Study warns of dire consequences from solar-product protectionism

Up to 240,000 European jobs in downstream businesses could be at risk, at a time of record unemployment, if the European Union levies anti-dumping tariffs against solar-product imports from China, a study released on Tuesday said.

Prognos, a Germany-based economic research organization, has presented the findings with the Alliance for Affordable Solar Energy in Brussels after the European Commission organized its first hearing on this case on Monday afternoon.

The downstream solar companies have also shown their "deep concerns" that Brussels' possible action will lead to a rapid price increase of solar imports, create a volatile market situation and severely hinder the competitiveness of European businesses in the solar industry.

Prognos has illustrated the impacts these measures could have on employment in the EU from 2013 to 2015 based on duties scenarios of 20 percent, 35 percent and 60 percent.

It said that a punitive tariff of 20 percent would cost 115,600 jobs in the EU in the first year after the implementation, and a further 175,500 job could be lost across the area in the third year.

A punitive tariff of 60 percent would lead to 193,700 job losses in the EU in the first year and up to 242,000 in the third year.

All the scenarios may happen amid a second economic recession in the EU after the 2008-09 global economic downturn. The jobless rate in the eurozone now is currently about 11 percent.

"The potential positive impact of duties for the EU solar producers is dwarfed by the negative impact on employment," said Thorsten Preugschas, spokesman for the Alliance for Affordable Solar Energy.

Preugschas, also CEO of the German project developer Soventix, told China Daily that he was among 60 people attending the Monday hearing, which lasted three and a half hours. He complained before Brussels officials, calling on Brussels to stop "political interference" in the solar industry.

"Our business plan is long term, but we have to cope with the political changes on a monthly or weekly basis," said Preugschas, adding that more than 80 percent of his solar models in his projects are from China.

The EU has labeled itself as a green-industry leader, and several countries have implemented policies of feed-in tariff subsidies, which have encouraged manufacturing expansion in China. In recent years, the subsidies have been phased out, and now Brussels has started to use protectionism to help its panel producers.

"We are in the situation that we (downstream businesses) have built competition and can survive without political support," Preugschas added. "But the problem is that the interference is coming on a monthly basis as European politicians change."

He said that his company has decided to expand project development outside Europe, which is in "political instability".

Brussels' decision to stage anti-dumping and anti-subsidy investigations of China's solar importers has led to mounting concern in Beijing.

EU trade spokesman John Clancy confirmed that the commission has held a hearing with representatives of the photovoltaic industry, with about 60 participants coming from all sectors of the industry and including both those companies that produce solar panels and those that fit the solar panels.

"This hearing is a normal administrative step, which happens regularly in trade defense investigations," said Clancy.

fujing@chinadaily.com.cn

(China Daily 02/20/2013 page13)