April 27, 2013 / 2:21 PM / 5 years ago

European Commission launches Chinese solar glass subsidy inquiry

* Move follows complaint from industry association EU ProSun

* Inquiries can take 13 months, duties can be imposed sooner

* EU firms say have been forced to smash some of their glass

BRUSSELS, April 27 (Reuters) - The European Commission launched an investigation on Saturday into industry claims that Chinese makers of solar glass benefit from illegal subsidies, notching up another case against its No. 2 trading partner.

The inquiry follows a complaint from trade body EU ProSun Glass, which says Chinese glass sold in the European Union at below-cost prices is damaging the bloc’s solar glass industry.

The market, valued at less than 200 million euros ($260.54 million), is tiny compared with overall EU imports from China, which totalled 293 billion euros in 2011, according to Commission figures, making it China’s main trading partner.

The bloc is also investigating its largest trade case to date into alleged dumping of and subsidies for 21 billion euros per year of solar panels and other components that China exports to the European Union. China has warned it will retaliate.

In a statement, the Commission, the EU executive, said the latest subsidy inquiry was “a standalone investigation” with no direct link to the solar panel inquiry and could take up to 13 months, although the 27-member bloc could impose anti-subsidy duties within nine months if it decides they are needed.

The solar industry, dominated by German manufacturers such as SolarWorld, says it cannot compete when China is producing more components than entire world demand.

EU ProSun Glass has said Chinese peers have a manufacturing capacity of 400 million square metres, double total global demand, and that the EU industry has been forced to smash some of the glass it produces. ($1 = 0.7676 euros) (Reporting by Robin Emmott, Philip Blenkinsop and Barbara Lewis; Editing by Louise Ireland)

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