Home >news >world >EU hits China with solar-panel duties in biggest dumping row

Brussels: The European Union imposed tariffs as high as 67.9% on solar panels from China in the largest EU commercial dispute of its kind, seeking to help revive a withering industry in Europe.

The duties are to punish Chinese manufacturers of solar panels for allegedly selling them in the 27-nation EU below cost, a practice known as dumping.

EU producers including Solarworld AG, Germany’s No. 1 maker of the renewable-energy technology, have suffered “significant harm" as a result of dumped imports from China, the European Commission, the bloc’s trade authority in Brussels, said in a statement on Tuesday. The commission said 25,000 jobs in EU solar-production would likely be lost without the import taxes.

“Our action today is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping," European trade commissioner Karel De Gucht told reporters. The levies, due to be published on Wednesday in the EU’s official journal and to take effect 6 June at an initial lower rate of 11.8%, will be for six months and may be prolonged for five years.

The trade protection covers EU imports of crystalline silicon photovoltaic panels, and cells and wafers used in them—shipments valued at €21 billion ($27.5 billion) in 2011. European companies including Solarworld have demanded punitive levies to counter growing competition from China following similar US trade protection.

Broader Crackdown

The case highlights EU concerns about the expansion of Chinese solar companies, which have grabbed market share from European rivals that were once dominant, and underpins a broader crackdown by Europe on perceived unfair low pricing by China’s exporters. The dispute also spotlights tensions within Europe between high-tech manufacturers and consumers and between policies to bolster production and to spur clean-energy use.

In Europe, which accounts for about three-quarters of the global photovoltaic market, more than two dozen manufacturers have sought protection from creditors since 2010 and many have shifted production to lower-cost factories in Asia. Germany’s Q- Cells SE, which was acquired last year by South Korea’s Hanwha Group, has its largest factory in Malaysia.

Solarworld rose as much as 15% on Tuesday in Frankfurt, to €79 cents, the steepest intraday gain since 21 March. Shares gained 12% as of 4:07 pm local time.

‘Concrete Measures’

“We are relieved that the European Commission finally introduced concrete measures," EU ProSun, a group that represents European producers including Solarworld, said in a statement on Tuesday. “Dumping is fraud and harms the future of solar energy."

The duties are the preliminary outcome of a dumping inquiry that the commission opened in September and that German Chancellor Angela Merkel said last month shouldn’t lead to permanent levies against China. EU governments, acting on a commission proposal, have until 6 December to decide whether to turn the provisional duties into “definitive" five-year measures.

De Gucht held out the possibility of negotiating a settlement with China in which Chinese exporters would boost prices in return for an eventual end to the levies. He said the initially lower duty rate of 11.8%, which will last for two months, is an incentive for the government in Beijing to sit down for talks.

Provisional Levies

After 6 August, unless an accord is reached, the provisional levies will range from 37.2% to 67.9%, depending on the Chinese company. Those duties would average 47.6%, according to the commission.

“This staggered approach allows a smooth transition for our markets to adapt and it is a one-time offer to the Chinese side, providing a very clear incentive to negotiate," De Gucht said. “It provides a clear window of opportunity for negotiations, but the ball is now in China’s court."

The Chinese government, a group of EU nations including the UK and solar-project developers and installers have fought to prevent anti-dumping protection. Opponents warn about higher prices, depressed demand and more lost jobs in Europe than would be gained in the European solar-panel manufacturing industry.

“We call on both parties to come to an agreement within the next two months that avoids price increases," the Alliance for Affordable Solar Energy, a group opposed to EU anti-dumping duties, said in a statement. “The current market development leaves no room for prices increases."

Photovoltaic Systems

Overall, the provisional anti-dumping duties are likely to increase capital expenditure for ground-mounted photovoltaic systems in Europe by about 5%, Jenny Chase, Zurich-based chief solar analyst for Bloomberg New Energy Finance, said by e- mail.

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 anti-subsidy measures is early December. Bloomberg

Stefan Nicola in Berlin and Marc Roca in London contributed to this story.

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