EU Imposes Provisional Anti-dumping Tariffs on Chinese Solar Panels

The European Commission has decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. The decision follows a thorough investigation and extended contacts with market players. As the market for and imports of solar panels in the EU is very large, it is important for this duty not to disrupt it. Therefore, a phased approach will be followed with the duty set at 11.8% until 6 August 2013. From August on the duty will be set at the level of 47.6% which is the level required to remove the harm caused by the dumping to the European industry.

The European Commission has reiterated its readiness to pursue discussions with Chinese exporters and with the Chinese Chamber of Commerce in order to find a solution so that provisional duties can be suspended and a negotiated solution achieved.

The EU decision comes after a nine month investigation, launched in September 2012, during which the Commission found that Chinese companies are selling solar panels to Europe at far below their normal market value, which causes significant harm to EU solar panel producers. The fair value of a Chinese solar panel sold to Europe should be 88% higher than the price to which it is actually sold. The dumped Chinese exports exerted undue price pressure on the EU market, which had a significant negative effect on the financial and operational performance of European producers.

The duties will be imposed in two stages, starting with 11.8% for the first two months and followed by 47.6% for another four months to alleviate the harm that is caused to the European industry by this unfair trade practice, dumping. In total, this provisional duty will be in place for a maximum of 6 months. The provisional duties are far lower than the 88% rate at which the panels are being dumped because the EU applies the so-called ‘lesser duty rule’, imposing only enough duty needed to restore a level playing field. The provisional duty, in addition to restoring fair competition, will ensure the continued development of an innovative green energy sector in the EU.

The Commission will now continue its investigation and hear the views of all interested parties. It remains ready to intensify talks with China to find alternative satisfactory solutions through a negotiation. On 5 December at the latest, the EU will have to decide if definitive anti-dumping duties will be imposed for a duration of five years.

Highly innovative EU companies are currently being exposed to immediate threats of bankruptcy because of unfair competition from Chinese exporters, who have taken over  more than 80% of the EU market and whose production capacity currently amounts to 150% of global consumption. In 2012, China’s excess capacity was almost double total EU demand. The Commission’s assessment indicates that imposing provisional measures will not only secure the existing 25,000 jobs in EU solar production, but also create new jobs in the sector.

In the short term, some jobs could be lost among companies installing solar panels. However, as the situation of EU producers improves and imports from other countries increase, these jobs could be recreated. Any job losses would in any case be substantially less than the 25,000 jobs in the EU solar production industry that are likely to be lost forever if measures are not imposed.

The EU decision should also contribute to creating a level playing field for Europe’s renewable energy industry, which is essential to the EU’s renewable energy targets. Unfair trade in solar panels does not help the environment and is not compatible with a healthy global solar industry. The Commission believes that a market that faces dumped imports will drive local producers out of business and discourages EU producers from developing cutting-edge technologies in the renewable energy sector.

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