Chinese solar dumping complaint calls for 120% duties hike

Solar panel assembly line, China. [Shutterstock]

The anti-dumping complaint against China's solar panel manufacturers levelled by the EU ProSun group appears to call for price tariffs on Chinese solar products of up to 120%, EURACTIV has learned. EU ProSun filed a separate anti-subsidy suit against China in Brussels yesterday (25 September).

The group, which is led by Germany’s SolarWorld AG, says that for EU countries to operate profitably, anti-dumping price increases are needed of 120% for Chinese solar modules and wafers, and 80% for Chinese solar cells, according to legal documents posted online.

“If the anti-dumping investigation results in the types of increases in costs that are being requested of the EU, we’re looking at a return to 2009 prices without 2009 feed-in tariffs,” said Jodie Roussell, a spokeswoman for Trina Solar.

The Changzhou-based Trina Solar is one of the companies being investigated by the European Commission, along with Yingli Green Energy, Suntech Power Holdings Co Ltd, and Canadian Solar Inc.

Until yesterday, details of ProSun's earlier anti-dumping complaint had not been made public. But a legal summary, published by a rival coalition, the Alliance For Affordable Solar Energy (AFASE), outlined what they said was the core case against the Chinese companies. 

This is that dumping margins – the difference between Chinese domestic sales prices and export prices to the EU – are running at 60-70% for solar modules, 70-80% for solar cells and 80-90% for solar wafers.

AFASE claims that the complaint has been calculated according to US prices – rather than actual Chinese sales figures – due to a claim that China is a non-market country.

“Thus, EU ProSun has arrived at dumping margins that are unrelated to the actual sales prices and costs in China,” the legal summary asserts.

Although EU ProSun has not provided its own legal summary, it disputes this interpretation, arguing that the Commission can only impose duties at the slimmer end of its dumping and injury margins.

China currently accounts for more than 50% of the world’s photovoltaic production.

Anti-subsidy suit

But the anti-subsidy suit that EU ProSun filed yesterday targets Chinese state banks for allegedly providing illegal credit lines that have enabled this market domination.

In a similar case that SolarWorld pursued in the United States, the US Department of Energy ruled that Beijing had provided over $25 billion in subsidies to its budding clean technology sector. 

"We're calling for the European Commission to go to China and look at their books, and I expect that they will find even more [than $25 billion of subsidies]," Milan Nitzschke, a vice president of SolarWorld AG, told EURACTIV.

"The China Construction Bank offered credit lines of about €33 billion to companies which would never get a loan in the Western world," he said.

"Those companies can go to Western banks and ask for a loan with a low interest rate and it is beating European companies out of business."

China now has enough capacity to meet worldwide solar demand twice over, Nitzschke claimed, a "totally crazy" situation that ProSun intended to correct.

The European Commission has 45 days to decide whether to open an investigation into its case, which risks provoking retaliatory measures by Beijing.

Lion’s share of the market

The details of the EU ProSun case emerged as the EU’s Joint Research Centre published a report finding that two-thirds of global PV installations – with an output of 18.5 GW – took place in Europe last year.

The continent’s overall PV capacity now stands at 52MW, allowing it to meet around 2.2% of the EU’s electricity needs, enough to power a country with the electricity demand of Austria. 

In all, €98.5 billion was invested globally in the clean energy technology in 2011.

According to a separate report published by the European Photovoltaic Industry Association (EPIA) yesterday, an acceleration of solar supply to meet as much as 15% of Europe’s electricity by 2030 is now “very realistic”. 

The action plans of member states currently envisage the EU deriving just 2.4% of its electricity by 2020. But the bloc is already approaching this figure and EPIA predicts PV will account for at least 4% of Europe’s power by the end of the decade.

“The markets for solar PV are expanding and widening rapidly,” Frauke Thies, EPIA’s policy director, told EURACTIV.

However, the very success of Solar PV has sparked calls from some, like the EU’s energy commissioner, Günther Oettinger for a scaling back of current subsidy policy.

'Too much support for renewables'

“There has been too much support [for renewables] in some cases,” he said at an energy ministers’ press conference in Cyprus earlier this month. “More has been done to encourage renewables than necessary, leading to ‘free rider’ effects.”

The ‘free rider’ jargon refers to cost-inefficient renewables projects which receive public funding from EU states. 

“We’re preparing [to ensure] that support scheme for renewables should gradually reduce over time,” Oettinger said. “How long? That’s the question.”

The EU’s forthcoming internal energy market proposal, which EURACTIV has seen, says that support scheme rules “need to be regularly reviewed as to their continuing necessity and proportionality”.

The document also flags a forthcoming guidance from the European Commission on “best practice and experience gained in renewable energy support schemes and on support scheme reform”.

Three scenarios

Regardless of the regulatory backdrop, EPIA’s paper ‘Connecting the Sun’ projects three scenarios for the uptake of solar PV in Europe’s electricity grid:

  • Under a baseline business as usual scenario, solar PV makes up 4% of electricity provided in 2020 and 10% in 2030;
  • These figures rise to 8% and 15% respectively under an accelerated scenario;
  • With a paradigm shift scenario, a 12% and 25% share of the continent’s electricity pie could be achieved.

The study argues that even without major grid upgrades, high levels of PV penetration are possible, using a mix of existing storage facilities, demand-side management, and PV’s on-or-near-site generation potential to obviate the need for transmission lines.

In some 15 regions of the EU, PV already covers close to 10% of the annual electricity demand, and in Extremadura in Spain, it provides more than 18% of power.

Over the last decade, Europe’s PV industry grew by an average of over 40% a year, while production costs fell by around 60%.

A statement sent to EURACTIV by EU ProSun said: "To the extent the Commission investigation were to confirm margins of dumping and injury that we saw when drafting the complaints, the Commission could propose measures only at the lower of those two margins, not at the higher.  Thus, EU law limits the level of duties imposed to the lesser of the dumping margin and the injury margin." 

"We talk generally about 60 – 80% solar dumping margins and other numbers depending on whether modules, wafers or cells," the statement continued.  "The “dumping margin” is the margin by which the price on a producer’s domestic market - or analogue country market in the case of China - exceeds the price of exports to the EU.  The 'injury margin' is the margin by which the landed EU price of imports is below the EU producer price (adjusted to include full costs and a reasonable profit if not already reflected in the EU producer price)."

The International Energy Agency has predicted that solar could provide “a third of the global final energy demand after 2060”.

But despite its huge promise, solar currently provides less than 1% of energy sold globally, in part due to its variable nature and low intensity. The main reason for this has been difficulties exploiting the resource on a large scale and at a competitive price.

Solar electricity will become attractive when it falls below "grid parity," the point at which renewable energy becomes cost-competitive with conventional sources like fossil fuels. Europe is nearing this point.

Favourable regulatory regimes and rapid technological evolution in the industry helped the sector to get onto its feet quickly. But many in the industry now fear that the sudden removal of tariffs, often retroactively as seen in Spain, is damaging future growth prospects, particularly in Europe.

  • Dec. 2013: Deadline for imposition of duties on China, following the EU's investigation

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