By Karl-Erik Stromsta, London & Dominique Patton, Singapore
Thursday, November 08 2012
Updated: Sunday, November 25 2012
The European Commission (EC) has today formally taken up an anti-subsidy investigation into PV wafers, cells and modules made in China, following its launch of a separate anti-dumping inquiry in September.
News of yet another front in the multiplying global trade dispute over solar equipment came as analysts weighed the impact of the final word from the US International Trade Commission (ITC) on America’s tariffs on Chinese PV exports.
In terms of the overall value of the imports in question, today’s move by Brussels is the largest anti-subsidy complaint the European Commission has looked at to date, with €21bn ($26.8bn) of Chinese PV products sold into the EU last year.
EU ProSun, the SolarWorld-led group of European PV manufacturers that is also behind the anti-dumping case, lodged the anti-subsidy complaint on 26 September.
The EC is legally obliged to open an anti-subsidy investigation once it receives a “valid” complaint from an industry with evidence that an imported product is being subsidised in its home country.
However, experts believe the trade complaints stand a weaker chance in Europe than in the US, where provisional countervailing and anti-dumping duties were upheld and will be kept in place for five years.
Unlike in the US, the EC must take into account the broader economic impact of imposing trade duties – the so-called “Union interest test”, which looks at whether the imposition of measures would be more costly to the EU economy than the benefit of the measures would be to the complainants.
Anti-China trade duties are fiercely opposed by players at the extreme up- and downstream ends of the PV value chain, such as polysilicon producers and system installers.
The EC says that EU ProSun has provided “sufficient” evidence of “possible” subsidies in China, and a link between those subsidies and financial harm to Europe’s PV manufacturing sector.
The EC will now send out questionnaires to relevant parties, from the Chinese government to European solar companies, to collect more information.
Within nine months it will issue a provisional ruling, and if it rules in favour of EU ProSun, it would then spend an additional four-month period studying the issue before a final judgment is rendered.
“Following the mountain of evidence from the US investigation that China is guilty of granting massive illegal subsidies, we are confident that the EU will quickly impose substantial countervailing duties of its own,” says EU ProSun president Milan Nitzschke, who also works for SolarWorld.
EU ProSun has not revealed the names of its other members, claiming that they could face retaliation in the market if their identities were disclosed.
The EC move came as the industry in China reacted to the US ITC’s decision to approve government tariffs, which had also been prompted by SolarWorld.
Analysts say the decision was a “slight positive” for Chinese panel makers because it did not implement retroactive duties.
“This will free up a little cash that the companies set aside back in the first quarter,” says Charles Yonts, head of renewable energy at CLSA.
However, he adds that this is “nowhere near enough to offset the impact of the price collapse in the second and third quarters.
“Rather than shuffling deck chairs on the Titanic, the solar sector is engaging in a full-blown punch-up on a sinking ship, driven by bad politics and protectionism,” adds Yonts.
Robert Petrina, managing director of manufacturer Yingli’s Americas unit, says: "We are relieved that this ruling marks the end of the US trade investigations, and that we will be able to completely focus on serving our hard-working customers.
“This industry has grown tremendously over the past year, despite SolarWorld's accusations, and we are grateful to the overwhelming majority of the market that has united behind us and supported affordable, clean energy.
"Although today's decision was partially favorable for Yingli, we are saddened to see the global ramifications of this case. We are in the midst of a global trade war now.”