Chinese firms targeted as EU launches probes into solar subsidies

Two companies are being investigated by the European Commission in relation to Romanian project

EU industry chief says the probes ‘aim to preserve Europe’s economic security and competitiveness’

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Longi Green Energy Technology, the world’s largest manufacturer of solar panels, is one of the firms being investigated. Photo: Xinhua

Published: 8:05pm, 3 Apr 2024Updated: 6:08pm, 4 Apr 2024

The European Commission is investigating whether two Chinese-linked companies used state subsidies to undercut rival bids in a Romanian solar project.

Two probes have been launched under the European Union’s new foreign subsidies regulation, with the commission stating that it has “sufficient indications” that the firms bidding for procurement contracts “have been granted foreign subsidies that distort the internal market”.

The first investigation concerns a consortium involving a German subsidiary of Longi Green Energy Technology Co. Hong Kong-listed Longi is the world’s largest manufacturer of solar panels and is headquartered in the Chinese city of Xian. The second investigation concerns two subsidiaries of Shanghai Electric Group Co, a Chinese state-owned company.

It’s the second use of the EU’s foreign subsidies regulation to probe Chinese firms since February. Photo: Shutterstock

“Solar panels have become strategically important for Europe: for our clean energy production, jobs in Europe, and security of supply,” said EU industry boss Thierry Breton.

“The two new in-depth investigations on foreign subsidies in the solar panel sector aim to preserve Europe’s economic security and competitiveness by ensuring that companies in our single market are truly competitive and play fair,” he added.

It marks the second use of the EU’s foreign subsidies regulation to probe Chinese firms since February, and demonstrates Brussels’ willingness to use the commercial weaponry at its disposal to counter what it sees as unfair competition from Beijing.

Last week, a Chinese train maker withdrew from a public tender in Bulgaria after the EU launched an investigation into a bid it said was undercutting local firms.

The inquiry, announced in February, was the first of its kind and marked the maiden use of the foreign subsidies regulation designed to stop state handouts from distorting the EU’s single market.