21 billion to the European Union in 2011.

As a result, Chinese-made panels are as much as 45% cheaper than those made in Europe, industry executives say.

Marking an escalation of the dispute, China hit back a few months later by launcing a probe into the EU wine sector.

>> Read: EU-China solar trade spat escalates as Beijing hits back with wine probe

While some European and US manufacturers would welcome EU action, installers and prospective purchasers of solar technology are concerned that such a move will drive up the cost of solar panels, leading to a slowdown in the deployment of the technology and job losses across the industry.

German Economy Minister Philipp Roesler said the European Commission made a "grave mistake" by agreeing to duties on solar panels from China and urged the Commission to work to prevent the eruption of a trade conflict.

>> Read: German minister calls EU move on China solar 'grave mistake'

Brussels and Beijing finally reached an "amicable solution" in July 2013, agreeing to a minimum price for solar panel imports.

Angry European solar panelmakers blasted the deal as "unacceptable and completely against European interests,” vowing to take their case to the European Court of Justice.

>> Read: Collapse of solar case against China sparks recriminations

A group of European solar panel producers then lodged a new complaint with EU regulators, accusing Chinese rivals of trying to evade import tariffs by shipping their products via third countries.

>> Read: EU solar producers launch new action against Chinese rivals

Further Reading

Official Journal of the EU

  • Investigation concerning the possible circumvention of anti-dumping measures (1 & 2)

European Commission