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EU ProSun has announced it has filed an official complaint with the European Commission over alleged illegal subsidies to Chinese solar manufacturers. EU ProSun claims to represent the majority of EU solar industrial production.
This request for an investigation of Chinese government support is distinct from the recently initiated investigation of dumped pricing the Chinese have already been accused of. EU ProSun states that, both actions, government support for exports and producer dumping, are illegal under WTO rules and need to be addressed urgently by the EU authorities.
Milan Nitzschke, president of EU ProSun, said, “Chinese government subsidies are only available to Chinese companies. Massive subsidies and state intervention have stimulated overcapacity more than 20 times total Chinese consumption and close to double total global demand. Hence, more than 90% of Chinese production had to be exported. Irrational overproduction on this scale cannot generate profits. Chinese subsidies shield manufacturers from insolvency, and are pumped into solar companies even if they are unprofitable. Most Chinese solar companies would have gone bankrupt a long time ago if not for endless government subsidies. Meanwhile over 20 major European solar manufacturers have become insolvent in 2012 alone.
“EU ProSun has identified many forms of significant government subsidies to Chinese solar manufacturers. For instance, Chinese banks implement government policy by giving very low interest rates to solar manufacturers, and if the borrower cannot pay back the loan, it may be written-off, extended indefinitely or paid off by other government-controlled entities. This makes it easier, cheaper, and a lot less risky for Chinese solar companies to obtain financing,” continued Nitzschke.
“EU ProSun recently alerted the European Commission to the fact that Chinese companies are selling solar products in Europe at 60% to 80% below their full cost. Now we call on the EU to launch an investigation into China’s illegal subsidies designed to take over European and global markets,” concluded Nitzschke.
Interestingly, conference speakers at EU PVSEC in Frankfurt this week all concurred that the trade cases launched by the US and European manufacturers will put off investors, continuing the deterioration of an industry already under a lot of pressure to stay afloat.
The Alliance for Affordable Solar Energy (AFASE) has released a statement warning against putting up protectionist walls around the European solar market.
As with EU ProSun, who registered its official complaint with the EU Commission this week, AFASE also credits itself as being a “prominent voice” for the solar industry arguing against imposing duties on Chinese manufacturers.
“We have seen great support for our cause over the last months. There is widespread opposition against punitive duties among the many European solar companies, industry experts and politicians. Also, the German chancellor Angela Merkel has prominently called upon the European Commission and other parties involved solving the conflict through political dialogue”, says Greg Spanoudakis, AFASE spokesperson.
Anti-protectionist measures has been a running theme this week at EU PVSEC in Frankfurt, with many stating that this would taint the renewable energy sector’s reputation, furthering PV’s current financial crisis.
“A typical solar project today would take equipment and raw materials from Germany, transform them into solar energy systems in China, use a Dutch logistics provider to deliver them to project developers in Italy and Germany. There Italian and German engineers would install the solar systems on the spot. Free markets are the prerequisite to maintain the leading position of the European solar market”, explains Thorsten Preugschas, CEO of the German operating project development company and AFASE affiliate Soventix.