December 21, 2016 / 1:44 PM / a year ago

EU Commission favours keeping limits on Chinese solar panels

* EU governments must decide whether to extend duties

* EU-China solar dispute threatened trade war in 2013

By Philip Blenkinsop

BRUSSELS, Dec 21 (Reuters) - The European Commission has recommended keeping import duties and a minimum price for solar panels and cells from China for two more years, according to documents seen by Reuters.

The European Union and China came close to a trade war in 2013 over EU allegations of solar panel dumping by China. But this was averted by an agreement to allow a limited amount of tariff-free panels at prices not below 0.56 euros per watt.

The Commmission is currently reviewing that agreement and also import duties of up to 64.9 percent for those outside the agreement all of which ended in Dec. 2015.

In the documents, the Commission said ending the measures would likely lead to a continuation of Chinese subsidies for the solar sector and a significant increase in dumped imports of solar cells and modules.

It also said the measures would only have a limited effect on demand and that comparisons between the 50,000 people working in importing and installation and the 5,000 to 10,000 in manufacturing were not appropriate. Job gains in the former could be outweighed by losses in the latter, it said.

A separate document said the minimum panel price would be cut to 0.46 euros/watt.

EU ProSun, a group of manufacturers including Germany’s SolarWorld, welcomed the findings, saying there was no shortage of competitively priced cells and modules in Europe and that the depressed EU market was due to political decisions, such as to reduce payments for green energy, not the import measures.

But SolarPower Europe, which represents those in the solar industry opposed to duties, said the large majority of industry players wanted the removal of trade barriers, which would hinder a growing solar sector in Europe. It hoped EU member states would support it.

The interested parties have until Jan. 6 to respond before the Commission makes a formal proposal to the 28 EU governments.

$1 = 0.9610 euros Reporting by Philip Blenkinsop. Editing by Jane Merriman

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