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European Trade Groups Call for End to Duties on Solar Panels

On 5 July 2016, 34 solar and renewable energy organisations sent a letter to the European Commissioner for Trade, Cecilia Malmström. These organisations are calling upon Ms. Malmström to end trade barriers against Chinese-origin solar panels and cells.

Since December 2013, the European Commission has enforced strict anti-dumping and countervailing measures, including minimum import prices, on select solar power equipment manufactured in mainland China. The Commission is undertaking an expiry review of the measures and is expected to make a recommendation on whether to continue the measures, subject to Member State approval, in early 2017. Should the Commission find that revoking the measures could lead to a continuation or recurrence of injury and dumping/subsidisation, the trade defence measures can be extended for a new period of up to five years.

As traders will recall, the Commission had previously declined overtures to change the price index with which to base the minimum import price and defeated a challenge in the EU General Court against the price undertaking. The distinguishing feature of this new letter, dated 5 July 2016, is the scope of the membership claimed by SolarPower Europe, the creators of the letter.

SolarPower Europe, and its co-signatories, claim to represent a total of 1.3 million jobs in 20 different EU countries. James Watson, SolarPower Europe CEO, said it was important to show the Commission the wider impact of the measures. “We want to express to them how united the European solar industry is against these measures,” Watson is quoted as saying, “98% of the European industry supports our position.”

The essence of the argument, outlined in the letter, is that the current trade restrictions are making solar energy more expensive in Europe. This is having the unintended consequence of affecting the entire value chain. The impact is particularly pronounced with regard to the competitiveness of solar energy generation and the consequential prolonging of financial support from European governments.

Additionally, the letter points out that hindering the competitiveness of solar energy is contrary to the goal of the EU to combat climate change and reduce carbon emissions. “European jobs, GVA [gross value added], climate change policy, consumer interests and manufacturing interests are all being undermined by the trade defence measures,” reads the letter. The letter calls for the immediate end to the trade barriers that exist.

We need a better, more specific approach to support module producers in Europe, trade measures are a blunt instrument harming more than 80% of solar manufacturing jobs and all downstream jobs in Europe today,” continued Watson. “The Commission needs to develop a new way forward for solar without trade duties and price mechanisms.

Despite the large number of organisations signed up with SolarPower, the position is not universal. The initial complaint against Chinese solar firms was brought by EU ProSun, a Solar World backed initiative also representing European solar manufacturers.  Milan Nitzschke, president of EU ProSun and vice president of Solar World has released statements questioning the legitimacy of Watson’s letter: “Just because these associations exist and claim they are representing everybody doesn’t mean they do”. In regards to industry support for the letter’s content, Nitzschke went on to say: “Huge importers yes, installers, no.”

Despite the impending date of the recommendation, the Commission has not softened its enforcement of solar panel trade measures. On 29 June 2016, the European Commission withdrew Chinese solar panel manufacturer Shinetime China and its related company in the EU, Shinetime Europe, from the EU-mainland China price undertaking. The grounds for the Commission’s actions was evidence of Shinetime circumventing the minimum import price agreement.

Some Chinese manufacturers, however, remain optimistic. With the British referendum to leave the European Union, Qian Jian, senior vice president at Jinko Solar, sees it as an opportunity for such restrictions to be lifted in the UK. In any event, it is unlikely that the European Commission will make any conclusions prior to their March 2017 deadline.

Content provided by Picture: HKTDC Research
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