The latest salvo in a continuing trade battle over access to Europe’s multi-billion euro photovoltaic (PV) market includes tariffs for Malaysian and Taiwanese ‘shell’ companies owned by Chinese manufacturers hoping to evade 2013 pricing agreements.
The original 2013 anti-dumping deal was made between EU Trade Commissioner Karel De Gucht and several score Chinese companies. It addressed allegations by European manufacturers including Solarworld AG that Chinese manufacturers were receiving unfair government subsidies that allowed them to undercut prices of PV panels made in the EU.
Chinese companies entering what had been an almost ‘all-EU’ market quickly came to dominate Europe’s solar energy landscape by 2011; nearly 90 Chinese companies held a 60 percent share of the 21 billion euro market that year. The subsequent 2013 agreement was Europe’s bid to ensure fair competition.
The original agreement was not with China, but with Chinese companies. Soon after the accord was reached, a significant number of those companies sought manufacturing presences in Malaysia and Taiwan—countries unaffected by the anti-dumping deal.
Within the industry word spread that a sizeable number of the newly built Malaysian and Taiwanese factories were in fact not making solar panels, but were simply warehouses acting as tariff-free transshipment points to Europe. New investigations by the European Commission were subsequently begun and on 5 December 2015 the EU announced that it was looking seriously at extending two sets of tariffs originally scheduled to expire on 7 December. The Commission said new studies would be undertaken to assess the continuing need for tariffs.
The European Commission announced on 12 February 2016 that sanctions would be extended to select firms in Malaysia and Taiwan. The EU is now keeping that pledge as it looks into wider issues. Companies exempted from the EU’s latest round of tariffs comprise a lengthy list of PV panel makers in those countries that have been in the business for a while, such as Motech and E-Tom (Taiwan) and Flextronics (Malaysia.) Two leading Chinese panel makers that had previously announced plans to manufacture in Malaysia at the height of off-shore migration include ReneSola and Jinko Solar; those plans appear to have been suspended.
While the European Commission investigation continues, companies that have been ‘twice caught’ trying to undercut the pricing accord have been largely silent. The United States has taken an approach similar to Europe in assessing tariffs against PV panel importers who sell modules at prices substantially under those of domestically produced products.
There’s no indication that the anti-dumping tariffs will disappear anytime soon. The status quo is likely to continue even as the EU and the US start to phase out many government incentives for solar parks. In the interim, China continues seeking ways to boost domestic consumption and grow its export markets, which could lead to further off-the-books encouragements for manufacturers looking to market products in Europe and elsewhere.