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EU Declines Request to Change Minimum Price Methodology for Solar Panel Imports

Hong Kong and mainland Chinese traders may like to be alerted to the latest developments in the “solar panels trade war”. The European Commission has declined a request, made by an influential trade body, to alter the methodology currently being used to calculate the lowest price that Chinese solar panel manufacturers can use before trade defence tariffs apply; and twenty-one solar panel associations are putting pressure on the Commission to end trade defence measures on Chinese solar imports.

Traders may like to know that the European Commission was requested by the EU solar panels association, EU ProSun, to revise the methodology that is being used to calculate the minimum price that Chinese solar panel manufacturers can use before tariffs apply. The Commission’s method is to take the Bloomberg index of solar panel prices and to modify it quarterly in order to adjust it to price fluctuations.

EU ProSun has reportedly argued that another Bloomberg index, which excludes Chinese solar panel prices, should be used. According to the solar panel association, the price of Chinese solar panels are allegedly lower than other solar panel prices and therefore result in distortions of the global value.

Despite this allegation the Commission has, it was reported on 2 October 2015, come to the conclusion that it is not necessary to change the price index that is currently used.

As traders may recall, on 5 December 2013, definitive anti-dumping and countervailing duties were imposed by two EU Regulations on solar panel imports from mainland China. Alongside these Regulations, the Commission also adopted a Decision confirming the acceptance of a minimum price undertaking which provides that those duties do not apply to companies respecting a minimum price.

In principle, the duties are set to expire on 7 December 2015. However, EU producers are entitled to submit a request to the Commission to initiate an expiry review investigation. A request for such a review should demonstrate that the expiry of the measures would likely lead to the continuation of dumping/subsidies and injury. It has been reported that such request has been lodged.

According to press reports, the Commission is currently examining if the initiation of an expiry investigation would be justified. A decision on whether to start the review is expected before 7 December 2015.

During the expiry review, which could take up to 15 months, the duties imposed would continue to apply. If, following the review, the Commission concludes that expiry of the measures may lead to a continuation of dumping and/or subsidisation and resulting material injury, the measures could be extended for an additional period.

It has been reported that 21 solar associations, said to represent more than 80% of the EU solar panels sector, namely, SolarPower Europe and national associations from Germany, Italy, Poland, the UK, Portugal, Greece, Belgium, Bulgaria, Cyprus, Malta, Ireland, Croatia, Romania, the Czech Republic, Latvia, Slovakia, Denmark, Sweden, Hungary, and Slovenia, have addressed a letter to the EU’s trade chief, Cecilia Malmström. By means of the letter, dated 18 September 2015, they have requested the Commission to put an end to trade defence measures on Chinese solar panel imports.

The associations have also demanded an end to the minimum price undertaking, which is in place as a result of the measures.

The twenty-one associations apparently argue that the adoption of trade defence remedies against solar panels from mainland China has slowed down the installation of solar technology in the EU. According to the associations, the elimination of the measures will enhance the value-added chain of the EU’s solar industry. 

Ms. Malmström has not so far publicly responded to the request, and may decide to await her team’s decision on whether an expiry review ought to be conducted or not.

Content provided by Picture: HKTDC Research
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