Punitive duties on solar products to hurt EU economy

BRUSSELS - Head of the world's largest monowafers Tuesday said the European Union could suffer economic damages if it decides to impose punitive duties on imported Chinese solar products.

"EU industry would suffer, causing bankruptcies and unemployment," said Li Zhenguo, board chairman of Xi'an LONGi Silicon Materials Corporation, the world's top producer of one of the key components of solar panels.

Li was speaking to Xinhua in Brussels where he attended a hearing at the European Commission earlier Tuesday, aiming at the exclusion of monowafers from the anti-dumping and anti-subsidy probe the Commission launched last year.

Imposing punitive duties on Chinese solar products might benefit EU counterpart producers, but the downstream operators, which consume solar products, including installers, project developers, construction companies, would be dealt with a heavy blow, Li said.

"I believe, if the EU decision-makers are wise enough, they should refrain from imposing punitive duties on Chinese products," he said.

Li's words echoed a study published by the Alliance for Affordable Solar Energy?in February, a coalition of more than 180 European companies that consume solar products.

The research found that punitive tariffs against imported Chinese solar products will lead to "very significant job losses" for the EU.

A punitive tariff of 60 percent against China's solar products would lead to 193,700 job losses in the EU during the first year of the tariff's imposition, and the number could add up to 242,000 in the third year, according to the study.

The potential positive impact of duties for the EU solar producers is dwarfed by the negative impact on employment in the EU, as the jobs created by the EU producers as a result of the tariffs "represent at the very most 20 percent of the jobs lost along the industry's whole value chain.

Li said the current budget restrictions in some EU member states could make things worse for Europe's solar industry.

"Any punitive duties would come at the worst possible time and could exacerbate the negative impact on the industry due to the inevitable price rises in the market," Li said.

He pointed to monowafer panels, which are used mostly for rooftop applications due to their high efficiency, as a particular case where imposition of punitive duties would also hinder the EU's attempt to reach its 2020 greenhouse gas emission reduction targets.

"The EU is already struggling to achieve these targets. Blocking access for competitively priced photovoltaic technologies will lead to less PV growth in the EU, and ultimately to increased greenhouse gas emissions," Li said.