Wind Energy Fight Escalates, As Europe Imposes Tariffs On Chinese Steel Turbine Towers

Europe’s focus on protecting its lead in Wind Energy sector, especially offshore wind in recent times, has just escalated with the European Commission imposing tariffs of upto 19.2% on China-origin steel wind turbine towers. According to the EU statement, it found that Chinese firms had dumped about 300 million euros ($337 million) a year worth of towers at below-market prices, hurting European producers. Europe has been a strong market for wind energy, with multiple local champions spearheading it.

Protection of clean energy manufacturing has become a sensitive point in recent years across the US and Europe, besides other major consumers like India of course, as Chinese dominance rankles in what is considered a strategic sector.

The loss of the lead on solar energy is regularly highlighted by wind energy firms in these regions, to highlight the need to protect from Chinese competition. China supplies over 65% of global solar equipment today, with domination in some key input segments as high as  85%. That has hurt solar globally this year, as prices shot up in China due to various causes. Of course, it needs to be highlighted that it was the massive shift to China in the first place that enabled the sharp drop in solar costs through the past decade.

The peak 19.2% duty has been slammed on Chinese manufacturers that did not cooperate with the EU investigation, while those that did have been subjected to tariff levels ranging from 7.2% to 14.2 %. The tariffs follow the same model as the US tariffs on Chinese solar exports to the US.

While a strong domestic market will cushion the blow for now, the share of overseas sales is much lower for Chinese firms in the wind manufacturing space, as compared to their solar counterparts. In offshore wind in particular, expect Europe to defend its turf fiercely, as large scandinavian firms enjoy global leadership, besides other firms that have been scaling up.

India by contrast, has a well oiled wind manufacturing ecosystem, whose biggest challenge is not really Chinese competition, but domestic demand that will allow it to invest in itself.