Despite talks between German Chancellor Angela Merkel and Chinas Premier, Wen Jiabao, and calls from industry associations to avoid a trade dispute, the European Commission has today launched an anti-dumping investigation into imports of photovoltaic cells, wafers and modules from China.
Based on the value of imports, it is the most important anti-dumping complaint that has been received by the EC to date, it said. It added that in 2011, around 21 billion worth of photovoltaic products were exported from China into the EU.
It is believed the investigation will take 15 months to complete. After 9 months, however, it would be possible to impose provisional anti-dumping duties, provided there is sufficient evidence to support the anti-dumping claims.
In the meantime, the application submitted by EU ProSun, and spearheaded by SolarWorld AG, at the end of July has supplied sufficient evidence, showing: "(1) possible price dumping by the exporting producers on the EU market, (2) injury suffered by the Union industry, and (3) a possible causal link between the dumped imports and the injury suffered by the Union industry. Hence, the Commission has found that there is sufficient prima facie evidence to warrant the opening of an investigation," said the EC in a statement released.
As a next step, the commission will send questionnaires out to such parties as exporting producers, Union producers, importers and associations, in order to obtain information relating to photovoltaic exports, production, sales and imports. "Once the interested parties have responded to the questionnaires, the data will be verified by the Commission, often by means of on-spot verification of company data," continued the statement.
Using this data, the commission will then decide if dumping has occurred. Preliminary duties could be imposed as soon as next June, if evidence of dumping has been found. According to the EC, there are 3 possible outcomes: (i) the imposition of provisional duties; (ii) a continuation of the investigation without provisional duties; or (iii) the termination of the investigation.
Before any measures are imposed, however, the EU will conduct a "Union interest test" to determine whether they are "more costly to the Union economy than the benefit of the measures would be to the complainants."
Naturally, EU ProSun has welcomed the news. Milan Nitzschke, president of the initiative commented, "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."
Björn Emde, European spokesperson for Suntech told pv magazine, "We welcome chancellor Merkel’s support for dialogue as the solution to a trade dispute and are prepared to actively contribute towards this aim. Tariffs are not in the interest of the clear majority of people employed in the European solar industry. The support we receive from the many European members in the Alliance for Affordable Solar energy (AFASE) clearly demonstrates this."
Meanwhile, Liansheng Miao, chairman and CEO of Yingli Green Energy stated, "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."
China-based Trina Solar said it believed the dumping allegations will prove unfounded. "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," it said in a statement released.
"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," added Ben Hill, president of Trina Solar Europe.