EU is Preparing to Impose Taxes on Chinese Solar Industry, Involved 21 Billion Euro Loss

Summer is on the way, but the winter still stays in the Chinese Solar industry.

EU’s “anti-dumping and anti-subsidy” investigation on Chinese solar PV industry has latest development. According to overseas media on Chinese Urban Low-carbon Economy Network, EU Trade Commissioner K arel de G ucht will make a proposal to EU on Wednesday for imposing punitive import tariffs on Chinese photovoltaic products to protect the EU's photovoltaic industry. If this proposal is passed, then on 6th June, the EU may introduce temporary measures on photovoltaic product import, imposing a 30 percent or even higher punitive tariffs.

EU Punitive Tariffs on Full Swing

The EU is China's largest exporter of photovoltaic products; the export share of PV products to EU in China accounted for about half of the total PV product export in 2012 and was as high as 80% in previous years. "Now the gross profit of PV module exported to the EU is only 6% to 8% and if EU follows the U.S. to impose punitive tariffs, Chinese PV products have to increase price substantially to ensure no loss. However, the substantial price increases would make Chinese PV products lose competitive advantage. Therefore, EU’s 30% tariff on Chinese PV industry would undoubtedly be a major negative. “An anonymity of Jinko Solar’s high level told reporters of the Southern weekly in a telephone interview.

In last September and October, EU commission separately started “anti-dumping and anti-subsidy” investigation on solar modules imported from China, involving an amount of Chinese solar companies exporting to EU up to 21 billion Euro( about 27.6 billion dollars), which is the largest amount case in the history of EU’s anti-dumping and anti-subsidy investigation. The investigation of the U.S. was only for the anti-dumping of battery, but the EU’s includes the source of polycrystalline silicon, silicon slices and the final product solar modules. So once EU regards that there are dumping and subsidies, they would introduce punitive tariffs behavior which would pose more powerful influence than anti-dumping and anti-subsidy from the U.S.

Li - Mu Shan Hao Shi, the director of Brussels think-tank European International Political Economy Research Center pointed out that the EU has now reached a consensus that the solar product problem is caused by the glut of Chinese PV product. Such consensus means that there is almost no suspense of the sanction.

However, the opposition from within the EU is also very intense, due to high degree of dependence of the EU market for Chinese products photovoltaic, coupled with many European manufacturers of photovoltaic equipment and raw materials profit greatly from the Chinese PV industry,

The Active Response of Chinese Solar PV Industry

EU is China's main export markets of photovoltaic products, the Chinese photovoltaic products export share to the EU accounted for more than 95% of the total exports at four or five years ago. In 2012, under the influence of the EU's "anti-dumping and anti-subsidy" survey, the module price and export share both suffered a large decline. Statistics show that in 2012, China's solar photovoltaic products exports to Europe was $ 11.19 billion, down 45.1%, but still took up nearly half of China's photovoltaic products total exports of $ 23.3 billion.

However, Chinese PV industry has detected the sanctions of the EU and taken measures to cope with from the beginning of last year. Wang Zhixin, head of Yingli Green Energy publicity department, told reporters of the Southern weekly that Yingli handed with domestic counterparts to defend actively and to carry out lobbying work through legal means from last year; On the other hand, they started to expand domestic market for reducing dependence on the European market. In 2013, Yingli expects the revenues in the European market would only take up about 40% of the company's total revenue.

Artes Global Senior Marketing Director, Zhang Hanbin said, Artes is considering the adoption of overseas production ways to avoid the EU's sanctions. It is reported that Artes has a PV module factory in Canada with a capacity of 400 MW; the plant is in full production status now. The plant's products are exported to the European market and do not need to pay customs duties.

The dean of Yangtze River Delta Economy Research Institution, Zheng huan told the reporter that the development of Chinese solar PV industry could not entirely rely on international market and the most important measure at present stage is to develop domestic market. It is inevitable trend that the Solar PV energy and the renewable energy would replace the coal, oil, and other fossil fuels, but it would experience a long period to reach the whole community consensus. If EU adopts the sanctions, it may trigger the adjustment of the whole Chinese solar PV business, which would be decided by the market, bankruptcy or Elimination. Because that for each industry, it is certainly not normal if all the companies are making money. There should be profit and loss to keep the state of competition.