Greenovation Hub opposes the EU’s proposal to impose punitive anti-dumping tariffs on imports of Chinese solar photovoltaic (PV) products, and we believe it is an unwise ruling. It not only fails to save the European industry, but will also give rise to 240,000 job losses in Europe . While the world is suffering from increasingly frequent and severe extreme weather and natural disasters caused by climate change, it is of increasing importance to promote the use of renewable energy to abate climate change. The solar PV industries in countries across the world are all in the early stages of development, and these rash tariffs for the purpose of trade protection, even though provisional, are certain to increase the solar PV cost for Europe and the whole world. This is a heavy blow to a growing market. It will shake the solar photovoltaic supply chain in Europe, bring long-term negative impacts to the industry, and sabotage the proposal made by the EU that renewable energy will account for 20% of total energy consumption by 2020.
Last year, Greenovation Hub made an analysis of the EU’s “anti-dumping” and “anti-subsidy” investigations into imports of Chinese solar products , which pointed out that the anti-dumping rules designed to protect fair competition had been abused for the purposes of trade protectionism. The purpose of this statement is not to evaluate whether this ruling is right or wrong, although we believe that the mechanism has been utilized by the EU for trade protection. From a global perspective, it can be seen that there are many cases where it has been suggested that countries have utilized WTO mechanisms to protect their own industries and challenge the renewable energy policies of other countries. This illustrates a clear conflict between climate governance and trade protectionism – something which needs to be urgently addressed. If this is not resolved, it will lead to further disputes, which will undermine mutual trust and goodwill, directly or indirectly influence the communication process of climate negotiations and the potential positions and attitudes of both parties, and hinder countries from abating and adjusting to climate change.
At a meeting of the State Council chaired by Premier Li Keqiang on June 14th, ten measures were agreed to curb air pollution, and the Council discussed ways to foster the healthy development of the solar PV industry. The meeting introduced six measures to promote the development of the industry , and stated: “the Government must support the solar PV industry to overcome the difficulties and achieve healthy growth. We must strive to consolidate international markets; at the same time, we must devise reformed methods to bring market mechanisms into full play and stimulate effective demand in the domestic market and bring industry innovation to the next level.”
Greenovation Hub welcomes such guiding policies, as we can see that the government has reflected on the previous support policies and acted in a proactive way to adjust and improve them. The development of the solar PV industry requires support from the governments of all countries. Subsidies from public funds should be devoted to technical innovation that secures people’s livelihood, protects the environment and reduces climate change, rather than heavy investment in fossil fuels that result in high pollution and high emissions, such as petroleum and coal. Subsidies to the solar PV industry not only boost domestic employment and competiveness in the industry, but they are also an indispensable way to enhance countries’ ability to tackle climate change. It is crucial for the healthy development of China’s solar PV industry that consumption is subsidized rather than production. At the same time it is important to remove the barriers preventing solar power connecting to the electricity grid, in order to foster a domestic solar PV market characterized by strong demand and fair competition.
Greenovation Hub believes that to support the solar PV industry, China should go beyond the markets in China, the United States and Europe, and expand to other potential markets in the world. China could help to develop and expand global solar PV through bilateral and multilateral cooperation, together with policy support as well as proper funding. With sufficient funds and industry development, the cost of PV is certain to decrease due to the economies of scale and industry learning curve. At the same time, as the world acts with increasing urgency to tackle climate change and ensure environmental protection, the higher cost of fossil fuel energy will become internalized and prices will rise, and an era of parity for solar PV generation grid-connection will soon follow.
We believe that subsidies will not be necessary forever, nor do they create a distortion of the market; rather, they accelerate the commercialization process of clean energy technologies, and exert a positive impact on international cooperation in fighting climate change. Pragmatically speaking, the ruling of “provisional anti-dumping tariffs” made by the EU will actually set aside some time for both parties to consult on this issue. Greenovation Hub hopes that the Chinese and European governments resume negotiation and dialogue, and seek proper solutions to this disagreement. The negotiation should involve not only the Ministries of Trade, but also the departments responsible for EU-China cooperation on climate change. This will require establishing a working group for EU-China high-level dialogue on renewable energy and trade cooperation. Through such a group, a long-term mechanism of participation and cooperation can be developed that involves governments, corporations and civil society groups in the process of developing renewable energy, and which encourages cooperation to improve the international trade rules. Through such a mechanism, all parties can work to seek solutions that are in the interests of the all parties, and collaboratively work towards tackling climate change.
