EU To Close FSR Investigations Against Chinese Solar Companies

• The EU has decided to close its in-depth investigation into the Romanian solar auction under FSR regulation 
• It follows the withdrawal of Chinese winning bidders LONGi and Shanghai Electric from the solar project 
• CCCEU says the Chinese companies had no commercially prudent option but to opt out of the project 
• It accuses the EU of using FSR as an economic coercive tactic and used unfairly against Chinese companies 

The European Commission will close its in-depth Foreign Subsidies Regulation (FSR) investigation into the Romanian solar auction after LONGi Solar Technologie GmbH, Shanghai Electric UK and Shanghai Electric Hong Kong International Engineering decided to withdraw from the project. 

Here's a quick recap of the case in point. Operating as a subsidiary of China's LONGi Green Energy Technology, LONGi Solar with its consortium partner Romanian EPC ENEVO Group, and the consortium of the 2 abovementioned Shanghai Electric companies, controlled by China's Shanghai Electric Group, were selected to build a 454.97 MW solar park in Romania.  

The €375 million project was awarded to the winners by the Romanian contracting authority of Societatea PARC FOTOVOLTAIC ROVINARI EST S.A. 

In early April 2024, the commission opened an investigation to examine if foreign subsidies provided an unfair advantage to these solar tender winners from China while updating the previously announced project capacity from 110 MW to 454.97 MW (see EU Investigation Of Chinese Bidders In Romanian Solar PV Auction). 

Commenting on the EU closing the investigation, the China Chamber of Commerce to the EU (CCCEU) accused the commission of using FSR as a tool of economic coercion that left the Chinese companies with no commercially prudent auction, but to withdraw from the 'troublesome, damaging, and uncertain legal procedures.' 

It called the withdrawal of the companies from the auction win a triple-loss scenario involving harm to the business environment in the EU, a hinderance to Europe's green transition, and loss of competitive Chinese bidders.  

In a statement, CCCEU condemned the EU's approach to FSR saying it is indulging in selective enforcement of the FSR since the Chinese companies faced heightened scrutiny compared to the other non-EU entities in the tender. 

It stressed that the 'disproportionate obligations and inadequate time for compliance could have detrimental effects on Chinese companies' ability to operate in the European market. 

"The chamber urges the EU to objectively recognize the contributions of Chinese companies to Europe's green transition and social development and to ensure the Chinese enterprises are provided with a fair, transparent, and non-discriminatory environment in which to operate," writes the CCCEU. 

Nonetheless, the EU Commissioner for Internal Market Thierry Breton said, "The Foreign Subsidies Regulation is ensuring that foreign companies which participate in the European economy do so by abiding to our rules on fair competition and transparency."