Chinese Energy Market Faces more Tariff Threats

China is once again facing threats from the global community of tariffs as punishment for undercutting foreign rivals. Having already had tariffs imposed by the USA on the export of wind turbine components, the EU is issuing similar warnings to Chinese solar companies.

An ongoing investigation by the European Union claims that producers in Europe may be victims of unfair price undercutting for solar panels from China. It is the biggest EU trade dispute of its kind.

The EU opened a probe into whether Chinese manufacturers of solar panels sell them in the 27-nation bloc below cost, a practice known as dumping. The inquiry covers 21 billion euros ($26 billion) of imports of crystalline silicon photovoltaic modules or panels and cells and wafers used in them.

At stake is whether European companies such as Solarworld AG, Germany’s largest maker of the renewable-energy technology, win levies to counter growing competition from China following the similar U.S. trade protection.

The investigation will determine whether solar panels from China are “being dumped and whether the dumped imports have caused injury to the union industry,” the European Commission, the EU’s trade authority in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.

China’s Suntech Power Holdings Co., the world’s largest manufacturer of solar panels, denied engaging in unfair trade, expressed concern about the possibility of European anti-dumping duties and pledged to cooperate with the EU in the case.

“Our industry’s mission is to make solar affordable for everyone and we are concerned that trade barriers will only delay the industry from fulfilling this,” Zhengrong Shi, Suntech’s executive chairman and chief strategy officer, said today in an e-mailed statement. “Protectionist measures would increase the cost of solar energy in Europe and adversely affect European jobs in the solar industry.”