EU agrees China solar panel duties in boldest move yet

BRUSSELS Wed May 8, 2013 11:27am EDT

The European flag flies outside of the La Canada shopping centre in Marbella, southern Spain January 23, 2013. REUTERS/Jon Nazca

The European flag flies outside of the La Canada shopping centre in Marbella, southern Spain January 23, 2013.

Credit: Reuters/Jon Nazca

Related Topics

BRUSSELS (Reuters) - The European Commission agreed on Wednesday to impose punitive import duties on solar panels from China in a move to guard against what it sees as Chinese dumping of cheap goods in Europe.

EU commissioners backed EU Trade Chief Karel De Gucht's proposal to levy the provisional duties by June 6 and make Chinese solar exports less attractive in Europe, two officials said.

Shares in German manufacturers SolarWorld, Phoenix Solar and Centrotherm rose as much as 7 percent on the decision, while Frankfurt-listed shares in China's Suntech were down more than 4 percent.

The investigation into accusations of dumping is the biggest the commission has launched but Brussels is trying to tread a careful path, knowing it needs China, the EU's second largest trading partner, to help the bloc pull out from recession.

China's ambassador to the World Trade Organisation, Yi Xiaozhun, called the decision a mistake although he declined to comment on any possible retaliation by Beijing.

"It will send the wrong message to the world that protectionism is coming," Yi told Reuters in Geneva.

Given that Germany and France are seeking to increase exports to China, De Gucht will try for a negotiated solution with new Chinese Commerce Minister Gao Hucheng before an EU deadline in December to cement the levies for up to five years.

That could mean agreeing a minimum price at which all solar panels makers selling in Europe adhere to, diplomats said.

The EU duties, which will come into effect once the Commission publishes the decision in its Official Journal, will be set at an average of 47 percent, officials said.

Trade specialists from all 27 EU countries will be consulted on May 15 at a meeting in Brussels and are expected to back the decision, although their position is non-binding.

The European Commission declined to comment.

Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand. EU producers say Chinese companies have captured more than 80 percent of the European market from almost zero a few years ago, exporting 21 billion euros ($27 billion) to the European Union in 2011.

As a result, Chinese-made panels are as much as 45 percent cheaper than those made in Europe, industry executives say.

Europe accounted for half of the global market in 2012, which was worth $77 billion, according to research firm IHS.

"POISONOUS" DUTIES

The commission started its investigation in September, taking up a complaint by a group of mainly German and Italian companies led by SolarWorld, which was once Germany's biggest solar group but now has 900 million euros in liabilities. Its smaller rival Q-Cells filed for insolvency last year.

The United States levied its own duties on Chinese solar energy products in 2012, arguing that China's rapid expansion into the industry has created a massive oversupply.

Solar is the leading source of renewable energy after hydro and wind, and companies are in a race to win contracts as countries seek to limit pollution and global warming.

Germany was the world's biggest market last year, followed by China, Italy and the United States, according to the European Photovoltaic Industry Association. Germany installed more solar panels than any other country in 2012, at 7.6 gigawatts of newly connected systems, while China was second with 5 gigawatts.

Solar covers about 3 percent of Europe's electricity demands but government support for developing the green energy source varies widely across Europe with the euro zone debt crisis dampening government support in Spain and Greece.

Europe's stance on solar energy is complicated by the fact that some in the EU solar sector, notably importers and installers, support cheap panel imports from China.

They say EU tariffs would be damaging for efforts to develop clean energy. Some fear retaliation by Beijing.

"Protective duties are poisonous for the solar industry," said Udo Mohrstedt, chief executive of Germany's IBC Solar. "These guarding measures will endanger more than 70,000 jobs in medium-sized companies in Germany alone," he said.

(Additional reporting by Christoph Steitz in Frankfurt and Tom Miles in Geneva; editing by Mike Collett-White)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (6)
Anthony689 wrote:
So the americans and now the eu who cannot manufacture pv modules at a per watt cost comparible to the chineese want more punitve measures. Im so disgusted right now that americans and eu members feel there competitive disadvantage gives them the right to propose the criminal terrifs and destroy an industry in china that is the main reason why renewables are approaching parity with convential dirty energy like buring coal to produce steam. Fuck solarworld how about better management? everyone is blasting suntech but why do we need to bend over backwords for a company that is not competitive. Free trade is the answer and I hope the asians say enough is enough

May 08, 2013 10:13am EDT  --  Report as abuse
Anthony689 wrote:
So the americans and now the eu who cannot manufacture pv modules at a per watt cost comparible to the chineese want more punitve measures. Im so disgusted right now that people feel there competitive disadvantage gives them the right to propose the criminal terrifs and destroy an industry in china that is the main reason why renewables are approaching parity with convential dirty energy like buring coal to produce steam. Solarworld is not price competitive how about their management works on creating a supply chain that is price competitive. everyone is blasting suntech and shi but why do we need to bend over backwords for a company like solarword that is not competitive. Free trade is the answer and I hope the asians say enough is enough

May 08, 2013 10:16am EDT  --  Report as abuse
Pterosaur wrote:
Everyone knew from the beginning that solar power needed government subsidies to kick start and we all agreed that the subsidies are meant good to the environment. Now that the EU and the US use the subsidies as the reason for trade war, it only proves that the US and the EU companies failed despite heavy subsidies from their domestic government.

Fair competition only guarantees the best to the consumers. It does not guarantee the survival of companies with bad management.

May 08, 2013 3:10pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Track China's Leaders