EU says subsidies may be letting Chinese firms compete unfairly for solar panel contract

The European Union has launched investigations into two groups of companies that include Chinese solar panel makers in the latest salvo against what it suspects is unfair competition from China’s vast manufacturing sector.

The European Commission, the EU’s executive arm, said Wednesday that it would assess whether foreign subsidies enabled the two consortia to submit “unduly” competitive offers when bidding for a contract to build and operate a solar park in Romania partly funded by EU money.

The two groups include subsidiaries of China’s LONGi Green Energy Technology Co. and Shanghai Electric Group Co., a state-owned enterprise.

“There are sufficient indications that both (consortia) have been granted foreign subsidies that distort the internal (EU) market,” the European Commission said in a statement.

The new investigations follow an EU probe into China’s state support for its electric vehicle makers and allegations by European biodiesel producers that China has been “dumping” the renewable fuel into the EU market — that is, exporting it at artificially low prices. The European Commission has said it may impose tariffs on Chinese biodiesel imports if dumping is confirmed.

Like biodiesel, solar panels are an important part of Europe’s efforts to transition to an economy powered by clean technologies.

Commissioner Thierry Breton, in charge of the EU’s internal market, said in the statement Wednesday that solar panels are “strategically important” for Europe — namely, “for our clean energy production, jobs… and security of supply.”

Jens Eskelund, president of the European Union Chamber of Commerce in China, voiced a broader concern last month, telling reporters: “Europe cannot just accept that strategically viable industries constituting the European industrial base are being priced out of the market.”

China, for its part, is not backing down.

Last month, Premier Li Qiang told the country’s parliament that China would focus on exporting more of its “new trio” of products, namely electric vehicles, solar panels and lithium batteries.

And, in January, China opened its own anti-dumping investigation into brandy imports from the EU.