Proposed EU Agreement On Chinese PV Imports Announced, Criticized

SI Staff
Written by Michael Puttre
on July 29, 2013 No Comments
Categories : Policy Watch

European Union (EU) Trade Commissioner Karel De Gucht has announced he has reached a deal with the Chinese Chamber of Commerce over anti-dumping duties imposed on China-sourced solar panels to the enthusiastic reception of practically no one.

‘After weeks of intensive talks, I can announce today that I am satisfied with the offer of a price undertaking submitted by China's solar panel exporters, as foreseen by the EU's trade defense legislation," De Gucht says in a statement." This is the amicable solution that both the EU and China were looking for."

The deal shelves duties for what are termed"price undertakings." According to the EU, price undertakings are an alternative form of trade-defense measures allowable under its laws and those of the World Trade Organization, where a duty on imports is replaced by a mechanism based on a minimum import price. The EU says exports from Chinese companies participating in the price undertaking would be subject to its mechanism and would be exempt from the anti-dumping duties. Those companies that do not participate would be subject to the duties as previously scheduled.

The exact terms of the price undertaking were officially withheld pending adoption by the European Commission (EC), which is expected Aug. 2. However, by definition they must remove the effects of injurious dumping. The U.K.-based Solar Trade Association (STA) reports that the agreed minimum price is expected to be EUR 0.56 per watt. Market research firm IHS reported prices for Chinese PV panels in Europe as EUR 0.52 per watt in May.

Despite the characterization of the agreement as ‘amicable’ and ‘equitable,’ parties on both sides of the tariff debate were swift to voice their opposition.

EU ProSun, a European solar manufacturing association that supports the tariff regime, has moved to file a lawsuit in the EU General Court in Luxembourg to stop the agreement before the EC has a chance to enact it.

‘The agreement between the European Commission and China is contrary in every respect to European law," says EU ProSun President Milan Nitzschke in a statement. ‘The agreement endangers the very existence of the European solar industry, which has already lost 15,000 jobs due to Chinese dumping and illegal Chinese state subsidies, and now is at risk of losing remaining producers in Europe.’

On the other hand, the Alliance for Affordable Solar Energy (AFASE), a trade association of installers and project developers opposed to import duties on Chinese solar panels, objects to the proposed agreement because the price undertakings would still increase prices.

‘We don't want a price increase as this will contract demand in Europe,’ says Denis Gieselaar, CEO of Oskomera Solar Power Solutions and board member of the AFASE. ‘An agreement based on unreasonable minimum prices would be a complete lose-lose situation, including for European manufacturers, at a time when Europe is so desperately looking to stimulate green jobs creation.’

The U.K.'s STA, which has also opposed tariffs, says it is concerned about the impact of mandatory pricing on solar installations. According to the STA, the proposed import deal would include a cap on the volume of solar imported from China at 7 GW per year. Since the European solar market was approximately 17 GW in 2012, the STA is concerned that Chinese market share under the proposed agreement would satisfy less than half the EU market.

‘We urge the U.K. government to amend this proposal by calling for a shorter duration for this deal, fluctuating or lower minimum prices, and allowing for volume growth and cost reductions,’ says STA PV Specialist Ray Noble in a statement. ‘Otherwise, the U.K. policy framework will be increasingly out of kilter with real-world costs. In these circumstances, we need the U.K. government to adjust its solar support framework.

For his part, the EC's De Gucht maintains his organization has reached an equitable deal with Chinese PV exporters.

‘I have heard some voices arguing that we have given in to China and that this agreement will destroy the European solar panel industry. I disagree,’ De Gucht says. ‘I believe that this solution will remove the injury for European industry. It is equivalent to imposing provisional duties for all Chinese exporters. The effect will be that the European industry will have the space to regain its previously held market share.’

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