Europe has to remain a rolemodel for open markets.Punitive tariffs are the wrong: they damage European consumers as well as the consumer
In the coming weeks, EU member states decided on a potential extension of import duties and minimum import price on Chinese solar modules and cells. DG Trade, which is in the lead, has recommended a two-year extension after one year of investigation. SAFE considers the results are built on sand.
Berlin, 26 January, 2017. Today, EU member state representatives meet to discuss the findings of an investigation on possible dumping and excessive subsidation for Chinese manufacturers of solar modules and cells. The Commission’s case handlers recommend that member states extend the applicable punitive measure for another two years. “Unfortunately, the wrong conclusions were drawn from profound and predominantly correct analyses.” Comments Dr. Holger Krawinkel, spokesman of the Solar Alliance for Europe (SAFE). “Considering the recent trade policy announcement made by the new American leadership, the EU risks to gain a questionable success at the expense of the complete European economy and consumers – by provoking another unnecessary trade war.”
In its report, the EU officials themselves admit that European module and cell manufacturers have not benefitted from the trade barriers: sales volumes and market share have dropped further since 2013. An analysis commissioned by SAFE confirms this finding. According to the report, number and production capacity of European module and cell producers have both decreased in 2016 compared to 2015. Module production capacity was at 6.6 GW and for cells 1.9 GW. The majority of producers has only small factories. Approximately 77 per cent of module producers and 38 per cent of cell producers have capacities below 100 MW. Leading producers from China on the other hand have 30 to 60 times as much capacity. This leads to enormous economic advantages. As analysts from HIS have shown, Chinese producer not only benefit from economies of scale but also regional supply chain and high degree of standardization – all of which allow them to produce at low cost.
Yet, the Commission chose to neglect these structural differences in its investigation. Not only due to this circumstance but also applying the analogue country method have led to results built on sand: Usually in such trade cases, the Commission does not find adequate analogue companies as their participation in such an investigation is voluntary. The chosen Taiwanese company is very small and does not itself produce modules. “The Commission did not leave any stones unturned to somehow make this company’s data comparable to the big Chinese players. We do not understand how this was done and hence do not see a case of dumping.”, comments Krawinkel. “Additionally, the investigation in state subsidization has not shown relevant levels of subsidies.”
The SAFE spokesman concludes: “The whole procedure is a bureaucratic monster with little informative value and leads to politically wrong decisions. The EU should not only terminate the measures but also reform the regulatory basis to prevent political misuse to provoke trade wars.“ There is a chance that structurally inferior European module producers request further investigation expanding the measures to other producing countries. “It is under no acceptable to further walk done this road and in doing so damaging the whole European solar industry”, concludes Krawinkel. “Politicians have to stop this and use their political leverage.”