European Union and Chinese negotiators reached an agreement to curb
EU imports of solar panels from China in exchange for exempting the
shipments from punitive tariffs.
The accord would set a minimum
price for imports of the renewable-energy technology from China. In
return, Chinese manufacturers would be spared EU levies meant to counter
below- cost sales, a practice known as dumping. The EU import taxes
target more than 100 Chinese companies including Yingli Green Energy
Holding Co., Wuxi Suntech Power Co. and Changzhou Trina Solar Energy Co.
“We
found an amicable solution in the EU-China solar- panels case that will
lead to a new market equilibrium at sustainable prices,” European Trade
Commissioner Karel De Gucht said in a statement yesterday in Brussels.
He didn’t disclose China’s minimum-price offer, which must be accepted
by the full European Commission, or indicate whether the accord includes
a limit on the volume of imports from China.
The goal is to limit
Chinese competition against European manufacturers such as Solarworld
AG in the EU’s largest commercial dispute of its kind, without resorting
to anti- dumping duties. The case covers EU imports of crystalline
silicon photovoltaic modules or panels, and cells and wafers used in
them -- shipments valued at 21 billion euros ($28 billion) in 2011.
The
pledged price will allow Chinese companies to continue exports to the
EU and “keep reasonable market share,” according to a statement
yesterday on the website of the China New Energy Chamber of Commerce,
which advises both the government and companies.
In early June,
the commission announced provisional anti- dumping duties as high as
67.9 percent on Chinese solar panels. The commission, the EU’s
Brussels-based executive arm, decided to apply an initial lower rate of
11.8 percent for two months to encourage the government in Beijing to
negotiate a solution. As of Aug. 6, unless the accord goes ahead, the
provisional levies will range from 37.3 percent to 67.9 percent,
depending on the Chinese company.
“After weeks of intensive talks,
I am satisfied with the offer of a price undertaking submitted by
China’s solar-panel exporters,” De Gucht said. “We are confident that
this price undertaking will stabilize the European solar-panel market
and will remove the injury that the dumping practices have caused to the
European industry.”
The commission said that it can’t give further details on the price undertaking until it has formally approved the agreement.
The
accord would fix a minimum price of 56 euro cents a watt for annual
imports from China of as much as 7 gigawatts, said a trade official in
Europe who spoke on condition of anonymity because the information
hasn’t been publicly announced yet.
The pact would cover around 90
Chinese exporters that have about 60 percent of the EU solar-panel
market, according to the official.
The case highlights EU concerns
about the expansion of Chinese solar companies, which have grabbed
market share from European rivals that were once dominant, and underpins
a broader crackdown by Europe on perceived unfair low pricing by
China’s exporters.
“Reaching a consensus is positive and has a
quite good outcome”, Lian Rui, an analyst at NPD Solarbuzz in Beijing
said today by phone. “The price is more beneficial for Chinese
solar-component manufacturers than higher duties.”
EU ProSun,
which represents around 40 European solar-panel producers including
Solarworld of Germany, called the deal unacceptable and vowed to file a
lawsuit.
The group said the agreed minimum price matches that at
which Chinese exporters are selling solar panels in the EU and the
volume cap represents about 70 percent of the “expected” solar market.
“This
is essentially a guarantee of sales at that level and more for China
and an authorization to sell at dumped prices,” Milan Nitzschke,
president of EU ProSun, said in an e- mailed statement. “That is a clear
violation of EU trade law.”
In Europe, which accounts for about
three-quarters of the global photovoltaic market, more than two dozen
manufacturers have sought protection from creditors since 2010 and many
have shifted production to lower-cost plants in Asia. Germany’s Q- Cells
SE, which was acquired last year by South Korea’s Hanwha Group, has its
largest factory in Malaysia.
Chinese exporters increased their
combined share of the EU modules market to 80 percent in the 12 months
through June 2012 from 63 percent in 2009, the commission said in June,
when introducing the provisional anti-dumping duties. The Chinese
industry expanded its share of the bloc’s cells market to 25 percent
from 8 percent and of Europe’s wafers market to 33 percent from 6
percent over the period, according to the commission.
The duties
were the preliminary outcome of a dumping inquiry that the commission
opened in September last year and that German Chancellor Angela Merkel
said in May shouldn’t lead to permanent levies against China. EU
governments, acting on a commission proposal, have until Dec. 6 to
decide whether to accept the draft agreement as a definitive measure.
Such arrangements usually last for a period of five years.
The EU
is also threatening to impose a separate set of duties on Chinese solar
panels to counter alleged subsidies. That’s the focus of a second
investigation in which the deadline for introducing any provisional
anti-subsidy duties is Aug. 8 and for imposing any definitive measures
is early December.
[Bloomberg]