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Europe Initiates History’s Biggest Anti-dumping Case Against Chinese Solar Panel Imports of 21 Billion Euros

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Europe-China Anti Dumping Trade War Initiates

The worst fears of the Chinese solar panel producers have come true with Europe starting the history’s biggest anti dumping case against their products. A trade group called ProSun led by German solar panel maker Solarworld, complained against super cheap imports of solar modules from China to the EU 45 days ago. The EU has found there is a case to be heard and has started the anti-dumping measures against 21 billion euros of Chinese solar panel imports and the case will be completed in 15 months time. If found to be true, Chinese solar panels could be levied with heavy duties for a period of 5 years.

Why Yingli, Trina have become desperate

The biggest Chinese solar panel producers like Sunech, Trina ,Yingli and Canadian Solar have come out strongly against the recent filing of a complaint of dumping of Chinese solar panels in Europe. Solarworld which is the biggest German solar panel company has led a group of 25 European solar companies in filing a complaint against the dumping of solar modules made in China. Note Solarworld had earlier successfully managed to champion an anti dumping duty on China made solar panels, in the USA. In recent days, the Chinese Government has initiated the process of paying back the USA in the same coin by starting an investigation of US polysilicon imports.

Unlike the US – China solar panel spat, EU is a much bigger fight as China imports most of its production to Europe particularly countries like Germany and Italy. In fact, the Chinese solar growth has been largely driven by the solar subsidy policies in the European countries. Until last year, almost 95% of the Chinese solar panel production was exported to Europe. Europe accounts for almost 75% of the world’s demand of solar panels and has been instrumental in the growth of the Chinese solar industry. Note China accounts for less than 10% of the demand, while it supplies almost 60-70% of the global supply of solar panels. While the US was a small market comparatively, Europe is a huge market and the loss of this market will sound the death knell of the biggest Chinese companies.

Already most of the Tier 2 Chinese solar panel makers have shut down along-with the biggest European/US companies like Q-Cells, Solyndra etc. Like the USA, solar installers, developers, financiers and equipment suppliers have opposed this anti-dumping measure. These supply chain players have benefited hugely from cheap Chinese module imports raking in billions of Euros in profits. In fact the massive boom seen in recent years in solar panel installations has been driven mainly by the crash in solar panel prices as Chinese competition decimated pricing power throughout the industry supply chain.

China reacts timidly to EU action

China has reacted mildly by saying that it regretted the European action and it would hurt the global green industry. Note China has no cards to play at least in the green trade as it has a massive trade surplus and has already faced anti dumping measures from the US in both wind and solar energy. Escalating this into a more general trade war would be a dangerous decision as China is already suffering from a global trade slump. China has however started investigations into polysilicon dumping by US and Korea. The poly producers have also demanded that this be extended to European polysilicon importers like Wacker.

How China could retaliate against US

 US Polysilicon Companies like Hemlock as well as factories of European companies like Wacker, REC fear the worst. Chinese polysilicon companies have closed down because of their higher costs due to stiff competition from non-Chinese players. The Chinese Government has a big reason to retaliate against the US solar poly companies now that its solar panel organizations have been hit. The overall effect of the duties on Chinese solar panel companies will not be that big as they already have plans to circumvent the US duties which have been prepared long time ago. All it would do is raise the prices of the solar panels slightly. It would not make the surviving US solar panel companies competitive as the Chinese solar panel prices are far below that of US made solar panels. US Solar equipment companies like Applied Materials and GT Advanced Technologies too might face the ire of the Chinese government and companies who could look at alternatives in Europe.

EU investigation into Chinese solar panel imports

The European Union began a broad investigation Thursday into whether Chinese companies have exported solar power equipment for less than the cost of making it, in what amounts to history’s biggest anti-dumping investigation by value. The case covers imports from China worth €21 billion, or $26.5 billion, last year, a hefty 6.5 percent of all E.U. imports of Chinese goods. The European case is four or five times larger by value than a similar investigation under way in the United States, because the Union is the biggest export market for Chinese solar panels. The European Commission, which is leading the investigation announced Thursday, said the Union accounted for 80 percent of Chinese solar equipment sales worldwide. After exerting heavy diplomatic pressure for the Union not to start the case, and after veiled threats to retaliate, the initial Chinese response Thursday was comparatively restrained.

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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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