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European Commission Wants 3 Chinese Manufacturers (Canadian Solar, ET Solar, & Renesola) Removed From Minimum Price Agreement, Citing Breaches Of Agreement

Canadian Solar, ET Solar, and Renesola may soon be removed from the minimum price agreement framework between the EU and China, owing to the European Commission’s (EC) desires. In the proposal, the EU cited various breaches of agreement undertaken by the 3 Chinese companies — as well as circumstances that make the enforcement of the agreement “impracticable.”

The recent proposal was outlined in a paper published last week by the EC, where it stated the desire “to withdraw the (MIP) undertaking for three exporting producers.”

What this means is that, if removed, the 3 companies will have to pay anti-dumping duties on solar exports to Europe — these currently would average around 47%. That, as you can guess, would likely send the companies elsewhere — making Europe uneconomical for them.

The “breaches of agreement” in question were outlined by the European Commission’s Directorate General for Trade as being: breeches of import volumes, the supply of additional “benefits” to customers, the use of “original equipment manufacturers” (OEMs) outside of the agreement, and the inclusion of products covered by the agreement as part of solar projects — as well as unreconciled discrepancies in reporting.

EU flag


 

A quick overview:

  • The commission contends that Canadian Solar “provided certain benefits to several customers, which were not listed in their quarterly report submitted to the Commission pursuant to the undertaking” — effectively leading to a breach of the minimum price.
  • That Canadian Solar conducted parallel sales of solar modules imported both before and after the agreement went into effect. “These sales exceeded substantially the marginal percentage limit of total sales to the same customer authorized by the undertaking (agreement).”
  • Canadian Solar’s use of specific OEMs outside its monitoring scope also constituted a breach, according to the commission.
  • According to the commission, ET Solar sold products covered by the agreement as a “bundle of goods and services” in the form of solar parks (projects) — without reporting the solar modules sold as a park in quarterly reporting.
  • “Furthermore, the sale of complete solar parks constitutes a parallel sale of the products covered and the products and services not covered by the undertaking to the same customers.” Owing to these and other practices, the commission claims that monitoring for compliance would be impracticable.
  • ReneSola’s use of a “web” of various OEMs is the primary cause of the company’s breach of the agreement, according to the commission. ReneSola, reportedly, at times imports solar cells from third parties through associated companies in countries not covered by the agreement. This makes it impracticable to monitor for compliance, according to the commission. Discrepancies between ReneSola’s reporting and associated third-party importers was also noted by the commission.
  • “The Commission analyzed these inconsistencies between ReneSola’s undertaking reports and actual sales transactions and concluded that ReneSola has breached its reporting obligation under the undertaking.”

Despite these breaches (as contended by the commission), the paper published by the commission concludes that no “systematic breaches” were found — and that responsibility therefore lay with the manufacturer’s themselves, not the Chinese government.

Image: EU flag via Shutterstock

 
 
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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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