China this week brought a World Trade Organisation dispute against the EU, as it alleges that EU member states Italy and Greece broke trade law by favouring local solar firms.
Beijing alleges that Italian and Greek law, which authorises high “feed-in tariffs” to encourage solar power generators, permits “prohibited” subsidies that directly discriminate against foreign companies and must immediately be abolished under WTO rules.
A statement from the commerce ministry said: “China considers that the measures are inconsistent with the WTO rules on national treatment ... and constitute import substitution subsidies that are banned by the WTO.”
If the Chinese allegation is proven an independent judicial panel can authorize trade sanctions.
A spokesperson for the EU trade commission said it was studying the case. EU officials have privately warned some member states that their renewable energy and biofuels programmes risk breaking global trade law.
Earlier this year the US announced anti-subsidy tariffs on imports of solar cells from China – with the EU contemplating similar action – a decision Beijing has also challenged at the WTO.
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