15 June 2018
Possibility of Review and Extension of Existing Trade Defence Measures Against Solar Panels
It is reported that European solar producers had until 3 June 2018 to file requests for the Commission to review the extension of trade defence measures on Chinese solar panels beyond the 3 September 2018 expiry date. The Commission had previously published a notice that if no request was filed by the deadline, then the duties would automatically lapse on 3 September 2018.
The trade association EU ProSun, comprising a number of European solar panel producers, had, it is reported, indicated that it would ask for extended and possibly more stringent trade defence measures.
EU ProSun’s intent to file a request has been called into question since its leading member, SolarWorld, filed for bankruptcy for the second time this past March. However, lawyers and other sources have suggested that the trade association was expected to, and may have actually filed, the request, at least for an extension of the anti-dumping measures, and possibly also for the anti-subsidy measures, but this information has not been confirmed.
If the requests were filed, then the Commission will first examine whether there are any prima facie elements justifying the opening of an investigation to extend the measures. Once the investigation is opened, the measures will remain in force for the duration of the review, regardless of the fact that the review would end substantially later than the scheduled expiry date of 3 September 2018. Any decision would not be made until the very end of the review investigation.
Other members of the European solar industry, such as SolarPower Europe, a trade association which is said to represent 250 solar companies and over 100,000 solar panel installers, are opposed to an extension of the duties. Their position is in line with a general belief that solar power growth in Europe has been adversely affected by the trade defence measures. This view is also supported by two separate studies, which show that a loosening of trade defence measures on imports of solar products from mainland China would foster growth in the solar power industry.
The 2017 Study on “Residential Prosumers in the European Energy Union” from the Commission’s DG Justice and Consumers has suggested that such a relaxing of measures would increase the investment rate in the solar industry and result in a 20-30% increase in installed solar photovoltaic capacity by 2030. Additionally, a November 2017 Study by EY, a consulting firm, titled “Solar PV: Jobs & Value Added in Europe” performed on behalf of SolarPower Europe, has suggested that removing the anti-dumping measures would bring as many as 45,000 additional jobs to the solar industry throughout the EU.
Whatever the actual job growth figures may be, the basic assumption of the untapped job growth potential within the European solar industry is accepted; a view that has also been acknowledged by a Commission Trade Department official.
The same official pointed out that the March 2017 18-month extension of the measures was unusually short – these extensions are ordinarily adopted for five-year periods – indicating that EU Member States may be less convinced about the efficacy of the duties. It is notable that in January 2016, prior to the extension, Member States rejected a Commission proposal to extend the duties for an additional two years.
The above factors, combined with the gradual reduction of the minimum import price (MIP), which has been implemented since October 2017, suggest that the trade defence measures should be in the process of being phased out.
Nevertheless, a factor of potential relevance is the impact that recently imposed US dumping tariffs on global solar panel imports have had on the EU solar panel market. They have apparently placed the EU market under pressure by limiting access to the US market. Reports claim that this has led to a surplus of panels in the EU. If this is indeed the case, these developments may become factors for the Commission to consider when deciding whether or not to conduct a review, and then when (if at all) it is being conducted.
Definitive EU trade defence measures have been imposed on solar cells and solar panels from mainland China from 6 December 2013 onwards. The measures were imposed as a combination of tariffs on the one hand (anti-dumping duties ranging from 27.3% to 64.9% and countervailing duties ranging from 0% to 11.5%), and the MIP on the other hand.
As noted above, the measures were extended in March 2017 for an 18-month period, and are currently set to expire on 3 September 2018. Since October 2017, the Commission has also been implementing its plan to gradually reduce the MIP for both solar panels and solar cells.
The Commission Implementing Regulation 2017/1570 provides for a reduction of the MIP to EUR 0.18 per watt and EUR 0.3 per watt for multi-crystalline cells and modules, respectively, and EUR 0.21 per watt and EUR 0.35 per watt for mono-crystalline cells and modules. The reductions are intended to more closely reflect global prices, and have been occurring evenly on a per quarter basis until they reach the target prices in September 2018.