EC To Implement Tariffs On Chinese Solar Panels

The European Commission (EC) is to impose tariffs on Chinese solar panels from 6th June 2013. The EC is the executive arm of the European Commission and is made up of commissioners appointed from each member state (27). It is responsible, amongst other things for proposing EU legislation; implementation of EU policies and the budget; setting objectives and priorities for action; enforcing EU law and for representing the EU in trade negotiations etc.

The EU believes that China is unfairly subsidising the cost of solar panels that it exports to the single market. China is the world’s largest producer of solar panels, but the EC calculates that they benefit from an 88% subsidy which, they argue, gives the Chinese product an unfair advantage over EU-produced products. The market was worth €21 billion to China in 2011 and the anti-dumping dispute is the largest in EU history.

Chinese solar panel imports will be subject to an 11.8% duty which will rise to 47.6% in two months if no agreement can be reached with China. The duty will become fixed for five years if no mutually acceptable solution can be found before December. The move is against the wishes of some EU states, notably Germany, but the EC’s brief is such that it does not require an EU consensus for the initiative which is being taken to protect EU producers. Some providers of “green energy” are strongly opposed to the EC’s action, arguing that prices must be kept low since “feed-in tariffs” (the prices solar energy producers get paid for pumping energy into the electricity grid) are falling. The case for so-called green energy has always had a significant political component rather than being driven forward be economic factors alone.

China has suggested that it will “take necessary steps” to protect its own interests and has announced a probe into alledged EU dumping of wine into the Chinese market.