EU Launches Anti-Dumping Investigation into Solar Panel Imports from ChinaSeptember 05, 2012 by Jeff Shepard
The European Commission launched an investigation on Thursday into suspected dumping of solar panels concerning imports into the European Union (EU) of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers), originating in China by Chinese producers, drawing a warning from China that restrictions on its exports would hurt the global clean energy sector. China's solar firms warned in July of a trade war, calling on their government to strike back against the impending investigation.
EU ProSun Applauds Launch of EU Investigation
Milan Nitzschke, President of EU ProSun, the Sustainable Solar Energy Initiative for Europe, said, "The European Commission took a big step today to save Europe's green tech sector and broader manufacturing base. Chinese companies are selling solar products in Europe far below their cost of production, with a dumping margin of 60 % to 80%. This means that Chinese solar companies are making enormous losses, but are not bankrupt because they are bankrolled by the state. Such practices have led to over 20 major European solar manufacturers going out of business already in 2012 alone. If China destroys the EU solar industry where labour accounts for less than 10% of production costs, then virtually all European manufacturing sectors and jobs are under threat."
Today the European Commission announced that it will investigate China's unfair trade practices, following EU ProSun's submission of July 24th. EU ProSun represents the majority of EU solar industrial production. The sun is an unlimited, free source of energy that is available worldwide. McKinsey forecasts global annual installations of solar PV could increase 50-fold by 2020 compared with 2005. Hence, there is intense competition amongst solar manufacturers which China is winning through subsidies and dumping.
"Solar energy is a critical component of the EU's renewable energy mix and has a sunny future. The EU must stand up to China's unfair competition and threats of retaliation to save Europe's growth industries for the future such as green technology and solar manufacturing," said Nitzschke.
China formulated an aggressive strategy in its 5-year plan to take over the global solar market, and from virtually zero share in 2004 has captured over 80% of the EU market today. Chinese solar companies recently found guilty by the US government of dumping there, are taking over the EU market with the same unfair trade practices. The US Department of Energy found the same Chinese companies exporting to the EU have received more than 25 billion Euros of illegal government subsidies including low interest loans, free land, and subsidised energy.
With technological advances, the costs of producing solar panels has come down substantially, but prices in the last three years have come down much faster due to the dumping of subsidised Chinese production. Costs and prices should continue to decline steadily as this technology continues to develop. Hence, demand for solar systems and local installation jobs will not decrease if anti-dumping measures are imposed on unfairly traded imports from China. Trade measures would only restore fair competition with China, and prevent a monopoly over solar manufacturing that would be bad for European consumers, jobs, installers and industry.
Nitzschke concluded, "EU ProSun calls on the EU to impose anti-dumping duties to restore fair competition and create a level playing field with China as soon as possible. If the EU acts quickly, we have a chance to maintain a sustainable solar manufacturing base in Europe."
'Unfair' say Chinese manufacturers
Trina Solar is one of the China-based suppliers of these products to the EU. Trina Solar believes the allegations made by Germany's Solarworld AG and other, thus far anonymous, petitioners of the so-called EU ProSun group will eventually prove to be unfounded, and that Trina Solar's transactions with its EU customers were and are made in accordance with international fair trade practices. These allegations threaten the ability of EU consumers to receive the benefits of clean and innovative solar energy products at a fairly-traded, market-competitive price. Trina plans to contest the allegations vigorously.
"Trina Solar products are neither dumped nor subsidized. They are produced, and sold competitively on the European market. We believe the trade investigation will reveal that Trina Solar competes fairly with its competitors in the European Union," said Chairman and CEO, Jifan Gao.
"We are cooperating with the European Commission to ensure it receives all required information to arrive at a balanced and fair conclusion. Additionally, we welcome Chancellor Merkel's constructive approach to a dialogue and are ready to participate in any dialogue which may be initiated," said Ben Hill, President of Trina Solar Europe.
Trina Solar remains dedicated to bringing the sustainable benefits of clean and innovative solar energy products and services to residential, commercial and utility scale customers worldwide.
Yingli Green Energy Holding Company Limited, a leading solar energy company and one of the world's largest vertically integrated photovoltaic (PV) manufacturers, which markets its products under the brand "Yingli Solar" states that the anti-dumping complaint filed at the European Commission in July this year is unfounded. In August 2012, Yingli Green Energy reached a balanced vertically integrated production capacity of 2,450 MW per year, which located in Baoding, Haikou, Tianjin and Hengshui, respectively. Yingli Green Energy distributes its photovoltaic modules to a wide range of markets, including Germany, Spain, Italy, Greece, France, South Korea, China and the United States. Headquartered in Baoding, China, Yingli Green Energy has more than 20 subsidiaries and branch offices worldwide.
"We will closely cooperate with the European Commission in order to prove that the conditions for the imposition of punitive tariffs are not fulfilled. Regardless of misleading claims, we remain focused on producing competitive, high-quality products based on our investments in research and development. As a NYSE-listed company with a worldwide presence, we constantly meet the highest standards of international trade practices. We are fully transparent with our funding sources and cost structure," said Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy.
"The solar industry is based on a global and complex value chain, and will be therefore substantially and negatively affected by trade protectionism. There would be no winners but rather immeasurable damage and regression from our fundamental goal of making solar a cost-effective energy source available to everyone. In addition, such actions would significantly delay the onset of a sustainable solar electricity market free of government support," said Darren Thompson, Managing Director of Yingli Green Energy Europe GmbH.
Open markets and increased competition have made solar energy in the EU affordable, contributing to a balanced European energy mix and the achievement of the ambitious EU 2020 climate change targets. Today, the price for solar energy is already competitive with more carbon-intensive energy sources in some areas in Europe. A misguided trade war could undermine years of solar industry progress, investment and innovation.