On 4th June 2013, the European Commission imposed anti-dumping duties on PV products imported from China.
The initial duty will be 11.8% on all Chinese solar products and will be effective for the period June 6 to August 6, 2013 and will be applicable for Chinese-made solar panels, cells and wafers. If a negotiated settlement is not reached by August 6, the duties will increase to an average of 47.6%.
There has been widespread opposition to this duty in Europe, especially in Germany, and even German Chancellor Angela Merkel has opposed the duties and called for negotiated settlement of the issue.
This highly controversial matter was discussed by representatives of companies, industry associations and research institutions. They discussed the far reaching implications of this imposed regulation. There were powerful arguments for and against the duties, and the discussion was quite lively.
Uta Harnischfeger, Financial Times, Germany moderated the session and set the context for the discussions. Following you find the summarized comments of the panelists:
Dörte Fouquet, Lawyer, Becker Büttner Held, Belgium outlined the entire anti-dumping investigation process and how the duties were determined. After the investigation, European Commission has come to the conclusion that there is dumping. The anti-dumping duties are not retro-active and there is time to come to a settlement and prevent the AD tariffs to be there for 5 years.
Milan Nitzschke, President, EU ProSun, Belgium, the representative for the complainants against the dumping of Chinese modules, outlined why the duties are important. He said that the prices of PV products were far below the production costs and there is significant evidence that this is caused by the dumping by Chinese companies. The situation is completely unsustainable and has led to the loss of competitiveness of EU based manufacturers. In the last couple of years, there were 60 bankruptcies that led to about 15,000 job loss in EU. According to him, lower cost manufacturing countries like Korea, India, Malaysia, etc which are the neighbours of China are also unable to compete with Chinese companies. Even South Korean companies have stopped investments, since they cannot compete. There is no money for investments in R&D and technological improvements. Chinese companies already have around 84% market share in Europe and a global monopoly for Chinese companies is imminent. He asked why EU based companies which were pioneers in he sector should exit manufacturing/industries and the country become a service based industry. Furthermore, he allayed fears that the prices will go up if the anti-dumping (AD) duties are imposed, citing the example of US where similar AD was imposed. In US, the prices were largely unaffected by the anti-dumping duties. He also was of the view that the 20-20-20 renewable energy targets for Europe is not going to be affected by the trade issues.
Peter J. Desmet, Board Member, AFASE - Alliance for Affordable Solar Energy, Belgium spoke against the anti-dumping duties and said that even though there were losses in the upstream manufacturing sector, the downstream has grown into a huge sector in itself with lot of opportunities. He also said that everyone is benefiting from the Chinese expansion into the solar sector. According to him, solar is not a zero sum game. China wins in manufacturing, and everyone else wins in terms of affordable solar energy, especially, non-FiT markets and rural electrification in many parts of the world. Mr. Desmet pointed out that solar is going through the normal consolidation phase like any other industry. He said that EU should also relax its lending norms so that EU based companies benefit. He was of the view we also need to keep in mind climate change and clean energy goals and should not sabotage it with the anti-dumping duties.
Jerry Stokes, Chief Executive Officer, ITS INNOTECH SOLAR AS, Norway was of the view that protectionism is not beneficial and in a trade war, no one wins. He said that he believes in open trade and the drop in cost has made solar accessible to a vast majority of people across the world. But for a sustainable market, there is a need for sustainable companies which are profitable. And no one can be sustainable without being profitable. It is a reality that cost of production is lower in China and other far eastern Asia(Singapore, Malaysia, etc). He said that every country resorts to some form of incentivising the growth of a sector in the country. Even in some parts of Germany, companies used to get government incentives for setting up manufacturing units (in East Germany – upto 50% subsidies and tax breaks were available for companies to set up manufacturing units).
Dr. Florian Wessendorf, Managing Director PV Equipment, VDMA German Engineering Federation, Germany highlighted the tremendous overcapacity in the market and that the entire trade dispute has created uncertainty. The only cure for these issues is market growth. He also dispelled the notion that the best technology is developed only in EU. He said that best technology is also available in Korea, Singapore or other countries.
Conclusion:
The panel concluded with some diverse views, but the panel agreed that trade issues are quite challenging since there is a fine balance between creating level playing field and the need to make sure that affordable solar technology is available to the majority of the global population.
