EU Solar Industry Group Petitions for Extension of China Duties

17 September 2015

EU ProSun has asked the European Commission to hold an “expiry review” over whether to extend anti-dumping and countervailing duties currently in place on imports of Chinese-made solar products, in a move that could lead to a resurgence of tensions between Beijing and Brussels on renewable energy trade.

Should the EU executive approve the request, this would lead to a mandatory extension of the existing duties until the review is concluded. A decision on whether to launch the review is expected by early December, when the duties would otherwise be set to end.

Should an expiry review be held, this could take up to 15 months, effectively leading to an extension of duties through early 2017. These reviews must include evidence that dumping, unfair state aid, and injury to EU producers would continue if the duties were to be lifted.

Conducting an expiry review would also lead to an extension of the 2013 price undertaking deal reached between various Chinese solar producers, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, and the European Commission.

The price undertaking agreement came after a heated disagreement between Brussels and Beijing over claims that Chinese solar modules and their components were receiving unfair state aid and being sold in the EU at prices below their normal value.

The agreement effectively allows participating Chinese exporters to avoid hefty anti-dumping and countervailing duties from the EU if they agree to respect minimum import prices. These must remove the injurious effects of dumping, along with meeting other conditions. Non-participating exporters must still pay the duties that were determined by the Commission two years ago.

EU ProSun, which says it represents over a dozen manufacturers that together make up over a quarter of solar cell and module production in Europe, had also been behind the complaints that first prompted the Commission to begin its trade remedy investigations into Chinese solar exporters in 2012. (See Bridges Weekly, 12 September 2012 and 14 November 2012)

Building tensions

The deal reached in 2013 between the European Commission and participating Chinese producers had been heralded as a major breakthrough, following a bruising public debate between the two sides over several months.

Allegations over unfair practices in the trade of solar products have become increasingly frequent in recent years among major players in the industry, leading some analysts to dub them the “solar trade wars.” The disagreements between China and major trading partners such as the US and EU on the subject have been especially heated, with multiple investigations being filed on all sides regarding alleged dumping and unfair state aid.

The size of the EU solar market, as well as the level of imports from China, had raised the stakes of the Commission’s anti-dumping and countervailing duty investigations in 2013. Exports of these solar panels, wafers, and cells from China to the EU had amounted to €21 billion in 2011.

In recent months, however, some cracks have begun to emerge in the accord, with the Commission removing some Chinese producers from the price undertaking agreement on the grounds that these were not complying with the deal’s terms. (See Bridges Weekly, 16 July 2015 and 7 May 2015)

The Commission is also in the process of conducting a “partial interim review” into the benchmark used as a reference in the 2013 price undertaking agreement, along with a separate investigation into whether Chinese exporting producers are avoiding the existing duties by re-routing part of their production processes through Malaysia and Taiwan. (See Bridges Weekly, 7 May 2015)

Separate to the above-mentioned investigations, the European Commission also confirmed last month that it would be increasing anti-dumping duties on imported solar glass from China, with duties now set between 17.5 to 75.4 percent. Solar glass is used primarily, but not exclusively, in manufacturing solar panels, with the EU domestic market in this product amounting to under 200 million euros annually.

EU ProSun Glass – a separate group made up of producers representing over a quarter of the bloc’s solar glass production – had been behind the original complaint that led to the Commission’s anti-dumping and countervailing duty investigations in this area. Both types of duties had been confirmed by the EU executive in April 2014. (See Bridges Weekly, 17 April 2014)

ICTSD reporting; “PV trade dispute: EU ProSun files request for expiry review of undertaking,” PV MAGAZINE, 8 September 2015; “EU increases anti-dumping duties on Chinese solar glass,” REUTERS, 14 August 2015; “EC to cut two more Chinese producers from minimum price agreement,” PV MAGAZINE, 3 September 2015; “EU Solar-Panel Makes Seek Renewal of Tariffs on China,” BLOOMBERG, 4 September 2015.

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