EU split on Chinese solar trade war

China has stolen the sun from the EU solar panel industry, to bastardise Richey Manic, and the EU is not happy. 'Countries that use protectionism, and China is one of them, should accept reciprocal rules,' says French industry minister Arnaud Montebourg.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013

Solar panel imports have become a white-hot topic for EU policy-makers in recent months. According to some member states, Chinese firms are unfairly undercutting rivals and selling their solar panels to customers below cost - a practice known as 'dumping'. But according to others, these cut-price products are perfectly fair and legal.

Now, EU trade commissioner Karel De Gucht wants to put an end to the dumping, and proposes adding levies averaging 47% on the solar panels. A pretty radical step to protect the manufacturing of the energy panels in the EU. These provisional duties are set to take effect from 6 June until December when the levy will be up for review. Both sides can then negotiate for a new settlement.

This protectionist move is a pretty big deal. Not only could it set a precendent for banning the import of super-cheap Chinese-made goods (indeed, it looks like the telecoms sector is next), but it has also opened a can of political worms regarding the relationship between certain member states and China.

The issue has split the EU right down the middle, with 14 member states (including the UK and Germany) opposed to setting punitive tariffs on Chinese imports, and the remaining 13, led by France and Italy, crying, 'Déloyale!' and 'Ingiusto!' respectively.

So, why would the UK want to keep Chinese solar panels at their current low prices? 'The UK doesn't really have much of a manufacturing industry for solar PV,' explains Marcus Hodgetts, director at Renewable Works, a solar panel installation company. 'China is by far our largest supplier, and the quality of the products it exports are of the same standard as EU-based manufacturers, only much, much cheaper. If we increase the price of Chinese-made panels, some EU brands have said that they will raise their prices too so costs will go up across the board. The consumer will ultimately be the one that suffers.'

Germany has thrown its lot in with the UK, despite the fact that it was a German company, Solar World, which first raised the complaint against China. Formidable German leader Angela Merkel has said that she decided to vote against the tariff in order to avoid triggering a damaging trade war. As the economic powerhouse of Europe, its likely she will sway the vote...

However, France is not backing down yet. On Monday, French industry minister Arnaud Montebourg said: 'We want to see a balanced relationship between China and the European Union. Countries that use protectionism, and China is one of them, should accept reciprocal rules.' Well, France does boast a couple of massive solar PV manufacturers, after all.

One thing is certain, this intervention by the EU is big news. We've never seen an 'anti-dumping' case of this magnitude  undertaken by the Commission before. It affects €21bn ($27bn; £18bn) worth of Chinese-made solar panels sold in the EU.

Will the Commission back down under pressure from the opposing states? Or is this lights out for the Chinese solar industry?

Energy burnout: Can we keep the lights on at UK plc? Unless Britain sorts out its energy needs - and quickly - the inglorious spectre of power cuts may be with us again.

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