The European Commission has initiated an anti-dumping investigation into the import of Chinese solar panels and key components such as solar cells and solar wafers, a Commission statement said on Thursday (6 September).
Beijing voiced "deep regret" at the move and warned that restrictions on its solar exports could imperil the global clean energy sector.
"Restricting China's solar panel products will not only hurt the interests of both Chinese and European industry, it will also wreck the healthy development of the global solar and clean energy sector," said Shen Danyang, a Chinese Commerce Ministry spokesman.
He added that “friction” between the EU and China should be resolved through “consultations and cooperation".
The investigation into one of the biggest import sectors ever targeted by the Commission stems from a complaint by a group of European solar companies, led by Germany’s SolarWorld.
The group, comprising members in Germany, Italy, Spain and other EU countries, says Chinese solar firms have been selling panels below their market value in Europe.
SolarWorld representatives first warned of an impending European suit in an interview with EURACTIV in October 2011. The following Spring, the company began forming a European coalition modelled on its successful US lobby group.
In March, the head of the EU trade commissioner Karel De Gucht's cabinet, Marc Vanheukelen, gave the alliance hope with a drum-banging speech in Brussels.
“We should use all the tools we have at our disposal to tackle barriers that distort the market,” he said, with reference to China's solar panel exports. “We may take to court countries that we don’t think are playing fairly,” he added.
Just weeks later, the US imposed duties on solar panel imports from China.
Trade war fears
China's solar firms warned in July of a trade war, calling on their government to strike back against the impending investigation.
Chinese producers include Yingli Green Energy, Suntech Power Holdings Co Ltd, Trina Solar Ltd and Canadian Solar Inc.
The Chinese solar industry expanded rapidly on the back of profitable exports to Europe but is now struggling with severe overcapacity as export markets have shrivelled and domestic demand remains insufficient.
About 60% of China’s exports of solar panels and components – with a value of €21 billion – went to the EU in 2011.
Overall, the EU imported €292 billion of goods from China last year, of which less than 1% was subjected to trade defence duties.
Brussels will now examine whether dumping is taking place, whether it is damaging EU industry and whether duties would harm the EU's economic interests.
Some Western solar firms have been at odds with their Chinese counterparts for years, alleging that they receive lavish credit lines from their government to offer modules at cheaper pricing.
German solar company Q-Cells became the most prominent EU victim of an increasingly competitive market, filing for insolvency in April.
But Europe’s solar industry is divide on wisdom of anti-dumping measures against China, with the European Photovoltaic Industry Association (EPIA) lauding Chinese imports for lowering the price of solar energy, and helping the EU meet its 2020 renewable energy targets.
“Without global competition and cheap Chinese PV modules, we wouldn’t be as close to grid parity as we are today,” Reinhold Buttgereit, EPIA’s secretary-general told EURACTIV in April, refering to the point where renewables become cost-competitive with fossil fuels.
The Commission will now send questionnaires to the Chinese exporters as well as to EU producers and importers and make a recommendation to EU members. They have within 15 months of the opening of the investigation to impose any duties, which are generally in place five years.