By Jonathan Stearns

The European Union threatened to impose tariffs on solar panels from China in the biggest EU trade dispute of its kind, saying producers in Europe may be victims of unfair price undercutting.

The EU opened a probe into whether Chinese manufacturers of solar panels sell them in the 27-nation bloc below cost, a practice known as dumping. The inquiry covers 21 billion euros ($26 billion) of imports of crystalline silicon photovoltaic modules or panels and cells and wafers used in them.

At stake is whether European companies such as Solarworld AG (SWV), Germany’s largest maker of the renewable-energy technology, win levies to counter growing competition from China following similar U.S. trade protection. Europe accounts for around three- quarters of the global photovoltaic market.

The investigation will determine whether solar panels from China are “being dumped and whether the dumped imports have caused injury to the union industry,” the European Commission, the EU’s trade authority in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.

The case highlights EU concerns about the expansion of Chinese solar companies, which have grabbed market share from European rivals that were once dominant, and follows a U.S. decision earlier this year to hit the Chinese industry with anti-dumping duties as high as 250 percent.

Dumping Investigation

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