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Leading NGOs and Large Number of Companies Call for End to Trade Defence Measures on Chinese Solar Panels

Five influential environmental non-governmental organisations (NGOs) including world famous Greenpeace, the World Wide Fund for Nature (WWF) and the Climate Action Network, have demanded the immediate end to trade defence measures on solar panels and cells imported from mainland China.

On 13 October 2016, the pro-environment organisations sent a strongly worded letter of protest to the European Commissioner for Trade, Cecilia Malmström, to drop the trade barriers, consisting essentially of the establishment of a minimum import price (MIP) as well as anti-dumping and anti-subsidy measures imposed against mainland China in 2013.

The NGOs have identified solar power as one of the key technologies that are necessary for the EU to meet its commitments under the by now ratified Paris Agreement on climate change, which entered into force on 4 November this year. The Paris Agreement is an internationally-driven commitment that requires EU leaders to ensure effective, consistent policies, aimed at shifting to a low-carbon economy by means of actions that boost renewable energy, such as solar power.

In view of this, the NGOs “are therefore concerned that the current tariffs on imported solar panels are making solar power more expensive and slowing down the deployment of solar power in Europe.” The letter – seemingly quite logically – indicates that the presence of trade restrictions would make the Paris Agreement’s goals, and the EU’s commitments to combat climate change, more difficult to achieve.  

The letter from the NGOs, which is hoped to have a noticeable impact on the EU Trade Commissioner (herself of Swedish origin), echoes another perhaps even more impactful industry letter. This letter, sent by signatories representing 403 companies from 28 Member States to the European Commission, likewise demands an end to the punitive trade measures on solar modules and cells imported from mainland China. 

The industry letter plainly states that the punitive tariffs “should be removed immediately. The measures are having the unforeseen consequence of negatively impacting the entire European solar value chain to the detriment of jobs, investment and solar deployment in Europe.  A policy that was designed to help the few has failed to do so, only serving to harm the very many right across the EU.” It also states that “[T]he European Commission and Member States need to end the measures now to accelerate the date by which this industry can grow sustainably without the need for support mechanisms.”

According to the letter from the solar industry, despite the global boom in solar power, Europe today holds “a worryingly small and shrinking percentage of the annual market”.

The NGOs, for their part, have alleged in their letter that the amount of jobs in this sector could be higher in the absence of the measures, especially since jobs are truly needed on the basis of prospective employment that will be lost after polluting industries shut down during the shift to a low-carbon economy.

The European companies have strongly highlighted the negative effect on actions being taken against climate change that are being caused by the trade measures. Along the same lines, the NGOs’ letter has reminded Commissioner Malmström that European Commission President Jean-Claude Juncker said he wanted Europe to be “the world number one in renewables”.

As with most controversial issues especially concerning EU industry vs. the environment, not all European stakeholders are in favour of seeing the measures come to an end. EU ProSun, which  represents PV cells and module producers, has intimated that the minimum import prices on cells and modules had not hit new installations in the EU. “Anti-dumping rules are fundamental to guarantee[ing] a fair, level playing field in the EU market. Demanding the termination of the measures is essentially like abolishing doping controls at the Olympic Games,” Milan Nitzschke, president of EU ProSun, is reported to have stated.

Along with the trade defence measures already in place, the European Commission had also opened an investigation into EU industry allegations that Chinese exporters were circumventing the trade defence measures by shipping  their products through Taiwan and Malaysia. On 11 February, the Commission extended the duties so as to cover panels and cells coming from those countries.

The measures are currently the subject of an expiry review, with a decision on whether to extend or terminate them expected in March 2017.

Content provided by Picture: HKTDC Research
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