EU launches subsidy probe into Chinese solar PV firms

5 months ago 35

The European Union has launched a probe into whether subsidies allowed Chinese firms to submit unfair bids for the construction of a Romanian solar panel park, in the second application of a new trade protection law in one week.

In 2023, the EU adopted the Foreign Subsidies Regulation, which allows Brussels to probe companies bidding in public tenders in the bloc larger than €250 million.

In the case of a massive 110 MW solar park in Romania, the European Commission has launched a probe into whether two Chinese companies bidding for the contract are recipients of foreign subsidies.

“The two new in-depth investigations on foreign subsidies in the solar panel sector aim to preserve Europe’s economic security and competitiveness,” said Internal Markets Commissioner Thierry Breton in a press release.

“Solar panels have become strategically important for Europe,” the Frenchman added.

The first bidding consortium affected is a Romanian company’s venture with the German subsidiary of Chinese solar power titan LONGi. The other bidder affected, Shanghai Electric, is 100% owned and controlled by the Chinese government.

Brussels now has 110 days, counting from 4 March when the bids were submitted, to ascertain whether the “alleged foreign subsidies” may have allowed the Chinese companies to “submit an unduly advantageous offer;” the Commission said.

At the conclusion of the investigation, the EU’s executive can accept any commitments made by the companies to remedy the situation, block the bid, or stay out of it.

It is, however, unclear whether it will come to this: When the foreign subsidies law was first applied, the Chinese railway company subject to the probe summarily pulled out of the Bulgarian tendering process.

If the probe does find that Chinese companies benefited from subsidies, they can suggest ‘remedy’ measures to counter any unfair competitive advantage. The Commission can accept or reject these proposals, or it can block the contract from being awarded.

Imports of solar panels from abroad are often considered crucial by Brussels for the achievement of the EU’s climate goals. In early March, Energy Commissioner Kadri Simson downplayed the prospects of stringent tariffs on Chinese imports while stressing the need to “support our industry”.

At this stage, it remains to be seen if project-specific subsidy probes are the new way of doing things.