Chinese President Xi Jinping was in Europe until May 9 for a 6-day visit. The discussion agenda included the recently announced EU investigations into state subsidies to Chinese wind farms. European Union chief Ursula von der Leyen has announced that she would urge the Chinese president for competition with China that is "fair and not distorted." NedZero welcomes the investigations and has previously brought the danger of distortion of competition to the attention of the Dutch cabinet.
Illegal subsidies
On April 9, the EU announced it would investigate wind farms in five EU member states to determine whether illegal subsidies have been granted to Chinese wind turbine manufacturers. The European Commission will consider the conditions for the development of wind farms in Spain, Greece, France, Romania and Bulgaria.
The European Commission says it has evidence that certain wind manufacturers and other companies active in the internal market may benefit from foreign subsidies that give them an unfair advantage over their competitors and could lead to distortions of competition.
Chinese suppliers are benefiting from a booming European market, where developers last year ordered wind turbines capable of generating around 100 gigawatts (GW). This is roughly the equivalent of 100 average-sized European nuclear power plants with two reactors, according to research firm Wood Mackenzie . By comparison, the EU has set an annual average of 29 GW to meet its 2024 climate and energy targets.
The European investigations were announced in a speech in Princeton by the EU's chief competition enforcer, Margrethe Vestager. Vestager argued in the speech that Brussels should move away from fighting individual cases and instead use its full powers to defend European interests against unfair trade practices by China:
“We saw the playbook for how China dominated the solar panel industry. First, attracting foreign investment into its large domestic market, which usually requires joint ventures. Second, acquiring the technology, and not always fairly. third, providing massive subsidies to domestic suppliers while simultaneously and gradually closing the domestic market to foreign companies. And fourth, exporting excess capacity to the rest of the world at low prices.
We cannot afford that what happened with solar panels will also happen with electric vehicles, wind or essential chips."
Mandate
The matter will now be further investigated. Under the 'Foreign Subsidies Regulation', the European Commission has the mandate to investigate the existence and consequences of foreign subsidies and to impose regressive measures as soon as a distortion of competition has been identified.
European wind turbine manufacturers have long urged EU leaders to protect them from unfair overseas competition. In a wind energy 'action plan' published last October, the EU executive warned of possible future competition probes, alongside measures to tackle bottlenecks in licensing, skills shortages and access to key raw materials.
Responses from trade organizations
Reacting to the news, industry body WindEurope said Chinese suppliers are already encroaching on the EU market by offering turbines at half the price of domestic manufacturers. Director Gilles Dickson says he fully understands the Commission's thinking:
“Chinese wind turbine manufacturers offer much lower prices than European manufacturers and incredibly generous financing terms with payment deferrals of up to three years. This is not possible without unfair government subsidies.”
Jan Vos, chairman of NedZero, is also in favor of research:
“Just as happened in the past with solar panels, there is a great risk that the Netherlands will pay for innovation and that the Chinese will take away the market share. We have previously brought distortions of competition to the attention of the cabinet and are advocating for the North Seas Standard .”
Fair competition
The President of the European Commission, Ursula von der Leyen, said at the start of President Xi Jinping's state visit that she had previously made it clear to Xi that the current imbalances in market access are not sustainable and must be addressed. During his visit, she will, together with French President Macron, push for "fair" competition with China:
“We must take action to ensure competition is fair and not distorted.”Bekijk al het nieuws
