Chinese Import Tariffs Debate - Open Market Will Benefit Industry As A Whole Says Eaton
- Published: Monday, 17 June 2013 20:01
Commenting on the debate which is currently raging¹ concerning the European Commission’s placing of import tariffs on solar panels Richard Molloy, Renewable Energy spokesperson for Eaton UK said, “Opinion is divided with vehement views on either side of the debate.
We, along with much of the industry, believe that this imposition of duty will be damaging to the continued growth of the solar market throughout Europe. We can appreciate the frustrations of the European solar panel manufacturers in seeing their products undercut by Chinese products, which are allegedly subsidised by the state. That said, we encourage Karel De Gucht, EU Trade Commissioner² to take a more holistic view. The solar market needs to be very competitive price-wise in order to sustain its growth and the downstream jobs which are created for installers and equipment manufacturers such as Eaton are significant.”
The solar market in the UK has seen a huge amount of volatility over the last two years with the Feed In Tariffs and now the Renewable Obligations Certificates all having enormous positive impacts on the growth of the market. “The solar market is a peculiar one” says Richard Molloy “in that it is amazingly sensitive to changes in market conditions concerning price. As a company that both manufactures products and installs equipment for residential, commercial and large-scale solar parks we are in touch with a good deal of the supply chain. When legislation or market forces negatively impact the price the project pipeline falls off a cliff. The funding mechanisms in place all have a built-in downward trajectory and have no ability to increase support levels when prices go up so the effect is too negative ”
The decision to impose tariffs came after a nine month investigation, launched in September 2012, during which the Commission found that Chinese companies are selling solar panels to Europe at far below their normal market value causing significant harm to EU solar panel producers. The Commission believes that the fair value of a Chinese solar panel sold to Europe should be 88% higher than the price to which it is actually sold. The dumped Chinese exports exerted undue price pressure on the EU market, which has a significant negative effect on the financial and operational performance of European producers.
The duties will be imposed in two stages, starting with 11.8% for the first two months and followed by 47.6% for another four months. In total, this provisional duty will be in place for a maximum of 6 months which the commission believes will ensure the continued development of an innovative green energy sector in the EU.
The Commission will now continue its investigation and hear the views of all interested parties. It remains ready to intensify talks with China to find alternative satisfactory solutions through a negotiation. On 5 December at the latest, the EU will have to decide if definitive anti-dumping duties will be imposed for up to of five years.
In conclusion Richard Molloy stated, “As I have said we believe that an open market is the best approach and see many downsides to imposing these duties. Indeed the imposition of tariffs has already seen a response from the Chinese regarding tariffs on French wine into China. The ramifications could affect a wide range of non-directly related industries. In any case, the UK solar industry has repeatedly proven itself to be extremely resilient in the face of ever-changing market forces and we are certain that this will be no exception. Most people are still maintaining a positive outlook on the continued growth of the market, especially in the booming large-scale sector.”