Electrical Equipment / Components & Telecoms

Are Chinese photovoltaic practitioners taken away in Germany? Or as a case, it does not affect the Sino European trade of photovoltaic products! Recently, the news that executives of Chinese photovoltaic companies have been taken away by relevant German departments has caused industry shock.

According to media reports, on the evening of June 12, when many Chinese photovoltaic practitioners went to Germany to attend the 2023 International Solar Energy Technology Fair in Munich Airport, they were taken away by the staff of relevant German departments.

In response to this, the China Photovoltaic Industry Association made an emergency response on its official WeChat account in the early morning of June 13th, clarifying that the parties involved were only assisting in the investigation and have now returned to the hotel. This time, only one person assisted in the investigation, not involving multiple Chinese photovoltaic companies that were spread online, and there have been no instances of multiple personnel assisting in the investigation. The China Photovoltaic Industry Association stated that it firmly upholds the legitimate rights and interests of Chinese photovoltaic enterprises, and also reminds enterprises to pay attention to complying with local laws and regulations.

It is reported that the executive of an unlisted photovoltaic module manufacturing enterprise in Jiangsu was taken away. The German police said that the prosecutor's office in Augsburg, Germany, issued a pre-trial detention order for this person. At 14:00, this person was taken to the judge of the Augsburg District Court, but under certain conditions, the arrest has been suspended.

On the evening of June 12th, at 17:30 local time in Munich, the party involved had already informed the media by phone that they had "been called by them to investigate and have come out", and since then, they have also participated in the meeting normally. However, a colleague revealed that the passport of the person involved has been detained by the German side, and returning to China may take some time to process.

Are Chinese photovoltaic practitioners taken away in Germany? Or as a case, it does not affect the Sino European trade of photovoltaic products! The investigation of executives or individual cases does not affect the Sino European trade of photovoltaics

There are different opinions about the reason why the executive was investigated. Some people speculate that it is due to visa problems or the "Triangular trade", which is suspected of violating relevant German laws and regulations. Some people also speculate that it is related to the "dual countermeasures" measures taken by Germany before. A participant revealed that the investigation of the executive is a historical legacy of previous price commitments, and some companies that violated the regulations at the beginning need to pay taxes.

The "double anti-dumping" measures came into effect in December 2013. The EU announced that it would impose up to 64.9% of Dumping (pricing policy)#Anti-dumping actions duties and up to 11.5% of countervailing duties on solar panels imported from China for a period of two years. At the end of 2015, the EU extended this dual countermeasures until September 3, 2018. In 2013, China and Europe also signed the Minimum Import Price (MIP) commitment agreement for photovoltaics. The agreement requires companies to sell solar energy products to Europe at prices higher than the minimum import limit, and the annual sales volume must be limited to a certain quota; Manufacturers outside the agreement are required to pay 47.6% of the tariff.

Are Chinese photovoltaic practitioners taken away in Germany? Or as a case, it does not affect the Sino European trade of photovoltaic products! Industry insiders have stated that there are trade loopholes in the EU's "dual anti" policy. If enterprises enter the EU from third-party countries or regions, they can avoid paying tariffs for the "dual anti" policy. Relevant German departments believe that such behavior is suspected of smuggling and violates price commitments, and may require the originally violating enterprises to pay taxes.

During the 2019 Intersolar Europe exhibition in Munich, Germany, Chinese photovoltaic practitioners were taken away by relevant German authorities for investigation. According to German photovoltaic media PV magazine, German customs officials arrested two Chinese citizens during the Intersolar Europe exhibition held in May 2019 for commercial smuggling of solar modules and illegal evasion of the minimum price MIP implemented by the European Union before September 2018.

Industry insiders generally expressed no need to worry excessively about this incident. SEMI China Photovoltaic Standards Committee Joint Secretary General Lv Jinbiao stated that the "dual anti" measures have only been implemented for 5 years and have been lifted. In recent years, there have been no barriers to photovoltaic trade between China and the European Union, including Germany's import of polycrystalline silicon from China, which is not restricted. He believes that this should be a case caused by a few small enterprises operating irregularly. In terms of exports, large enterprises, especially leading listed companies, are very standardized and experienced in international trade. It is expected that this event will not have an impact on China's subsequent export of photovoltaic products to the European Union.

Liu Yiyang, Deputy Secretary General of the China Photovoltaic Industry Association, also stated that this matter is an old case and does not need to rise to the entire photovoltaic industry, let alone involve normal photovoltaic trade between China and Europe.

At present, insiders from several leading domestic enterprises such as GCL, Tianhe, and Longji have all stated that the company is not implicated in this incident.

Accelerating Energy Transformation in Europe, Digesting Nearly 50% of China's Photovoltaic Export Value

China's photovoltaic industry chain is relatively complete, and its products have outstanding advantages in production capacity, price, and other aspects when exported. In 2022, China's photovoltaic production has been ranked first in the world for 16 consecutive years. Europe is an important export region for China's photovoltaic enterprises.

Breaking free from energy dependence has been a long-standing issue in Europe for many years. According to relevant data in the BP World energy resources Statistical Yearbook (2021), oil and natural gas account for nearly 60% of the EU's energy consumption structure. According to the data of Eurostat, Europe's natural gas consumption in 2021 will be about 480 billion cubic meters, of which about 90% will be imported, and the import dependency of EU crude oil and petroleum products will also reach 91.67%.

After the conflict between Russia-Ukraine conflict, the prices of natural gas and oil in Europe rose sharply, which led to the soaring electricity prices in various countries. Europe paid more attention to energy security and clean energy strategies, and accelerated the pace of energy transformation.

In 2022, the "REPowerEU Plan" released by the European Commission raised the previous installation target, suggesting that the cumulative photovoltaic installation scale in the EU should exceed 320GW by 2025, a doubling of the cumulative installed capacity of 167GW by the end of 2021; The cumulative target for photovoltaic installation in 2030 is approximately 600GW, which is almost double that of 2025.

This has stimulated further growth in the demand for photovoltaic products in Europe. According to data from the China Photovoltaic Industry Association, the total export volume of photovoltaic products in China exceeded 512 billion US dollars in 2022, with Europe accounting for 46%. At the same time, in 2022, China's photovoltaic product exports to various continental markets showed varying degrees of growth, with the European market experiencing the largest growth rate, with a year-on-year increase of 114.9%.

As a leader of the European Union, Germany's energy transformation is also at the forefront of the EU. According to SolarPower Europe data, Russia ranked first in terms of photovoltaic installation among European countries in 2021, and Germany proposed to achieve 100% renewable energy supply and abandon fossil fuels by 2035 in 2022.

However, the European Union has launched a series of policies to localize photovoltaic manufacturing. In March of this year, the European Union issued proposals for the "Net Zero Industry Act" and the "European Key Raw Materials Act". The core goal of the proposal is to increase the domestic production capacity of key green industries such as photovoltaics and batteries to 40% by 2030.

In addition, the above proposal sets that the annual consumption of strategic raw materials from a single third-party country should not exceed 65%, and related products from countries above 65% will be downgraded in bidding evaluation, and the purchaser of this product will have more difficulty obtaining government subsidies.

Some analysts believe that the fundamental purpose of the EU's policy is not to restrict China, but to benchmark the US Inflation Reduction Act (IRA) to ensure that domestic manufacturing is not "taken away", and the bill should not have a substantial impact on Chinese companies in the short term. Some industry insiders have also suggested that building factories in Europe is a good option to avoid the restrictions of the Net Zero Industry Act on a country's products not exceeding 65% of the European market share.