Solar row shows co-operation is much needed

Solar row shows co-operation is much needed

The European Union is looking into complaints that Chinese-made solar panels have been flooding the economic zone. The union's investigation was triggered by European solar companies, which have cried foul about allegedly unfair trade practices by China. Mainland companies have captured most of Europe's solar market, and homegrown companies aren't happy.

The US already imposed duties on Chinese solar panels in May. European leaders are under pressure to follow suit by implementing similar tariffs. Yet some analysts are concerned such tariffs would undermine the EU's goal of turning solar energy into a fifth of all renewable energy sources on the continent by 2020.

The solar industry in China is heavily subsidised, but it also experiences severe overcapacity and has suffered heavy losses recently. Punitive tariffs in Europe could sink some Chinese manufacturers, yet they would likely still fail to benefit European solar companies.

This is because the EU, while being less committed than Beijing in subsidising its own solar industry, still pumps billions of dollars' worth of subsidies into dirty energy sources such as coal and oil. So simply slapping tariffs on Chinese companies without fostering infrastructure investment in solar energy at home would not help Europe's solar industry. In fact, the continent's progress towards cleaner energy sources might suffer.

At present, the EU is busy calculating the costs of different actions. Meanwhile, Chinese companies are eyeing Taiwan as a new potential major market for solar energy. In the end, solar energy will be needed to solve the world's energy problems. The question is how to get there in the best manner. So co-operation between Europe and the mainland is sorely needed.

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