EU will impose hefty duties on Chinese solar panels

Provisional punitive import duties to come into force on June 6.

European Union Trade Commissioner Karel De Gucht is prepared to recommend placing duties on solar panels from China in a protectionist move that could spark retaliation from Beijing. The case is the biggest handled by the Commission.

The initial EU duties on Chinese solar panels are likely to be set at 30% and above, which would make Chinese exports far less attractive in Europe. Prices for Chinese-made panels are currently as much as 45% lower than those made in Europe, industry executives say.

The move to levy duties would still leave the door open for a negotiated solution with China before December, and avoid levies that could be imposed for up to five years.

De Gucht is expected to tell his fellow EU commissioners tomorrow, Wednesday, that Brussels should levy the tariffs to guard against Chinese production that quadrupled between 2009 and 2011 to more than the entire global demand.

EU producers say Chinese companies have captured more than 80% of the European market from almost zero a few years ago, prompting the European Commission to act against this alleged dumping. Europe accounted for about half of the global solar market in 2012 that was worth US$77 billion.

The commission started an investigation in September 2012 when it judged there were grounds to proceed with a complaint by German and Italian companies. They accuse China of subsidizing its producers with easy credit to push output to more than 20 times the level of Chinese consumption.

De Gucht now believes there is clear evidence of dumping on the EU market, and will propose the measures at a gathering of trade specialists from all EU countries who are expected to back them.

Germany, the United States and China are the world's biggest solar markets and companies are in a race to win contracts as countries seek to limit pollution and global warming.