The European Union (EU) has initiated investigations into two Chinese-owned solar panel manufacturers suspected of receiving subsidies, further escalating trade tensions between Brussels and Beijing.
Amid growing concerns over the impact of foreign subsidies on European industries, the EU has taken a more assertive stance in protecting its markets.
However, the bloc faces a delicate balance as it seeks to promote renewable energy while safeguarding against potential distortions caused by subsidized imports.
EU's Foreign Subsidies Regulation
The investigations were launched under the Foreign Subsidies Regulation, focusing on alleged unfair advantages received by the companies in public procurement procedures.
The probes stem from notifications submitted by the ENEVO Group, including LONGi Solar Technologie GmbH, Shanghai Electric UK Co. Ltd., and Shanghai Electric Hong Kong International Engineering Co. Ltd.
The investigations pertain to a public procurement procedure initiated by a Romanian contracting authority to design, construct, and operate a photovoltaic park in Romania, partly financed by the EU Modernisation Fund.
Under the Foreign Subsidies Regulation, companies are required to notify public procurement tenders in the EU if the estimated value of the contract exceeds €250 million and if the company has received at least €4 million in foreign financial contributions from a third country in the preceding three years.
Following a preliminary review, the Commission found sufficient indications to warrant in-depth investigations into the alleged subsidies.
During this phase, the Commission will assess whether the companies gained an unfair advantage in the bidding process, potentially harming other participants.
The first consortium under investigation comprises the ENEVO Group and LONGi Solar Technologie GmbH. ENEVO Group, based in Romania, specializes in engineering and consulting services, while LONGi Solar Technologie GmbH is a German subsidiary of LONGi Green Energy Technology Co., Ltd., a major player in the solar photovoltaic industry.
The second consortium includes Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd., both wholly owned by Shanghai Electric Group Co. Ltd., a State Owned Enterprise of China.
These companies provide industrial-grade energy and manufacturing solutions, focusing on wind, solar, and hydrogen storage technologies.
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Addressing Distortions by Foreign Subsidies
The investigations come against the backdrop of the EU's efforts to address distortions caused by foreign subsidies in its internal market.
The Foreign Subsidies Regulation, which took effect in July 2023, provides the Commission with tools to tackle unfair competition and ensure a level playing field for all companies operating within the EU.
In recent years, foreign subsidies have raised concerns about their impact on fair competition and market distortions.
The regulation introduces notification-based procedures to investigate concentrations and bids in public procurement involving financial contributions from non-EU governments and an ex officio procedure to address other market situations.
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