EU Commission launches investigations into Chinese solar companies 

The European Commission has launched two in-depth investigations under the Foreign Subsidies Regulation, aimed at addressing potentially market-distorting practices related to foreign subsidies in public procurement procedures within the EU. The investigations stem from concerns about unfair advantages that Chinese green tech companies may have gained through such subsidies, potentially impacting the competitiveness of public contracts in the EU.

The investigations, initiated following notifications by the ENEVO Group including LONGi Solar Technologie GmbH, and Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd., focus on a public procurement procedure initiated by a Romanian contracting authority for the development of a photovoltaic park in Romania. This project, financed in part by the EU Modernisation Fund, holds significant implications for the energy sector.

Under the Foreign Subsidies Regulation, companies are mandated to notify their public procurement tenders in the EU when certain criteria are met, including the value of the contract exceeding €250 million and the receipt of foreign financial contributions exceeding €4 million from at least one third country in the preceding three years.

The Commission’s preliminary review revealed sufficient indications to warrant in-depth investigations into the two bidders, suspecting that they have benefited from foreign subsidies that distort the internal market. During these investigations, the Commission will thoroughly evaluate the alleged subsidies and gather necessary information to determine if they provided an undue advantage to the companies during the tender process, potentially impacting fair competition.

In accordance with the provisions of the Foreign Subsidies Regulation, at the conclusion of the investigations, the Commission may accept commitments from the companies to remedy any identified distortions, prohibit the award of the contract, or issue a no-objection decision.

The companies under investigation represent significant players in the energy sector. The ENEVO Group, along with LONGi Solar Technologie GmbH, specializes in solar photovoltaic solutions, while Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd. are renowned for their industrial-grade energy solutions.

The initiation of these investigations underscores the European Union’s commitment to fostering fair competition and addressing distortions in the internal market caused by foreign subsidies. The Foreign Subsidies Regulation, which came into effect in 2023, equips the EU with essential tools to safeguard the integrity of its market while upholding principles of openness to trade and investment.