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EU and China reach “amicable” solution to solar trade dispute

The EU will impose a minimum price on Chinese solar exports to Europe

Chinese companies participating in the price-undertaking will be exempt from the anti-dumping duties. (Source: Suntech)

By Nilima Choudhury

The European Union and China have reached an amicable solution to curb exports of solar products from China into Europe through a minimum price agreement. 

The terms of the agreement reverses the decision made in June which saw provisional duties levied against Chinese manufacturers accused of dumping their products on the European market. Instead it sets a minimum price on exports, “after an arduous and painstaking negotiation” according to the Chinese Ministry of Commerce.

EU Trade Commissioner Karel De Gucht said: “We are confident that this price undertaking will stabilise the European solar panel market and will remove the injury that the dumping practices have caused to the European industry.

“We have found an amicable solution that will result in a new equilibrium on the European solar panel market at a sustainable price level.”

The new prices are expected to last until the end of 2015.

Those exporting Chinese companies participating in the price-undertaking will be exempt from the anti-dumping duties.

At a press conference this morning, de Gucht said: “Certain Chinese companies have signed a voluntary agreement that they will not dump and will accept a minimum price for modules.

“Those that have not signed will be obligated to pay the 46.7% duty that was decided before from 6 August which accounts for 30% of Chinese suppliers.”

The Ministry of Commerce said in a statement that the Chinese solar industry now needs to place more emphasis on research and development of new technologies and market diversification.

“China PV industry has been working to maintain a fair international trade environment and oppose trade protectionism and advocated to resolve trade disputes through negotiation.”

Official details of the agreement will be released following their adoption by the European Commission.

The Chinese investigation into imports of polysilicon, the main component in manufacturing solar panels, is still ongoing, de Gucht confirmed at a press conference this morning.

He said the Chinese government is expected to impose provisional measures by the end of February 2014. The European Commission expects China to offer a two-month negotiation period just as the Commission offered to China.

EU ProSun, the group of European manufacturers that launched the original complaint against Chinese solar companies have taken their outrage against the Commission’s decision to the European Court of Justice claiming it as “illegal”.

Reaction:

EU Trade Commissioner Karel De Gucht – “The Commission has received signed commitments from a large number of Chinese solar panel exporters. Today I have tabled a draft decision to accept these. I hope the European Commission will adopt my proposal on 2 August.

“Solar panel deployment is important for Europe’s ambition to reduce CO2 emissions. Exactly because of the ambitious climate policy in Europe over the previous years, European demand was world leading and exceeded the capacity of European supply.

Finlay Colville, vice president at market research company Solarbuzz – “It is debatable who is going to police the pricing and cap figures. It is one thing to set up but another to administer it. It seems the whole thing could become unmanageable given the pace of the solar industry. It may take months to add up the numbers afterwards by which time demand has already happened.

“It’s a blow for the European solar manufacturers. They were hoping for duties to have a price advantage in Europe.”

Thorsten Preugschas, CEO of Soventix GmbH and Chairman of the Alliance for Affordable Solar Energy, the lobby group against duties – “Price increase would accelerate what we have seen in past months, the reduction of a significant number of jobs throughout the solar value chain.”

Denis Gieselaar, CEO of Oskomera Solar Power Solution and Board member of AFASE – “We don’t want price increase as this will contract demand in Europe. An agreement based on unreasonable minimum prices would be a complete lose-lose situation, including for European manufacturers, at a time when Europe is so desperately looking to stimulate green jobs creation”.

UK Solar Trade Association chief executive Paul Barwell - “Thank God we’ve moved a long way from the original proposals, which were truly appalling and without justification.

“In the short term, the proposals could do real damage to the UK downstream solar industry and to national deployment levels. They leave the UK non-domestic solar industry in a very difficult position, when in fact the UK is one of the major EU growth markets, and ought to remain so.”

STA PV specialist and government advisor Ray Noble – “We urge the UK government to amend this proposal by calling for a shorter duration for this deal, fluctuating or lower minimum prices, and allowing for volume growth and cost reductions. Otherwise the UK policy framework will be increasingly out of kilter with real world costs.

“It would make little sense from a public value-for-money perspective for the UK government to allow the solar industry to grind to a halt because of Brussels meddling.”

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