A World Trade Organization (WTO) official and several Italian lawyers recently spoke pv magazine Italy on the timing of a possible Chinese legal challenge to Italy’s new solar measures, which offer incentives only for high-quality PV modules produced in the European Union.
The Italian government’s National Recovery and Resilience Plan (NRRP) 2, published in the country’s official gazette in March, introduces new fiscal credits for the purchase of components for sustainable energy projects.
The PV tax credits can cover up to 35% of the cost of solar panels and will be awarded to projects that exclusively use PV modules made in the European Union. They are awarded to projects with panels with a module efficiency of more than 21.5%, or products with a cell efficiency of more than 23.5%. They are also awarded to projects that use heterojunction or perovskite-silicon tandem modules with an efficiency of more than 24%.
pv magazine Italy four Italian analysts and a WTO official asked whether Asian manufacturers could challenge the measures.
“The new provisions should be seen in the broader context of the European Green Deal and the Net Zero Industry Act (NZIA),” said Celeste Mellone, partner at Italian law firm Green Horse Advisory. “As Energy Commissioner Kadri Simson has already stated, these measures are intended to support the European market without introducing tariffs or similar measures against Chinese module producers.”
Mellone added that the impact would initially be limited due to the lack of European panel makers that meet the conditions.
“Given the modest amount of the tax benefit – approximately €1.8 billion over the period 2024-25 – and the natural scarcity of compliant modules, We do not expect the measure to have any practical adverse impact on Chinese producers,” said Mellone.
She argued that there is a possibility of a Chinese appeal against the new provisions is remote.
“I believe that the legal action, if proposed, will be in the form of a challenge to the secondary legislation and that it will therefore only be possible in about three months to verify whether there will be disputes and how many,” said Emilio Sani. lawyer at Studio Sani Zangrando.
However, Sani argued that the Italian law must be contextualized within the broader European situation.
“In particular, the possibility is being considered to introduce in the incentive auction procedures, at 30% of auction volumes or at least 6 GW per year, the obligation to meet certain non-price criteria,” Sani explained. “It is probably about these rules that an important discussion could arise.”
Similar situations in the past have not led to confrontations.
“There is a WTO precedent regarding the introduction of the so-called ‘domestic content restrictions’ for European production modules in the post-2009 Italian photovoltaic incentive schemes, which had been the subject of a request for consultations by China,” said Anna De Luca, a lawyer at Macchi di Cellere Gangemi. “However, the WTO system has been in crisis for several years.”
In November 2012, China initiated dispute proceedings at the WTO regarding certain measures, including domestic content restrictions, affecting the renewable energy production sector.
“As in all WTO disputes, the proceedings began with a request for consultations, during which the two sides were invited to sit down and discuss their differences,” a WTO spokesperson said. pv magazine Italy. “It is true that since China’s request for consultations in 2012, there have been no new developments in this matter, apart from the fact that the EU agreed to allow Japan to participate in the consultations. We have no information about if and when such conversations took place and what the results were, as they are confidential between the participating parties. You have to ask China and the EU for more details.”
The spokesperson suggested that even such measures could be the subject of bilateral meetings, rather than procedures and negotiations within the framework of international institutions.
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