China Files WTO Dispute Against EU on Solar Power Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--China filed a complaint with the World Trade Organization (WTO) against subsidies provided by some European governments to solar panel makers. According to a statement from WTO, China alleges that certain measures affecting the renewable energy generation sector relating to the feed-in tariff programs of European Union (EU) member states, including but not limited to Italy and Greece, include domestic content restrictions and are inconsistent with the General Agreement on Tariffs and Trade from 1994.

In September, Brussels launched a probe into alleged "dumping" of solar panels by Chinese manufacturers. On October 8, the European Commission issued a respondents list for the anti-dumping investigation against Chinese solar firms. The list comprises 134 solar-component makers, whose products account for 80% of the total exports to the EU. Yingli, Suntech, LDK, Solargiga, JA Solar and Delsolar are listed as mandatory respondents for the investigation.

In late October, the U.S. said it would increase tariffs on solar cells imported from China. The Commerce Department said the rise was specifically designed to offset the subsidies China pays its own solar manufacturers. Solar and wind power, which have attracted heavy state support in many countries, have become one of the most contentious issues in global trade.

China exported nearly $27 billion worth of solar panels to the EU last year. Chinese companies have gained more than 80% of the market in Europe for solar goods compared with almost zero in 2004, according to EU ProSun, a group that represents European producers such as Solarworld, and that requested the dumping investigation in late July.

According to an EU report, China produces about 65% of solar panels worldwide. The increased competition from China has slashed profit margins, cut solar-panel prices, and led to bankruptcies in Europe. Germany's Q-Cells SE (QCE), once the biggest solar-cell makers, surrendered its lead in the past four years and sought court protection from creditors in April.

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