EU-China Solar Panel Deal in Place; Subsidies Probe to Continue

The EU and China reached a deal this summer on their high-tension row over solar panel trade, with Beijing agreeing to a “price undertaking” arrangement that will effectively exempt participating companies from anti-dumping duties. However, a separate investigation by the European Commission into allegedly unfair Chinese solar subsidies is still ongoing, with definitive results due by year’s end.

The deal announced in late July came after months of burgeoning tension between the EU and its second-largest trading partner, due to the Commission’s announcement in June that it had found evidence of Chinese solar panels and their components being “dumped” on the EU market - in other words, being sold at lower prices abroad than their normal value.

Brussels had subsequently imposed provisional duties of 11.8 percent on these imports, with the warning that these would increase to an average of 47.6 percent should EU and Chinese officials not reach a negotiated solution by early August.

The Commission’s investigation had begun a year ago, following a complaint filed by EU ProSun - a coalition of EU solar panel makers led by the German-based SolarWorld.

The EU currently imports €21 billion in solar panels and their component wafers and cells from China each year. The Commission had argued that the anti-dumping duties were necessary to protect the 25,000 jobs in the EU solar sector, with the industry taking a hard hit in recent years as it struggled to keep up with lower-priced imports from abroad.

Price undertaking agreement: terms

Under the terms of the agreement, participating Chinese exporters have committed to respecting minimum import prices. According to the Financial Times, Chinese companies will be able to export up to 7 gigawatts per year of solar products without having to pay the anti-dumping duties, as long as the price does not fall below 56 cents per watt.

Non-participating Chinese companies will, however, be subject to the 47.6 percent average anti-dumping duty.

Many European solar manufacturers had wanted at least 80 cents or more per watt out of the price undertaking agreement, arguing that anything less would not sufficiently level the playing field for EU producers.

Meanwhile, the Alliance for Affordable Solar Energy (AFASE) - a separate coalition of downstream solar producers that has been critical of the ProSun case - gave a lukewarm welcome of the price undertaking deal, while warning that it could create problems for some renewable energy projects in the 28-member EU bloc.