The European Commission has reportedly recommended an average 47 percent tariff be imposed on Chinese solar panels entering the EU.
That’s the result of a months-long investigation, launched in September 2012, over whether Chinese PV panel producers have been unfairly benefiting from government subsidies, giving them an unfair advantage over European solar panel makers.
It’s the biggest trade dispute the European Commission has ever handled, as China is Europe’s second biggest trading partner.
An LDK Solar installation in Sint-Baafs-Vilve,
Germany. Credit: LDK Solar
Chinese production of solar panels has grown amazingly over the past few years, now making up 80 percent of the European solar market. This fast expansion from Chinese firms has flooded the market, dropping the price of PV panels and leading to a slew of bankruptcies among panel producers.
As was argued in the U.S. trade case which resulted in import tariffs placed on Chinese solar cells, European producers have claimed that this expanded production was made possible by unfair subsidies to Chinese firms. Groups filing these trade complaints also say that Chinese companies sold their products at below cost, a strategy to unfairly capture market share.
According to media reports, Trade Commissioner Karel De Gucht has recommended the anti-dumping tariff to offset financial damage to European firms caused by below-cost Chinese solar panels. Bloomberg reports that tariffs could reach as much as 67.9 percent, impacting around 100 Chinese firms, and that 47 percent is the average proposed tariff rate.
However, the Commission will consult EU member states before making a formal decision in June. But even the June decision will only be preliminary; only by December must the EU decide whether to impose punitive measures that will hold for five years.
China is urging a more moderate approach, with the official newspaper Xinhua saying that “[i]nstead of trying to win more breathing room through unfair protectionist measures, European solar panel makers need to find ways on their own to revive their businesses and compete with their rivals in the global market.”
