Trade complaints rife in renewable energy marketplace

Chinese solar manufacturers have retaliated against the U.S. government for its trade complaint against China for allegedly violating global trade rules.
Written by David Worthington, Contributor

China holds a monopoly on rare earth minerals, which are required to manufacture solar and wind energy products. It stands accused of unfairly subsidizing its domestic manufacturers. Materials costs is the highest portion of cost in solar cell manufacturing. Image credit: Wharton School, University of Pennsylvania

Notions of protectionism are spreading in the renewable energy marketplace. After levying trade complaints against China, the United States is now falling under Chinese scrutiny. Europe continues to scrutinize U.S. imports.

A domestic solar manufacturing trade group (China Photovoltaic Industry Alliance) has asked China’s Ministry of Commerce to investigate U.S. manufacturers for selling below cost. It is also drafting a complaint against U.S. government subsidies.

The cusp of the complaint is about American exports of polysilicon to China, which it claims has forced Chinese polysilicon factories to ramp down production.

China’s accusations come just after the U.S. Department of Commerce and the International Trade Commission took up a request by U.S. solar manufacturers to investigate China for illegally subsidizing its solar industry. China vowed that it would retaliate.

The complainants say that China is giving its domestic producers an unfair advantage through an illicit combination of cash grants, sweetheart loans, and tax incentives, in addition to currency manipulation and markdowns on raw materials.

An opposing U.S. solar trade group formed to advocate for global competition, which it says is making solar energy more affordable. It argues that blocking Chinese imports harms both the solar industry and its customers.

But that global competition is fomenting global trade complaints. The European Union announced that it was planning to probe U.S. bioethanol imports on Friday. It is considering using tariffs to raise the market price of U.S imports, according to reports.

The European Commission investigated U.S biodiesel subsidies in 2008, and began to impose duties (it calls them anti-dumping and countervailing measures) in 2009. It renewed its investigation again in 2010.

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