A trade row between Brussels and Beijing over claims that China has unfairly priced its solar panels for export could be just weeks away.
The German solar panel manufacturer SolarWorld AG is forming an organisation modelled on its Coalition for American Solar Manufacturing (CASM) to demand strong EU anti-dumping action against China.
The coalition won a similar case in the United States last week.
If firms representing more than one-quarter of Europe’s solar manufacturing output sign the anti-dumping petition, the EU would be obliged to decide on action within 45 days.
“When we file the case, we will represent more than 25% of the industry,” Milan Nitzschke, vice president of SolarWorld said in the Brussels office of the legal firm Crowell & Moring.
“We’re confident,” he told EURACTIV. “Everyone in manufacturing is injured [by China’s actions], so there will be a broad coalition [with] at least a two-digit number of companies from different EU member states.””
A petition is expected to be filed before the European Commission breaks for its summer holiday in late July.
Earlier in the year, EU officials had murmured that “something is cooking but it’s not yet in the kitchen,” according to one industry player.
But a tone change was already evident when Marc Vanheukelen, the head of the trade commissioner Karel De Gucht's cabinet, told the European Policy Centre that the EU was actively considering a lawsuit against China in March.
“Our aim is open and fair trade,” EU trade spokesman John Clancy told EURACTIV yesterday (22 May). “So it is our role to defend European production against international trade distortions such as subsidisation or dumping, by applying trade defence instruments in compliance with EU law and WTO rules.”
Before acting, Brussels will have to weigh whether there is clear and sufficient evidence that harm has been caused to a significant share of Europe’s solar industry, he added.
Nitzschke said the new tariffs against Chinese solar companies announced by Washington on 17 May had sent a “very important signal” to Brussels.
Following a similar SolarWorld petition, the US slapped punitive tariffs of between 31% and 250% on Chinese solar companies for unfairly cutting their prices to drive non-Chinese players out of business.
China expressed its “extreme dissatisfaction” at the move and warned that it could affect clean energy cooperation.
EURACTIV contacted several Chinese officials but they all declined to comment on the migration of the issue to Europe.
However, Gregory Spanoudakis, the president of European operations for Canadian Solar, one of the companies hit by the new US sanctions, warned that “protectionist measures would not only increase prices, they would also destroy jobs.”
Only 20% of the 300,000 people employed in Europe’s solar industry work in manufacturing, he noted.
“Raw material suppliers, equipment manufacturers, project development, logistics, construction, installation and maintenance would all suffer from this misguided attempt to protect manufacturing, an activity already heavily outsourced,” he said.
China exports more than 90% of its solar panels to Europe and the US, and holds more than 60% of the global market, adding to fears that it has a game plan to bankrupt other countries’ solar sectors and then set global prices from a monopoly position.
Beijing provides some $30 billion to its solar energy industry in the form of subsidies and cheap loans.
CASM officials say that the last Chinese Five Year Plan for the solar industry projected a goal of reducing solar module costs to $1.10 per watt by 2015, higher than the current cost of Chinese photovoltaic [PV] modules, suggesting current PV production runs at a loss.
But Europe’s solar industry is divided about how damage that might actually cause, even if there is near unanimity that access to the Chinese market should be opened up.
In April, Reinhold Buttgereit, the head of the European Photovoltaic Industry Association, told EURACTIV that “without global competition and cheap Chinese PV modules, we wouldn’t be as close to grid parity [competitiveness with fossil fuels] as we are today.”
Differences of emphasis
In the European Commission too, there are differences of emphasis about the benefits that growing international competition in the PV market can have on innovation and cost reductions.
“Recent developments in the photovoltaic market illustrate this,” says a draft of the European Commission’s forthcoming communication on renewable energy, seen by EURACTIV.
“Given the benefits that come from expanding global trade, it is important that measures that might handicap trade… are avoided and trade on fair terms is facilitated by all our trading partners,” it says.
The Commission is developing a proposal to keep trade in the renewable energy sector fair and ensure reciprocity of treatment, according to the communication.