Two more Chinese companies ousted from EU price undertaking

Two more Chinese PV manufacturers have been found to be in breach of the EU’s MIP agreement. It is a recurrent story this year, as more and more companies leave the scheme, amid calls from within the European solar market to abandon the trade barriers against Chinese companies.

The divisive EU minimum import price (MIP) for Chinese solar manufacturers was introduced as a means of Chinese companies avoiding anti-dumping and anti-subsidy duties from the EU. The duties were introduced by the European Commission in December 2013, as a means of protecting the European solar manufacturing industry from Chinese dumping and subsidies undercutting prices. The majority of Chinese companies originally agreed to the MIP, which stipulated that they would sell solar cells and modules in the EU above a fixed price, to avoid tariffs being applied to their exports to the European market.

After investigation by the European Commission, Chinese companies Seraphim and Huashun have been found to be in breach of the MIP undertaking, and will now be excluded from continuing within the scheme. The decision affects over 180 invoices that the companies have already completed for business in the EU, and tariffs may now be applied in retrospect.

Not the first

These two companies now join a large number of Chinese companies to have been excluded from the scheme, for breaking the terms, or to have left voluntarily. In fact, most of the Chinese PV manufacturing heavyweights, including Trina Solar, JinkoSolar, JA Solar and Wuxi Suntech, have already voluntarily left the price undertaking, stating that the MIPs no longer accurately reflect the current market price, as selling prices have continuously declined, which negatively effect the competitiveness of those companies in those markets.

Others have faced the same fate as Seraphim and Huashun, as they have been excluded by the European Commission itself for breaching the MIP rules. Now that the exodus of Chinese companies from the agreement has gathered pace, voices within the European solar industry that want the measures abandoned completed have increased in volume.

The battle lines have been clearly drawn between those in the European market that want the trade measures abandoned, and the stubborn voices that are clinging onto them.

SolarPower Europe is leading the charge to get rid of the measures, with the support of some of the biggest names within Europe’s solar industry, claiming that the measures are hindering the development of the solar industry in Europe right along the value chain. Interestingly, even some prominent NGOs, including Greenpeace and WWF, weighed in on the side of SolarPower Europe, to add that the measures are counterproductive for action on climate change.

While SolarWorld-backed organisation EU ProSun has been dogged in its support of the measures, claiming that Chinese companies are to blame for huge waves of overproduction in the industry, which is resulting in job losses. However, it is no secret that SolarWorld would lose its competitive edge in the European market if the trade measures were peeled back, which means that there may be a conflict of interest in the discourse of EU ProSun.

Either way, the European Commission plans to review the trade barriers in early 2017. With the defiance of the Chinese companies, and some of the most prominent voices in the European solar industry, it is foreseeable that the measures will be somewhat adapted, if not removed completely.