European Commission approves Chinese solar-panel pact4 min read . Updated: 03 Aug 2013, 10:20 PM IST
The goal is to limit Chinese competition against European manufacturers without resorting to anti-dumping duties
Brussels: The European Commission approved trade chief Karel De Gucht’s plan for curbs on Chinese solar panels, allowing import tariffs to be removed in three days in Europe’s largest dumping dispute.
The commission, the European Union’s executive arm, on Friday endorsed a negotiated settlement with China that sets a minimum price and a volume limit on EU imports of Chinese solar panels until the end of 2015. Chinese manufacturers that take part will be spared EU duties meant to counter below-cost sales, a practice known as dumping.
“This is going to stabilize the market, De Gucht," the 28-nation EU’s trade commissioner, said in a Bloomberg Television interview on Friday in Brussels. “I hope that this deal is going to give the necessary oxygen to the European companies, and also companies from other countries, to invest again in research and development so that we can develop a new generation of solar panels."
The goal is to limit Chinese competition against European manufacturers such as Solarworld AG without resorting to anti-dumping duties that some EU national governments, including in Berlin and London, oppose. The renewable-energy case covers EU imports of crystalline silicon photovoltaic modules or panels, and cells and wafers used in them—shipments valued at €21 billion in 2011.
With Chinese companies controlling 80% of the EU solar-panel market and German Chancellor Angela Merkel leading warnings about punitive levies to boost import prices, De Gucht announced a settlement with China on 27 July after weeks of what he called intensive talks. He didn’t disclose the minimum price and volume limit in the agreement, which then had to be approved by the full commission.
In early June, the commission introduced provisional anti-dumping duties as high as 67.9% on Chinese solar panels as part of a probe begun in September. The commission decided to apply an initial lower rate of 11.8% for two months to encourage the government in Beijing to negotiate a solution.
As of 6 August, without the accord, the provisional levies applied would have ranged from 37.3% to 67.9%, depending on the company. The import taxes target more than 100 Chinese companies including Yingli Energy (China) Co., Wuxi Suntech Power Co. and Changzhou Trina Solar Energy Co.
Those three manufacturers are among the Chinese companies taking part in the agreement, according to a list published by the commission on Saturday in the EU Official Journal. Other participating producers include Jiangsu Aide Solar Energy Technology Co., Delsolar (Wujiang) Ltd., ERA Solar Co., Jiangsu Green Power PV Co. and Konca Solar Cell Co., according to the list of more than 90 companies.
The agreement fixes a minimum price of 56 euro cents a watt for annual imports from China of as much as 7 gigawatts, a trade official in Europe said last week when the commission announced that a deal had been reached. The pact covers Chinese exporters that have about 60% of the EU solar-panel market, according to the official, who spoke on the condition of anonymity.
EU ProSun, which represents around 40 European solar-panel producers including Solarworld of Germany, has called the accord unacceptable and vowed to file a lawsuit.
The group, which lodged the complaint against China that led to the commission’s dumping investigation, said on 27 July that the agreed minimum price matches that at which Chinese exporters are selling solar panels in the EU.
Without disclosing the agreed minimum price, De Gucht said on Friday that the South Korean industry sold panels at exactly the floor agreed with China while not engaging in dumping. He also said a price floor of around 80 euro cents a watt sought by EU ProSun wasn’t ever entertained during the negotiations with China.
“We have never been discussing about the level of prices that, for example, the complainants now say they would need to be competitive," De Gucht said. “If that is the case, then they will never be competitive again."
EU governments, acting on a commission proposal, have until 6 December to decide whether to accept the agreement as a definitive measure. While definitive EU anti-dumping measures usually last five years, De Gucht said the pace of change in the solar-panel market justifies the shorter period of protection that he negotiated.
“An intervention in the market should not last too long, the more so that we are in a sector that is very quickly changing," he said. “Nobody has a clear idea of what will be the situation in the solar-panel market within five years."
De Gucht expressed optimism that EU governments will approve the negotiated package later this year, saying “a very large majority" signalled support during consultations in the run-up to the commission decision.
The EU is also threatening to impose a separate set of duties on Chinese solar panels to counter alleged subsidies. That’s the focus of a second investigation in which the deadline for introducing any provisional anti-subsidy duties is 8 August and for imposing any definitive measures is early December. BLOOMBERG