UPDATE 2-European solar firms file second China complaint
* Complaint focuses on suspected Chinese export subsidies
* Chinese firms have more than 80 pct of Europe solar mkt-EU ProSun
* SolarWorld shares close up 2 percent
FRANKFURT/BRUSSELS, Sept 25 (Reuters) - A group of 25 European solar panel companies filed a complaint with the European Commission on Tuesday, claiming Chinese rivals were unfairly benefiting from illegal subsidies and adding to an earlier complaint against Chinese competitors.
The European Union's executive body launched an investigation this month after the EU ProSun group accused Chinese rivals of "dumping", or deliberately selling products for less abroad than at home.
The group, led by Germany's SolarWorld, said on Tuesday subsidies from the Beijing government made available only to local firms had stimulated production there to more than 20 times Chinese consumption and close to double global demand.
"Most Chinese solar companies would have gone bankrupt a long time ago if not for endless government subsidies. Meanwhile over 20 major European solar manufacturers have become insolvent in 2012 alone," EU ProSun said in a statement.
The group said Chinese solar panel makers benefited from very low interest rates thanks to government policy, and if loans could not be paid back they might be written off, extended indefinitely or paid off by government-controlled entities.
Chinese producers include Yingli Green Energy, Suntech Power Holdings Co Ltd and Trina Solar Ltd .
EU ProSun added that China had reached a market share of more than 80 percent in Europe with the help of export subsidies while a string of European solar companies, including former bellwether Q-Cells, had filed for insolvency.
Europe is still the most important market for solar products, accounting for 74 percent of global installations in 2011, according to industry association EPIA.
In 2011, 57 percent of all solar cells were produced in China, with Taiwan a distant second at 11 percent, data by industry publication Photon showed. At close to 7 percent, Germany - the world's largest solar market by total installations - comes third.
Western solar firms have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper pricing.
Chinese companies sold about 21 billion euros ($27.1 billion) in solar panels and components to the EU in 2011 - about 60 percent of all Chinese exports of the product and some 7 percent of all Chinese exports to the EU.
The EU imported goods from China worth a total of 292 billion euros last year. Imports of Chinese products subject to trade defence duties total less than one percent of that amount.
The United States imposed anti-dumping duties mostly of 31 percent on Chinese solar panel producers in May.
The Commission's investigation into suspected dumping makes solar panels by far the biggest import sector ever targeted.
While anti-dumping investigations and duties are relatively common, those concerning subsidies are not, because proving a 'financial benefit' from a government or public body can be harder and because anti-subsidy duties are typically lower.
Politically, subsidies are more sensitive because the investigation targets a country rather than just its industry.
The Commission has 45 days to decide whether or not to launch an investigation. Assuming it does, it can impose provisional duties within nine months.
EU member states have within 13 months of the investigation's launch to impose definitive duties for up to five years.
The Commission declined to comment.
SolarWorld shares closed up 2 percent.
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