EU Imposes Tariff on Chinese Solar Panels

(CN) - With Chinese companies dumping solar panels on the EU at prices 88 percent lower than market value, the European Commission said it must impose tariffs.

After a nine-month investigation, EU regulators found that the Chinese companies have been selling solar panels, cells and wafers to European customers at prices far below market value. Solar energy parts made in China now account for 80 percent of the EU market, and many European companies are now facing bankruptcy as a result, the commission said in a statement Tuesday.

China's production capacity for solar panels accounts for 150 percent of global consumption of the parts, and is almost double the total EU demand, commissioners said. They added that a two-pronged tariff is necessary to alleviate pressure on the European solar industry.

"This decision follows a thorough and serious investigation and extended contacts with market players," the agency said. "As the market for and imports of solar panels in the EU is very large, it is important for this duty not to disrupt it. Therefore, a phased approach will be followed with the duty set at 11.8 percent until Aug. 6, 2013. From August on the duty will be set at the level of 47.6 percent which is the level required to remove the harm caused by the dumping to the European industry."

Regulators also urged both Chinese exporters and the Chinese Chamber of Commerce to "find a solution in line with the basic anti-dumping regulation so that provisional duties can be suspended and a negotiated solution achieved."

The commission warned that the new tariffs could actually harm EU workers in the short term since solar panel installation jobs will likely be lost. It noted, however, that any job losses would pale in comparison to the 25,000 EU solar energy production workers who will be displaced if China's dumping policy continues.

"Today's decision should also contribute to creating a level playing field for Europe's renewable energy industry, which is essential to the EU's renewable energy targets," commissioners added. "Unfair trade in solar panels does not help the environment and is not compatible with a healthy global solar industry. The commission believes that a market that faces dumped imports will drive local producers out of business and discourages EU producers from developing cutting-edge technologies in the renewable energy sector."

The agency also noted that its policy on tariffs is not punitive and is fixed at the lowest level possible to achieve market fairness - unlike policies in the U.S. and China, which "always apply the full dumping found," according to the commission statement.

Commissioners said they are also investigating whether China illegally subsidizes solar panel products. A decision on anti-subsidy measures is expected by Aug. 7, according to the statement.

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