EU Delays Formal China Wind Industry Investigation -Insider

The EU's Approach to China's Wind Power Industry

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BRUSSELS, Oct 24 - The European Union is awaiting more concrete evidence before launching a formal inquiry into China's wind power sector, which has emerged as a competitive force in the European market, according to an EU spokesperson.

In a recent draft proposal focused on wind energy, the Commission pledged to investigate foreign subsidies as part of a broader strategy to bolster Europe's struggling wind industry, which is facing increasing competition.

The EU official acknowledged that China had concerns about potential punitive actions against its wind and hydrogen electrolyser industries, following the unexpected probe into its electric vehicle (EV) sector.

"The announcement of the EV investigation took many by surprise, as it was delivered in a political speech and marked a departure from our usual openness. China interpreted it as a foregone conclusion that measures were already in the works," the official explained.

Last month, EU President Ursula von der Leyen announced a probe into imposing tariffs on affordable Chinese electric vehicles, which have been flooding the European market.

Regarding the wind sector, the EU official emphasized that, at present, the Commission lacks sufficient grounds to proceed further.

"We require solid evidence of unfair practices... We've received reports and indications that raise some concerns, especially regarding financial arrangements like deferred payments and payment upon electricity production. However, these don't constitute conclusive evidence of trade violations," the official stated.

"None of the major European producers could sustain not receiving payments for 5-6 years until their projects begin generating electricity. These factors raise questions, but they are not yet substantiated evidence of wrongdoing."

Since 2021, the EU's wind energy industry has faced challenges, partly due to inflation and intensified global competition, particularly from China.

While the U.S. President's Inflation Reduction Act caused concern within the EU last year, the EU official now views Asian competition, characterized by its lack of transparency and subsidies, as a more significant threat to the clean energy sector.

In 2022, major European turbine manufacturers reported operating losses, posing a risk to the EU's renewable energy targets and energy security. Investment decisions for offshore wind farms declined sharply last year.

"The approach outlined in this proposal is relatively uncommon for the Commission," the official added.

"We consider our wind industry a valuable asset, and we must exert every effort to ensure it remains a European success story."

Source: Reuters (Reporting by Julia Payne)