The cost of EU inaction
If the European Union doesn’t react to the predatory behaviour of Chinese solar manufacturers, there will be significant costs to our environment, economy and society:
- Thousands of people in Europe will lose their jobs. Those affected will not only be the highly educated and qualified employees of the manufacturing companies, but also researchers and other expert jobs requiring specialized skills. The EU will be only left with unspecialised jobs in transport, installation and maintenance. These will however also be endangered in the long term if China fully dominates the market
- All the investment that was made into developing the world’s leading solar technologies will be lost to China including: huge investments into research and development; academic education of researchers and training for skilled workers in the field of renewable energies; as well as investments made into building world-leading fully automated factories.
- If the European PV solar manufacturing industry ceases to exist, there is no hope of rebuilding this industry in the EU ever again. This is due to the extremely high market entry barriers (high investment in research and facilities), but also the fear that any such attempt will be directly squeezed out by Chinese unfair market practices.
- If China becomes a de facto global monopoly, it will have an adverse effect on the innovation and affordability of the entire sector globally. With no competition there will be no incentives for China to develop new technologies or lower prices.
- Renewable energies are supposed to be a sustainable solution that will allow the EU to become independent from imports. However if solar PV and possibly all European manufacturers of renewable energy products soon disappear, EU renewable energy production will become fully dependent on Chinese imports.
Massive state subsidies are "squeezing out" European wind and solar companies from China’s renewables market, the head of EU Trade Commissioner Karel De Gucht’s cabinet has said, adding that court action should be considered against barriers to trade. “We should use all the tools we have at our disposal to tackle barriers that distort the market,” Marc Vanheukelen told a European Policy Centre meeting. Source Euractiv 21 March 2012
- If Europe doesn’t react, this will send a clear message to the Chinese government that we tolerate predatory market behavior and accept losing our strategic industries to China. China is now consequently restructuring and moving away from its status as a cheap labour producer of textiles and other simple products in order to become a world leader in the newest technologies. With the huge financial resources China has at its disposal, it can afford to apply unfair practices and push competitors out of the market globally. PV solar is just one example, but Chinese ambitions will surely not stop here. There are currently already about 50 EU trade defence measures in force on Chinese products. EU ProSun calls for the EU not to give up on its principles of fair competition due to Chinese political pressure or threats of retaliation.
- If EU accepts that China takes over PV solar manufacturing - a very healthy and globally competitive industry, then what is the future for other European industries?
- The EU has very high environmental standards and goals, with 2020 energy targets the region is a global model of sustainability. However if PV solar production is fully given away to China, then Europe will in fact base it’s high environmental standards on imports from a country that didn’t sign the Kyoto protocol, has the highest CO2 emissions in the world and doesn’t meet the environmental production standards.
In China there is lack of industry regulation and consistent production standards: local governments rush to launch various solar PV manufacture programs in order to develop new energy industries; to attract investment, relevant government departments and industrial parks sometimes lower “three waste” discharge requirements and ineffectively enforce environmental standards; and supporting pollution treatment facilities are inadequate. These factors contribute to the environmental hazards of the solar PV industry. Demand exceeds supply in the early stage of the development of polysilicon industry and thus enterprises ignore environmental standards in order to make more benefit. In comparison to the rest of the globe, the Chinese solar PV industry started relatively late, which means capacity and facilities are still underdeveloped. Source: GREENPEACE “Unraveling the puzzle that is solar PV pollution” Report March 2012.