Chinese leaders have proposed that the anti-dumping dispute over supply of solar photovoltaic (PV) modules to Europe be resolved through negotiations to avoid losses on both sides.
The European Union (EU) would require Chinese modules to be registered at customs from April this year.
Chinese module manufacturers have been facing anti-dumping investigations in several countries including the US and India. Last October, the US announced anti-dumping and anti-subsidy duties on Chinese solar manufacturers. This has led the Chinese government to extend support to the domestic solar power sector. It has significantly increased the national target to install solar power capacity and plans to have an installed solar power capacity of 21 GW by 2015.
With the Chinese manufacturers facing possible import duties, demand for Taiwanese solar panels has increased significantly over the last two month. The manufacturers expect to see continued demand over the next two months as well.
Chinese manufacturers have been facing anti-dumping regulations in a number of countries but the government officials have proposed negotiations with EU officials only. Significantly, the EU is considering even retrospective levy of import duties on Chinese modules.
The EU, in the past, has responded positively to the demands and proposals by the Chinese officials to negotiate contentious environmental issues. The two sides held long discussions over the inclusion of Chinese airlines in the extended EU’s Emissions Trading Scheme (ETS). China and India were the only countries not to have submitted emissions data as required under the EU law. Finally, the EU budged and delayed the inclusion of non-EU airlines in the ETS for one year.
The outcome of the possible negotiations would be crucial to both sides. China is the world’s largest solar module manufacturer and EU is the world’s biggest solar market by capacity. A recent study showed that levying import duties on Chinese solar modules may actually cost the UK solar power sector billions of dollars can thousands of jobs as the cost of generation would increase.
One may assume that Chinese solar manufacturers have played a substantial role in the recent slide in generation costs and tariffs across the world. However, it is also essential that other countries too develop domestic manufacturing capabilities. Thus a balance of import duties and incentives to develop local manufacturing, and the best way of achieved this balance is through bilateral and multilateral negotiations.
Mridul Chadha currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.