Another Chinese PV heavyweight has announced its exit from the divisive EU minimum import price (MIP) scheme, which was introduced as a means of Chinese companies avoiding anti-dumping and anti-subsidy duties from the EU. It comes at a critical time for these particular EU trade measures, with players on both sides of the debate reinforcing their arguments as an upcoming review looms.
Chinese PV manufacturer JinkoSolar announced its withdrawal from the EUs MIP scheme on Thursday, stating that after careful strategic consideration, Jinko believes that the measures are no longer conducive to the ongoing expansion of its business in the EU.
The MIP, stipulating that Chinese companies must sell solar cells and modules in the EU above a fixed price, and import volume restrictions were agreed upon by the EU and the Chinese Chamber of Commerce for Import and Export Machinery and Electronic Products (CCCME) in December 2013, as an anti-dumping and anti-subsidy measure.
The agreement was undertaken by the majority of Chinese PV manufacturers initially, with those that declined having significant duties placed on their exports to the EU; the duties for Jinko were 41.2% for anti-dumping and 6.5% for anti-subsidy. However, Jinko has decided that it will fare better going it outside of the agreement, stating that protectionism harms fair competition and development of the PV industry.
After carefully reviewing our EU operations, we believe that the current MIPs no longer accurately reflect the current market price environment given that average selling prices in all major EU markets continue to decline, and seriously erode our competitiveness in those market, commented JinkoSolar Chairman Xiande Li. We feel our competitiveness and market power were being unfairly hampered and have opted to withdraw from the UT [MIP] agreement.
EU trade measures on the ropes
Jinko now joins the worlds largest PV manufacturer, Chinese company Trina Solar, in opting out of the agreement. Trina Solar made the same move in December 2015, also stating that the minimum import price does not reflect current market trends. It said that Chinese companies that remain in the agreement have lost their competitiveness to non-Chinese rivals in the EU.
Additionally, the European Commission announced in July that it was investigating three Chinese PV exporters for breaching the rules of the MIP. The three accused companies were Ningbo Osda Solar, Qixin Solar, and Shandong Linuo Photovoltaic Hi-Tech, who will be withdrawn from the MIP agreement should the EUs suspicions be substantiated.
To add fuel to the fire, 34 solar and renewable energy organizations signed a letter in July calling on the EU to immediately remove the trade measures against the Chinese PV manufacturers. The trade measures are due to be reviewed by the EU in March 2017, and with all of these strains on the policy, it seems more and more likely that it will be modified, if not abolished all together.
From the JinkoSolar side, the company still remains keen to expand its presence in the EU market, but clearly wants to change the terms of the relationship.
We believe that we will be in a better position to leverage our strong brand name, industry-leading technology, global production facilities, and large customer base once we withdraw from the UT [MIP] agreement, continued Li. We remain committed to our European customer and will continue to supply them with the high quality, reliable products we have become synonymous with.