EU-China trade deal includes fluctuating price guarantee: Chinese official

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The terms of the EU-China trade deal does not set a flat rate for the minimum import price of solar panels from China, a senior Chinese industry official has said.

Sun Guangbin, secretary general of solar energy & PV products at the China Chamber of Commerce (CCC), the lead negotiating body for Chinese solar manufacturers in the trade dispute, told PV Tech that the figure would be determined by a formula set out in the agreement that will fluctuate with the prevailing market conditions.

This would ease concerns in the industry in Europe that prices would not be able to regress as costs – and subsidy support ­– decrease.

“The CCC and European Commission have already signed a price guarantee agreement, which now needs to be confirmed by EU member countries before details are announced. The price isn’t fixed; the promised price will be adjusted at any time, having only one price makes no sense,” he said. 

PV Tech has been unable to confirm the presence of a price formula with a second source.

“We will have a base price shortly. But for example, when the market fluctuates at a certain percentage, the price will change according to the size of that fluctuation. There won’t be a fixed price for this year and next year, it’s not the same concept,” added Sun.

It has been widely reported in the media that a minimum import price for Chinese solar panels of €0.56 per Watt has been set with no more than 7GW of product entering the EU market from China annually.

Sun said these reports were not entirely accurate.

The deal was agreed on Saturday with the proposed terms circulated among manufacturers in China by email, Sun revealed.

He also said that the Chinese side of the negotiations had been led by the industry rather than the government.

“The price guarantee work is just an agreement between industry, industry organisations and the business, it has no relationship with the government. The government does not participate in any works related to the price guarantee,” said Sun.

The trade dispute is the largest by value of goods between the EU and China.

Speaking at a press conference today, the European trade commissioner Karel De Gucht confirmed that the ‘amicable’ deal involves a minimum price as well as a market cap, and that it will last until the end of 2015.

Various media outlets have reported that the deal stipulates a minimum price of €0.56W with a market cap of 7GW (60% of the EU market). However, PV Tech understands that this is not necessarily the case.

De Gucht confirmed that the anti-subsidy investigation that had been running alongside the anti-dumping investigation would continue, he said: “We will translate what has been agreed in anti-dumping case into anti-susbidy case. If we were to suddenly stop it and act like it didn’t exist then that would be an excellent loophole.”

Contrary to reports, De Gucht also confirmed that China would not cease its investigation into the EU’s exportation of polysilicon as a result of the deal.  

The Alliance for Affordable Solar Energy (AFASE) and EU ProSun, which has been pushing for duties against China, have both objected to the terms of the deal, with EU ProSun readying legal action – a move that De Gucht suggested would not be successful.

Milan Nitzschke, president of EU ProSun explained: “The agreement between the European Commission and China is contrary in every respect to European law. The agreement endangers the very existence of the European solar industry, which has already lost 15,000 jobs due to Chinese dumping and illegal Chinese state subsidies, and now is at risk of losing remaining producers in Europe.”

Nitzschke added: “It appears rather that there was only a desire to bring the proceedings to a quick end. Throughout the negotiations, China appears to have blackmailed and mocked the EU.”

A spokesman from AFASE told PV Tech: “From our point of view they [the minimum price and market cap] are not sustainable and don’t take into account the need to offset tariff cuts.”

He went on to note that before the EC imposed the mandatory registration of Chinese-imported solar panels  the cost of modules stood around €0.45-46/W, with some even as low as €0.38/W.

The spokesman concluded: “The top line is that this is not good news and in the UK that must be the case more so than anywhere else.”

Commenting on the dissatisfaction of both sides, De Gucht said: “When no one agrees in politics then it usually means that you are somewhere in the middle.”

Additional reporting by Peter Bennett and Cathy Li.

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