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Solar Panels: EU Member States Back New and Reduced MIP, While Commission Removes Two Chinese Solar Producers from Price Undertaking

On 7 September 2017, the EU Member States’ trade representatives voted on the European Commission’s proposal to reduce the minimum import price (MIP) at which exporting producers from mainland China are allowed to sell their solar cells and solar panels on the EU market.

As previously reported, definitive EU trade defence measures have been imposed on solar cells and solar panels from mainland China from 6 December 2013 onwards. The measures were imposed as a combination of tariffs on the one hand (anti-dumping duties ranging from 27.3% to 64.9% and countervailing duties ranging from 0% to 11.5%), and an MIP on the other hand.

With regard to the MIP, the European Commission accepted a price undertaking, whereby certain exporting producers from mainland China agreed to sell their solar cells and solar panels to EU customers at a price at or above an MIP. In return for doing so, the anti-dumping and countervailing duties are not being levied on their imports into the EU.

While the trade defence measures on solar cells and solar panels were initially imposed for a period of two years, the EU extended the duties and MIP for a period of 18 months in March 2017. As a result, the trade defence measures are now set to expire in September 2018.

Simultaneous to the extension of the trade defence measures on solar cells and solar panels, the European Commission initiated – on its own initiative – a partial interim review investigation on 3 March 2017, which is explicitly limited to the form of the measures.

Pursuant to this partial interim review, the Commission was expected to drop the MIP for solar panels by 20% within a year, while dropping the MIP for solar cells by 10%. The Commission also proposed a gradual phasing out of the measures, including a schedule that reduces the MIP every three months.

More precisely, the Commission’s draft plans showed the EU’s intention to lower the MIP for polycrystalline modules to 41 euro cents per watt, while monocrystalline modules will be priced at 46 euro cents per watt. The prices would then drop evenly each quarter, ending up at 33 euro cents per watt for polycrystalline modules and 38 euro cents per watt for monocrystalline modules. This would mean a decrease of, respectively, 20.48 and 17.93%. In addition, the MIP would drop from almost 21 euro cents per watt for polycrystalline cells and 24 euro cents per watt for monocrystalline cells to 19 euro cents and almost 22 euro cents per watt. This would represent a decrease of, respectively, 5.8 and 10.66%. This was reported in July 2017.

The reduction of the MIP had been heavily debated over the last few months. While EU solar panel manufacturers opposed the reduction, arguing that it would kill EU jobs, EU importers argued that the reduction would not cut prices enough.

During the first weekend of September 2017, the Commission submitted revised figures to the EU Member States, which appear to be around 3 euro cents per watt lower than the initially proposed figures.

EU sources state that national trade representatives, during the vote of 7 September 2017, did not yield a majority in favour or against the plan. While many Member States abstained from voting, their votes count as positive in this procedure, leaving the Commission free to carry out is plans.

On 16 September 2017, the Commission finally published new Commission Implementing Regulation 2017/1570 in the Official Journal. The new Regulation repeals the hitherto existing price undertaking and introduces the lower MIP. It enters into force 15 days following its publication in the Official Journal.

Two days before the vote on the reduced MIP, the Commission decided to remove two more solar producers from mainland China, AE Solar and Wuxi Saijing, from the deal on the MIP. This withdrawal has been spelt out in Commission Implementing Regulation 2017/1524, which was published in the Official Journal on 6 September 2017.

The decision to remove AE Solar and Wuxi Saijing from the price undertaking was based on the Commission’s understanding that these two exporting producers had breached the terms of the MIP deal. As a result of the withdrawal of the acceptance of the undertaking, crystalline silicon photovoltaic modules and other key components from AE Solar and Wuxi Saijing are – as of 7 September 2017 – automatically subject to the definitive EU anti-dumping and countervailing duties upon importation into the EU.

Content provided by Picture: HKTDC Research
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