en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe is to launch a probe into suspected illegal subsidies provided to Chinese wind turbine producers by its government as the European wind sector suffers against cheap imports.
The investigation was announced by European Commission (EC) executive vice-president, Margrethe Vestager, at a lecture at Princeton University in the U.S. where she compared what's happening in the wind sector to what happened to Europe's domestic solar industry. The investigation joins another launched last year into Chinese-made electric vehicles (EVs) and a soon to be announced probe into medical devices. "I can announce today that we are launching a new inquiry into Chinese suppliers of wind turbines," Vestager said. "We are investigating the conditions for the development of wind parks in Spain, in Greece, in France, in Romania and in Bulgaria."
She added: "We saw the playbook for how China came to dominate the solar panel industry. First, attracting foreign investment into its large domestic market, usually requiring joint ventures. Second, acquiring the technology, and not always above board. Third, granting massive subsidies for domestic suppliers, while simultaneously and progressively closing the domestic market to foreign businesses. And fourth, exporting excess capacity to the rest of the world at low prices. The result is that nowadays, less than 3% of the solar panels installed in the European Union (EU) are produced in Europe. We see this playbook now deployed across all clean tech areas, legacy semiconductors, and beyond - as China doubles down on a supply side support strategy, to address its economic downturn. Our economies cannot absorb this. It is not only dangerous for our competitiveness. It also jeopardizes our economic security. We have seen how one-sided dependencies can be used against us. And this is why Europe, just as the U.S., is reacting."
She also recognized the role that both the COVID 19 pandemic and Russia's invasion of Ukraine had played in showing Europe and the U.S., how heavily both depend on third countries for critical technologies, and the raw materials needed to produce them. In that respect, China has built up a strong position, she said, and is "not always playing fair. China is for us simultaneously a partner, an economic competitor, and a systemic rival. And the last two dimensions are increasingly converging."
China's Minister of Commerce, Wang Wentao, questioned the "protectionist" decision: "We can't understand how the European Commission on the one hand carries the flag for green sustainable development and on the other hand undertakes protectionist operations."
The investigation was welcomed by Europe's leading wind industry association, WindEurope: "We fully understand the Commission's rationale," said chief executive officer, Giles Dickson. "Chinese wind turbine manufacturers are offering much lower prices than European manufacturers and incredibly generous financing terms with up to three years deferred payment. You can't do that without an unfair public subsidy. What's more the European manufacturers aren't allowed to offer deferred payment like that under OECD rules." He explained that Chinese wind turbines are being offered in Europe at up to 50% lower prices than Europe-made turbines. "The deferred payments effectively mean that Chinese manufacturers offer their turbines for free until the wind farm operator has 3 years of revenues." In recent weeks the EC has also launched investigations under its Foreign Subsidies Regulation against foreign companies suspected of being given unfair advantages. This has included suspicious bids in a public tender for trains in Bulgaria, resulting in a Chinese state-owned company withdrawing its bid. Earlier this month, it opened investigations into bids by Chinese companies that may have been "unduly advantaged" in a public tender for solar panels in Romania.
Last week, Industrial Info reported that one in four of all EVs sold in Europe this year will be made in China. Chinese-manufactured EVs accounted for almost 20% in 2023 but are now on track to hit 25% this year according to research from Transport & Environment (T&E), a leading European clean-transport organization. The news comes at a time when the EC is considering imposing a tariff on Chinese EVs to protect EU vehicle companies. For additional information, see April 15, 2024, article - Chinese-Made EVs Dominating European Market.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The investigation was announced by European Commission (EC) executive vice-president, Margrethe Vestager, at a lecture at Princeton University in the U.S. where she compared what's happening in the wind sector to what happened to Europe's domestic solar industry. The investigation joins another launched last year into Chinese-made electric vehicles (EVs) and a soon to be announced probe into medical devices. "I can announce today that we are launching a new inquiry into Chinese suppliers of wind turbines," Vestager said. "We are investigating the conditions for the development of wind parks in Spain, in Greece, in France, in Romania and in Bulgaria."
She added: "We saw the playbook for how China came to dominate the solar panel industry. First, attracting foreign investment into its large domestic market, usually requiring joint ventures. Second, acquiring the technology, and not always above board. Third, granting massive subsidies for domestic suppliers, while simultaneously and progressively closing the domestic market to foreign businesses. And fourth, exporting excess capacity to the rest of the world at low prices. The result is that nowadays, less than 3% of the solar panels installed in the European Union (EU) are produced in Europe. We see this playbook now deployed across all clean tech areas, legacy semiconductors, and beyond - as China doubles down on a supply side support strategy, to address its economic downturn. Our economies cannot absorb this. It is not only dangerous for our competitiveness. It also jeopardizes our economic security. We have seen how one-sided dependencies can be used against us. And this is why Europe, just as the U.S., is reacting."
She also recognized the role that both the COVID 19 pandemic and Russia's invasion of Ukraine had played in showing Europe and the U.S., how heavily both depend on third countries for critical technologies, and the raw materials needed to produce them. In that respect, China has built up a strong position, she said, and is "not always playing fair. China is for us simultaneously a partner, an economic competitor, and a systemic rival. And the last two dimensions are increasingly converging."
China's Minister of Commerce, Wang Wentao, questioned the "protectionist" decision: "We can't understand how the European Commission on the one hand carries the flag for green sustainable development and on the other hand undertakes protectionist operations."
The investigation was welcomed by Europe's leading wind industry association, WindEurope: "We fully understand the Commission's rationale," said chief executive officer, Giles Dickson. "Chinese wind turbine manufacturers are offering much lower prices than European manufacturers and incredibly generous financing terms with up to three years deferred payment. You can't do that without an unfair public subsidy. What's more the European manufacturers aren't allowed to offer deferred payment like that under OECD rules." He explained that Chinese wind turbines are being offered in Europe at up to 50% lower prices than Europe-made turbines. "The deferred payments effectively mean that Chinese manufacturers offer their turbines for free until the wind farm operator has 3 years of revenues." In recent weeks the EC has also launched investigations under its Foreign Subsidies Regulation against foreign companies suspected of being given unfair advantages. This has included suspicious bids in a public tender for trains in Bulgaria, resulting in a Chinese state-owned company withdrawing its bid. Earlier this month, it opened investigations into bids by Chinese companies that may have been "unduly advantaged" in a public tender for solar panels in Romania.
Last week, Industrial Info reported that one in four of all EVs sold in Europe this year will be made in China. Chinese-manufactured EVs accounted for almost 20% in 2023 but are now on track to hit 25% this year according to research from Transport & Environment (T&E), a leading European clean-transport organization. The news comes at a time when the EC is considering imposing a tariff on Chinese EVs to protect EU vehicle companies. For additional information, see April 15, 2024, article - Chinese-Made EVs Dominating European Market.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
