The European Union stepped up the threat of tariffs on solar panels from China by probing alleged subsidies to Chinese manufacturers already accused of unfair price undercutting in the biggest EU trade dispute of its kind.
The EU decision to open the inquiry into whether Chinese solar-panel exporters receive trade-distorting government aid comes amid a separate European investigation into allegations that they sold in the 27-nation bloc below cost, a practice known as dumping.
The two cases cover 21 billion euros ($27 billion) of EU imports last year of crystalline silicon photovoltaic modules or panels and cells and wafers used in them. Both probes stem from complaints by EU ProSun, an industry group led by Germany’s Solarworld AG.
The new investigation will determine whether solar panels from China are “being subsidized and whether these subsidized imports have caused injury” to the EU industry, the European Commission, the bloc’s trade authority in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-subsidy duties and EU governments have 13 months to decide whether to apply “definitive” levies for five years.
On Sept. 6, the commission started to investigate whether Chinese manufacturers dumped solar panels and the cells and wafers used in them in the EU, initiating the largest import-protection case in Europe. In that inquiry, the commission has nine months to introduce any provisional anti-dumping duties and EU governments have 15 months to impose possible five-year levies.
The dumping and subsidy cases highlight European concerns about the expansion of Chinese solar companies led by Suntech Power Holdings Co., which have grabbed market share from European rivals that were once dominant. They follow a U.S. decision this year to impose anti-dumping and anti-subsidy duties as high as 250 percent on the Chinese industry.
Europe accounts for around three-quarters of the global photovoltaic market. China produces about 65 percent of solar panels worldwide, the commission said in September when opening the dumping case. The EU is China’s main export market, accounting for roughly 80 percent of Chinese sales abroad, according to the commission.