Commission Implementing Regulation (EU) 2021/2239 of 15 December 2021 imposing a definitive anti-dumping duty on imports of certain utility scale steel wind towers originating in the People’s Republic of China

Consumables

(239) The cooperating sampled exporting producers reported the use of around 120 different raw materials and energy types in the production of the product under investigation. The investigation showed that a majority of those factors of production represented a negligible share on the total cost of production, as well as per product type. The Commission grouped those factors of production under consumables. The cost actually incurred by the sampled cooperating exporting producers was expressed as a percentage of the actual cost of direct materials and the percentage was applied to the undistorted cost of direct materials.

Labour

(240) ILOSTAT

Available at https://ilostat.ilo.org/data/ (last viewed 27 May 2021).

publishes information on monthly wages and average weekly working hours in sectors of economic activity inter alia in Mexico. The Commission used that information of 2019 to determine the average hourly wage in the manufacturing sector. To arrive at the total labour cost, the Commission relied on the data published by OECD in Taxing Wages 2020

Available at https://www.oecd-ilibrary.org/sites/3c92e215-en/index.html?itemId=/content/component/ 3c92e215-en (last viewed 27 May 2021).

, which covered the period of 2019. To the hourly wage in manufacturing, the Commission added employer’s contributions to sickness and maternity insurance, social services, injury insurance, retirement insurance, discharge and old age insurance, and housing fund.

Electricity

(241) As explained in recital (182), the Commission found that there was no evidence that the electricity price in Mexico was distorted by government intervention. Therefore, the undistorted cost of electricity was based on the information from Mexico.

(242) In the Second Note, the Commission informed the parties that it intended to use the electricity tariffs applicable to industrial users as published by CFE

Available at https://app.cfe.mx/Aplicaciones/CCFE/Tarifas/TarifasCREIndustria/Industria.aspx (last viewed 28 March 2021).

. CFE published the electricity tariffs applicable to several types of businesses and industrial users by month and by municipality. In the view of the large amount of data that would be necessary to process as well as the insignificant share of electricity on the cost of production (around 1 %), the Commission decided to rely on the average price of electricity in Mexico established in the Doing Business survey by the World Bank for 2019 and 2020

Available at https://www.doingbusiness.org/en/doingbusiness (last viewed 27 May 2021).

.

(243) Following final disclosure, Chengxi Shipyard and Suzhou Titan submitted that the Doing Business survey was not an appropriate source for the undistorted cost of electricity and that the Commission should have used the tariffs charged by CFE for Industrial Demand in Transmission and Industrial Demand in Sub-transmission instead. In particular, the companies pointed out that the methodology used by Doing Business did not reflect the conditions under which the SWT producers use electricity. The tariff calculated by Doing Business was applicable to a warehouse located in the largest business city of the country, being connected to the grid for the first time and operating eight hours per day on a surface area of approximately 2200 m2 (building and land) with a monthly consumption much smaller than the one of the Chinese SWT producers. On the other hand, according to Chengxi Shipyard, the SWT producers were often located in suburban industrial areas, had large scale production facilities, and ran continuously. In addition, Suzhou Titan provided a calculation of the undistorted cost of electricity based on two tariffs (Industrial Demand in Transmission and Industrial Demand in Sub-transmission) charged by CFE in the municipalities where the Mexican SWT producers were located.

(244) The Commission noted that CFE used 13 different tariffs for its industrial customers. Although some of those tariffs could be easily discarded, such as tariffs for companies active in agriculture or aquaculture, many more remained to be considered. The Commission found that the sampled exporting producers did not provide any evidence that would make it possible to determine which tariff should have been used. The benchmark published by Doing Business was applicable to a model industrial customer. Therefore, the Commission found that benchmark reasonable although the model business used by Doing Business did not operate under the exact same conditions as the Chinese SWT producers. Consequently, the Commission rejected the claim.

Natural gas

(245) The price of natural gas in Mexico in the investigation period was available in the online statistical database maintained by the energy regulator CRE

Available at https://www.cre.gob.mx/IPGN/index.html (last viewed 27 May 2021).

. The Commission used the prices reported for all months covering the investigation period. The prices were reported per gigajoule. Therefore, a conversion to cubic meters was necessary. To determine the conversion ratio, the Commission used the information published online by the Canadian natural gas distributor Forbis BC

Available at https://www.fortisbc.com/about-us/corporate-information/facilities-operations-and-energy-information/how-gas-is-measured (last viewed 27 May 2021).

.

3.2.3.2.

Manufacturing overhead costs, SG&A and profits

(246) According to Article 2(6a)(a) of the basic Regulation, the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits. In addition, a value for manufacturing overhead costs needs to be established to cover costs not included in the factors of production referred to above.

(247) The manufacturing overheads were established individually for each sampled exporting producer. The manufacturing overheads reported by the companies were expressed as a share of the costs of manufacturing actually incurred by the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

(248) For establishing an undistorted and reasonable amount for SG&A and profit, the Commission relied on the financial information of two SWT producers in Mexico. With regard to Arcosa Industries de México, S. de R.L. de C.V., the Commission used the financial statements included in in the consolidated annual report 2019, in particular the data reported for the EEG segment

Annual report 2019 (p. 47) available at https://s2.q4cdn.com/158938184/files/doc_financials/2019/ar/NC10009566-ARCOSA-INC._10K_E-bookproof_2020_V1-(002).pdf (last viewed 27 May 2021).

. With regard to Speco Wind Power, S.A. de C.V., the Commission used the individual financial information for 2019 as available in Global Financials by D&B

Available at https://www.dnb.com/ie/products/finance-credit-risk/global-financials.html (last viewed 27 May 2021).

.

(249) Following final disclosure, Chengxi Shipyard claimed that the Commission should not have disregarded its SG&A since it was not proven that it was distorted. Further, the company argued that should Arcosa’s financial statements still be used, the values of the respective cost items and of profit should be reduced to 75 %, since that was the share of SWT and the utility structures sub-segment in the EEG group’s revenue.

(250) In recital (88), the Commission made conclusions on the existence of significant distortions that rendered the use of Article 2(6a) of the basic Regulation appropriate. Findings were made not only with regard to the raw materials used in the SWT production, but also with regard to the product under investigation and horizontal issues common for all sectors of the Chinese economy. Therefore, the Commission considered it appropriate to replace the SG&A and profit of the sampled exporting producers with undistorted benchmarks. In addition, the Commission noted that the adjustment of Arcosa’s financial information to the level generated by the sub-segment, which was closest to the product under investigation, was impossible to carry out since the financial information of Arcosa only provided information on the share of the SWT and utility structures sub-segment in the EEG group’s revenue but not in costs of goods sold and other, indirect costs, which fed into the SG&A. Consequently, the claims of Chengxi Shipyard were rejected.

(251) Chengxi Shipyard further argued, that under its accounting practices, it included in the manufacturing overheads certain cost items, which should actually fall under SG&A. The company provided a list of those cost items and requested the Commission to exclude them from the reported manufacturing overheads to prevent a double counting of those cost items, as they were allegedly included in the SG&A benchmark.

(252) The Commission noted that the company itself reported the cost items in question under manufacturing overheads throughout the whole investigation (in its initial questionnaire reply, in the deficiency reply and in a revised version of data submitted during the remote cross-check). It only requested that certain cost items should be excluded from manufacturing overheads and moved to SG&A in its comments on final disclosure. Moreover, in the submitted profit and loss information

Table G of the questionnaire for exporting producers.

, which was part of the questionnaire reply, the company separately reported SG&A composed of cost items other than those included in its manufacturing overheads. More importantly, the division of costs between manufacturing overheads and SG&A reported by the company throughout the investigation was in line with its financial accounting, where the cost items in question were booked at manufacturing overheads accounts. Therefore, the Commission rejected the claim.

(253) Following final disclosure, Suzhou Titan claimed that the Commission misinterpreted whether the individual SG&A items in Speco’s financial information concerned income or expense, which resulted in an inflated SG&A. According to the company, the SG&A should have amounted to approximately 15 million MXN instead of the 42 million MXN calculated by the Commission.

(254) The Commission examined the claim and confirmed that the value of SG&A was calculated correctly. The value of SG&A can be easily cross-checked by comparing the gross profit (approximately 105 million MXN) and the profit before taxes (approximately 63 million MXN). The difference between them (42 million MXN, not 15 million MXN) represented the value of SG&A. Thus, the Commission rejected the claim.

3.2.4.

Calculation

(255) On the basis of the above, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

(256) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of each sampled cooperating exporting producer. The Commission multiplied the unit consumption quantities by the undistorted costs per unit observed in the representative country, as described in section 3.2.3 above.

(257) Once the undistorted manufacturing cost was established, the Commission applied the manufacturing overheads, SG&A, and profit as noted in recitals (246) to (248).

(258) The Commission added manufacturing overheads for each sampled exporting producer, as explained in recital (247), in the range of 3 to 10 % of the manufacturing costs to the undistorted manufacturing cost in order to arrive at the undistorted costs of production.

(259) To the costs of production established as described in the previous recital, the Commission applied SG&A and profit determined based on the financial information of the two SWT producers in Mexico. The weighted average SG&A expressed as a percentage of the costs of goods sold (COGS) and applied to the undistorted costs of production, amounted to 13,6 %. The weighted average profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 10,8 %.

(260) Finally, where applicable, the Commission deducted the undistorted value of by-product. The Commission multiplied the quantities of by-product generated per unit of the product under investigation by the undistorted unit price of by-product observed in the representative country, as described in section 3.2.3 above.

(261) On that basis, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

(262) Following final disclosure, Chengxi Shipyard and Suzhou Titan submitted that the Commission should have deducted the undistorted value of the sold by-product (steel scrap) from the cost of manufacturing and not from the normal value. Chengxi Shipyard argued that it was in line with its accounting practices to offset the revenue from the sales of scrap against the cost of manufacturing. Suzhou Titan recalled that in previous investigations

Recitals (188) to (190) of Commission Implementing Regulation (EU) 2020/1428 of 12 October 2020 imposing a provisional anti-dumping duty on imports of aluminium extrusions originating in the People’s Republic of China, (OJ L 336, 13.10.2020, p. 8).

, the Commission deducted the undistorted value of by-product from the cost of manufacturing.

(263) With regard to the claim of Chengxi Shipyard, the Commission noted that indeed the company allocated the revenue generated by sales of steel scrap to each and every project in its cost accounting. In its financial accounting, though, the revenue from sales of steel scrap was not booked as main operating revenue and it certainly did not reduce the value of the cost of manufacturing. On the contrary, the revenue was recorded under Other operating revenue.

(264) With regard to Suzhou Titan’s argument, the Commission noted that in the quoted previous investigation, the by-product was reused in the producers’ own production while in the present case, the steel scrap was sold. Therefore, in this investigation, the benchmark for steel scrap stood for the undistorted sales price, which naturally covers not only the cost of manufacturing, but also the manufacturing overheads, SG&A and profit.

(265) Consequently, the Commission rejected the claims of Chengxi Shipyard and Suzhou Titan described in recital (262).

(266) In addition to its comments on the methodology used to reflect the effect of by-product on the normal value, Chengxi Shipyard pointed out that the Commission omitted the deduction of by-product in the company’s normal value calculation.

(267) The Commission examined the claim and confirmed that indeed, due to a clerical error, the undistorted value of by-product was not deducted from the normal value. The Commission corrected the error and reflected the changes also in the calculation of the dumping margin for other cooperating companies and the residual dumping margin. The Commission sent the company an additional final disclosure and gave it the opportunity to comment. The company had no further comments regarding this issue.

(268) Following final disclosure, Chengxi Shipyard submitted that the Commission should not have carried over to the constructed normal value the cost of consumables and the manufacturing overheads as a percentage of the cost of manufacturing. According to the company, those two cost categories were not connected to the value of other input materials. Instead, the Commission should have identified a suitable benchmark in the representative country.

(269) The Commission clarified that the described methodology was applied because the financial data available in the representative country did not contain information on manufacturing overheads. The interested parties were informed of this fact via two Notes on the sources for the determination of the normal value. The company had thus ample opportunities to propose a suitable benchmark to replace the distorted manufacturing overheads.

(270) With regard to consumables, the Commission noted that in fact the cost of consumables was expressed as a percentage of cost of direct materials, not as a percentage of the cost of manufacturing. In this respect, it decided to apply this methodology considering the limited impact of consumables in the cost of production in their totality and per product type, and due to the inability of some of the sampled exporting producers to report the consumption of certain factors of production in standard units of measurement. Units such as sets or bottles, which were incompatible with the units used in the import statistics, were reported instead. Although, in general, those companies made an effort and converted the consumption of the more important factors of production to standard units (mostly to kilograms), this deficiency could not be eliminated for all affected factors of production. This prevented the Commission from finding a suitable benchmark in the representative country and thus contributed to the need to reflect the cost of consumables in the normal value as a percentage of the undistorted cost of direct materials.

(271) Based on the reasons elaborated in recitals (269) and (270), the Commission rejected the claims of Chengxi Shipyard described in recital (268).

(272) Chengxi Shipyard similarly claimed that the method used by the Commission to add the domestic transportation cost to the undistorted cost of the factors of production was incorrect. Instead of increasing the undistorted costs by a single percentage determined on the basis of the company’s data, the Commission should have calculated the individual transportation cost for each factor of production. In particular, the company claimed that the unit transportation cost was more linked to the weight than to the value of a material. Thus using a single percentage inflated the transport cost for more valuable factors of production.

(273) The Commission recalled that the exporting producers were required to report the actual or estimated transport cost related to each factor of production. However, the company did not provide the required information. Consequently, the Commission rejected the claim.

3.3.

Export price

(274) In its comments on the initiation, CCCME claimed that the sources of information on the export price were doubtful since, in particular, the price of a 3-section SWT used in the complaint was higher than the price of a 4-section tower.

(275) The Commission noted that in the present case, the complainant could not make use of the official import statistics in order to determine the export price of the exporting producers in the PRC. First, the product under investigation falls under CN codes that cover a wider range of products. Second, the import statistics record the quantities in kilograms. Therefore, it was not possible to determine the import price of the various types of towers (depending on the number of sections). As explained in the complaint

See Annex R4 to the complaint.

, the complainant provided sworn affidavits issued by the Union producers as sufficient evidence of the winning price offered by the Chinese exporting producers in tenders, in which the Union producers took part but lost. Under the circumstances of the present case and taking into account the specific nature of the product under investigation, the Commission considered the sworn affidavits as a sufficiently reliable source. The fact that the price of a 3-section SWT was higher than the price of a 4-section SWT may have resulted from the source of information the complainant used. In addition, CCCME did not provide

any evidence to show that such situation was impossible to occur, in particular since not only the number of sections but also their dimensions (diameter, length and thickness) influenced the cost of production and hence the sales price. Subsequently, the Commission rejected the claim.

(276) The sampled exporting producers exported to the Union directly to independent customers.

(277) Therefore, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

3.4.

Comparison

(278) The Commission compared the normal value and the export price of the sampled exporting producers on an ex-works basis.

(279) Where justified by the need to ensure a fair comparison, the Commission adjusted the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for handling and loading, transport in the country concerned, credit cost, and, where applicable, the export price was adjusted for the value of supplies provided by the customer under a tolling agreement pursuant to Article 2(10)(k) of the basic Regulation.

(280) In its comments on the final disclosure, Chengxi Shipyard submitted that the SG&A data of the Mexican SWT producers did not provide sufficiently detailed information. Therefore, according to the company, the SG&A used in the calculation of the normal value was likely to include expenses, which should be deducted from the export price for the purpose of comparison. Subsequently, the company requested the SG&A benchmark to be adjusted to reflect the allowances deducted from the export price.

(281) The Commission considered that the company did not provide any evidence that the expenses deducted from the export price for the purpose of comparison were included in the SG&A of the two SWT producers in Mexico. Subsequently, the Commission rejected the claim.

(282) Chengxi Shipyard further claimed that the comparison of normal value and export price should have been done per piece, i.e. per SWT section, rather than per kilogram as done by the Commission. The company pointed out that most injury indicators were also expressed in pieces instead of weight. Further, it argued that the price of SWT per kilogram provided a distorted picture since each section may contain various internals, which influenced its weight but were disassociated with the pricing of SWT. Finally, Chengxi Shipyard noted the discrepancies between the weight of individual sections reported in its EUSALUR (Union sales to unrelated customers) and COM PCN (cost of production per product type) tables. The company claimed that those discrepancies stemmed from a correction requested by the Commission during the remote cross-check.

(283) The Commission considered that the injury indicators were disconnected from the dumping margin calculation. Moreover, the company did not provide any evidence as to the claim that the inclusion of internals did not influence the price of SWT. With regard to the discrepancies in weight of individual product types (sections) in the sales and cost of production tables, the Commission indeed observed during the remote cross-check that certain parts listed on sales invoices were not reported in the value and quantity (weight) of the respective sales transactions. Since the company confirmed that those parts were supplied as accessories to the particular SWT section and included in the reported cost of production, the Commission asked the company to include them in the quantity and value of the affected sales transactions, to which the company agreed. The company claimed that in the cost of production data, they aligned the weight with the weight originally reported in the sales table. At this point of the investigation, it was not possible to verify which weight per product type (SWT section) was correct and should, therefore, be used in the calculation. Therefore, the Commission rejected the claims.

(284) Following final disclosure, Suzhou Titan argued that the Commission overlooked the differences between on-shore and off-shore SWT. Although the Commission decided not to extend the anti-dumping measures to imports to the continental shelf and exclusive economic zones of the Member States, the company claimed that off-shore towers are also used in wind farms located in the territorial waters of a country. Therefore, the company claimed that in case off-shore SWT were included in the calculations, the differences in physical characteristics between on-shore and off-shore SWT should be reflected in the comparison.

(285) As far as it concerns Suzhou Titan, the Commission noted that the company neither exported nor produced off-shore SWT. In general, only one of the three sampled exporting producers produced and exported to the Union a limited number of sections for off-shore installations. Those were included in the dumping margin calculations. As the definition of products types was very detailed, there was no overlap with sections of on-shore SWT when comparing the normal value and the export price per product type. Thus, the Commission considered that the differences between on-shore and off-shore towers were not overlooked in the determination of dumping and subsequently rejected the claim.

3.5.

Dumping margin

(286) For the sampled cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

(287) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled exporting producers, disregarding the margins established in the circumstances referred to in Article 18 of the basic Regulation.

(288) On this basis, the definitive dumping margin of the cooperating exporting producers outside the sample is 81,9 %.

(289) For all other exporting producers in the PRC, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the PRC to the Union in the IP that were measured in the number of towers and established on the basis of the estimate provided by the Union industry as explained in recitals (308) to (313).

(290) The level of cooperation in this case is low because the imports of the cooperating exporting producers constituted around 30 % of the total exports to the Union during the IP. On this basis, the Commission considered it appropriate to establish the residual dumping margin at the level of the weighted average dumping margin determined for the product types most exported by Chengxi Shipyard, the sampled exporting producer with the highest individual dumping margin. These product types represented more than 50 % of this company’s exports of the PUI to the Union during IP.

(291) The definitive dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

CompanyDefinitive dumping marginChengxi Shipyard126,8 %Penglai Dajin49,7 %Suzhou Titan60,7 %Other cooperating companies81,9 %All other companies143,2 %

(292) Following final disclosure, CCCME argued that the dumping margins established by the Commission were not credible. In particular, the industry organisation pointed out, on the example of the dumping margin determined for other cooperating companies, that based on the Commission’s calculation, the normal value of the Chinese exporters should be approximately 80 % higher than their export price in a situation where the Chinese export prices were approximately at the same level as the cost of production of the Union producers. To arrive at this conclusion, CCCME deducted the target profit (9,1 %) from the injury margin (11,2 %) thus claiming that the Chinese export price was only by 2 % higher than the Union producer’s cost of production.

(293) The Commission noted that the difference between the dumping and injury margins is irrelevant when assessing the credibility of the dumping margin calculation. Dumping margins were based on the information provided by the companies (consumption of factors of production, certain costs, export prices) and undistorted costs and benchmarks established in the representative country. The exporting producers had the opportunity to comment on their individual dumping margin calculation. Should factual errors be identified, the Commission would have corrected them. In addition, all parties were informed about the sources and values of undistorted costs and benchmarks in the representative country and were given the opportunity to comment on the sources themselves as well as on potential errors in the calculation. Based on the interested parties’ comments, the Commission made changes or corrections where appropriate.

(294) Moreover, CCCME compared categories that cannot be practically compared. For example, CCCME disregarded that the Chinese landed export prices included SG&A, profit, handling and loading, ocean freight and insurance, import duties, and post-importation cost and therefore, could not be compared to the Union costs of production. Furthermore, CCCME failed to take into account the fact that the Chinese export price compared to the Union target price for the purpose of the injury margin calculation was a landed price, while the Chinese export price used for the dumping margin calculation was an ex-works price.

(295) Finally, based on the reasons presented in recitals (293) and (294), the Commission rejected the claim by CCCME.

1. INJURY

4.1.

Definition of the Union industry and Union production

(296) During the investigation period, the like product was manufactured by 19 known producers in the Union

The complaint identified 23 Union producers, but some became insolvent and/or had no production during the investigation period.

. These producers constitute the Union industry within the meaning of Article 4(1) of the basic Regulation.

(297) The total Union production during the investigation period was established at 2443 towers.

(298) As indicated in recital (8), it was estimated that the three Union producers selected in the sample represented 38 % of the total Union production of the like product. They accounted for 38 % of the Union sales volumes established at initiation stage.

4.2.

Union consumption

(299) The three CN codes under which SWT or sections thereof may be imported also include significant volumes of other products. Therefore, in the absence of more accurate data concerning imports of SWT for the period considered, the Commission established Union consumption on the basis of EWTA data

t21.004376.

.

(300) EWTA calculated consumption starting from wind installations in MW as published by WindEurope

WindEurope is also registered as an interested party in this proceeding.

. EWTA calculated the number of towers by dividing the MW installed yearly by the average size(s) of the wind turbine generators installed according to WindEurope’s reports. Union consumption in 2017 is based on 2018 installations as reported by WindEurope, Union consumption in 2018 is based on 2019 installations as reported by WindEurope and Union consumption in 2019 is based on 2020 installations as reported by WindEurope. Union consumption in the investigation period is based on 2020 installations as reported by WindEurope (for the first half of the investigation period) and extrapolations based on EWTA’s market intelligence (for the second half of the

investigation period). The 1-year time adjustment is needed because of the lead time between the time producers sell SWT to their clients and the time wind turbines are installed, which, according to information on file

Inter alia, page 7 of the injury submission and page 28 of the body of the questionnaire reply in t20.008818 (Vestas).

, is 12 months on average, although it can be longer

For details about timelines, see pages 6, 8 and 9 of t20.007935 (WindEurope). The deadline for the installation of onshore projects can be up to four years and for offshore projects up to six years.

.

(301) On that basis, consumption of SWT developed during the period considered as follows:

Table 2

Consumption on the Union market (towers)

Source: EWTA

201720182019IPUnion consumption2707320028513087Index100118105114

(302) Overall consumption increased from 2707 towers in 2017 to 3087 in the investigation period. Demand was particularly strong in 2018, driven by the rise in installations in 2019 in Spain, Sweden and offshore

Wind energy in Europe in 2019 - Trends and statistics, WindEurope, February 2020, page 11. The report can be downloaded via https://windeurope.org/intelligence-platform/product/wind-energy-in-europe-in-2019-trends-and-statistics/

.

(303) Following final disclosure, GE claimed that basing Union consumption figures on the number of installations in the Union during the subsequent year made little sense as it would be impossible to accurately recalculate a purchase date from the year of installation. In support of this claim, GE referred to the fact that the lead time can be longer than one year, as the Commission had found, but it did not comment on the appropriateness of using a 12 months average lead time as had been proposed by EWTA and found reasonable by the Commission based on the information provided by interested parties in this investigation.

(304) The Commission first noted that GE neither proposed an alternative lead time to establish consumption on the basis of WindEurope installation data, nor a different basis to calculate consumption. In fact, GE itself acknowledged that timelines between purchasing and installing steel wind towers vary significantly depending on the windfarm project, its size and location, while timelines between customs clearing steel wind towers (or these leaving the Union producers’ factories) and installing them also fluctuate. As to the reasonableness of an average lead time of one year between sales (consumption) and installation, EWTA’s reasoning was supported by statements provided by other interested parties in the course of the investigation

On page 7 of its injury submission available in t20.008818, Vestas wrote: Wind turbines are sold with a delivery (commissioning) date of typically around 1 year after a firm order has been signed.

. Finally, the consumption trend established when applying the one year adjustment is not contradicted by other information on file. The claim was therefore rejected.

(305) Following final disclosure, CCCME asked for a reconciliation of the relevant dataset used with publicly available sources. The Commission dismissed the claim. The absence of accurate publicly available statistical data with regard to steel wind towers is the exact reason for resorting to the methodology outlined in recital (300) above. With regard to imports, Eurostat does not use the same units of measurement as WindEurope’s dataset. Moreover, the CN-codes under which steel wind towers are classified also include significant volumes of other products. The submitted open versions of EWTA’s datasets were made available to interested parties in t21.003247, saved on 12/04/2021 (WindEurope and Eurostat’s datasets) and in t21.004376, dated 07/06/2021 (WindEurope’s dataset).

(306) After final disclosure, CCCME also questioned the significant differences in consumption figures,

CCCME questioned the difference in numbers in the three submissions not only with regard to consumption, but also with regard to several other indicators. The explanation provided by the Commission in this recital also covers the differences between the three submissions for indicators other than consumption.

as reported in the complaint

t20.005691.

, in EWTA’s reply to the macro data questionnaire of 9 April 2021

t21.003247.

and EWTA’s revised submission of 7 June 2021

t21.004376.

. The Commission clarified that the reasons for the changes had been duly explained by EWTA in the last two of the said submissions and reiterated that the underlying datasets had been made available to interested parties. To some extent, the difference between EWTA’s initial reply to the macro data questionnaire and the complaint data is explained by the fact that the United Kingdom, which is an important SWT market, was not anymore accounted for in the macro data questionnaire reply due to its formal departure from the Union on 1 January 2021. Additionally, in its submission of 7 June 2021, EWTA explained the changed figures with regard to some of the indicators as compared to the submission of 9 April 2021 by new insights, notably with regard to total annual consumption (the one year adjustment referred to above) and the share of exports in the Union industry sales volumes.

(307) The Commission had remotely cross-checked the reply to the macro data questionnaire on 26 March 2021. Following final disclosure, CCCME suggested that the Commission should have conducted another RCC as the verified questionnaire reply of EWTA had in the meantime been superseded by the updated reply of 7 June 2021. The Commission clarified that the dataset on which the 7 June 2021 submission was based was broadly identical to the dataset on which the 9 April 2021 submission had been based. Only for the second half of the investigation period, new overall consumption figures were established by EWTA, in line with the revised approach to account for a 1-year delay between consumption and installation. The consumption data for the first half of 2020 had to be based on the installed energy output (MW) during the first half of 2021. After having received the updated EWTA submission, the Commission duly checked how EWTA had estimated the MW figure for the first half of 2021 and it concluded that the extrapolation methodology to arrive at that figure, which was the basis for the SWT consumption figure in the second half of the investigation period, was reasonable. It had therefore concluded that there was no need to conduct a second RCC related to the macro data provided by EWTA. The Commission also noted that prior to the final disclosure, no party had provided comments on the updated EWTA submission of 7 June 2021, also not after parties had been informed on 18 June 2021 on the non-imposition of provisional measures and explicitly invited to comment on submissions made by other interested parties

t21.004624.

. Neither CCCME nor any other party commented on EWTA’s submission of 7 June 2021 by that deadline and the Commission therefore rejected the allegation that this new submission could have affected CCCME’s rights of defence.

4.3.

Imports from China

4.3.1.

Volume and market share of the imports from China

(308) The product under investigation represents a limited part of the import volumes under the CN codes covered by the investigation. In the absence of more accurate import data for the period considered or other meaningful data, table 3 reflects EWTA’s best estimates of imports from the country concerned. EWTA’s methodology consisted of deducting Union producers’ sales from Union consumption to establish imports in a year. Then EWTA resorted to Eurostat to calculate the average representativity of each relevant import source, including China as follows:

Table 3

Average representativity of import sources

Source: EWTA

201720182019IPChina81 %77 %85 %79 %Vietnam4 %8 %5 %7 %Republic of Korea10 %5 %4 %3 %

Turkey4 %9 %5 %10 %Others, namely Malaysia and Indonesia1%1%1%1%

(309) EWTA calculated the above percentages starting from Eurostat imports values for China, Turkey, Vietnam and the Republic of Korea for CN codes 73082000 and 85023100. EWTA computed a simple average of the representativity of each source in CN code 73082000 and the representativity of each source in CN code 85023100 to come up with the overall average representativity shown in table 3.

(310) For each of the periods, imports of SWT from third countries other than China, Turkey, Vietnam and the Republic of Korea are estimated at 1 % of the total imports. Such other countries are, according to EWTA, namely Malaysia and Indonesia.

(311) Where Eurostat data showed imports under CN codes 73082000 and 85023100 from countries other than the ones mentioned in the table above, EWTA disregarded those, relying on their market knowledge, according to which, worldwide, there is SWT production only in a selected number of countries. Out of them, only the countries named in the table above would have exported SWT to the Union during the period considered.

(312) After final disclosure, CCCME alleged that the above methodology was based on EWTA’s subjective assessment and market knowledge but failed to substantiate this. The Commission considered that the calculation of import volumes as explained above is reasonable in view of the available data as it combines the use of an undisputed reliable statistical source (Eurostat) and EWTA’s market knowledge for the volume share of exporting countries with the overall volume of imports established using WindEurope’s published installed capacity data and the Union sales volumes as reported by the Union producers of the like product. The contributions made in the course of the investigation by users as a whole did not reveal any source of imports other than the selected number of countries in table 3, while they confirmed that Chinese producers were, by far, their main suppliers from third countries. The Commission consequently rejected CCCME’s claim.

(313) On that basis, imports from China developed as follows:

Table 4

Import volume and market share

Source: EWTA

201720182019IPVolume of imports from China (towers)6909927911063Index100144115154Market share25 %31 %28 %34 %Index100122109135

(314) Imports from China fluctuated over the period considered. It is noted that SWT are typically sold as part of larger projects, with a timespan often exceeding one year, so the evolution of sales, including imports, often reflects shifts in demand that took place a year or more before the sale took place. Overall, imports from China increased by 54 %. Their market share grew from 25 % in 2017 to 34 % in the investigation period, which entails a 35 % increase over the period considered.

(315) Following final disclosure, GE noted that the Commission incorrectly calculated the Union consumption of steel wind towers and, thus, incorrectly established the market shares of Chinese producers. The claim is rejected on the grounds explained in recital (304).

4.3.2.

Prices of the imports from China and price undercutting

(316) The product under investigation represents a limited part of the imports reported under the CN codes covered by the investigation. In the absence of reliable statistical data for the period considered or other meaningful data, the Commission therefore established the average prices of Chinese imports on the basis of data as submitted by sampled exporting producers.

(317) After final disclosure, CCCME and Suzhou Titan contested that it was appropriate to establish average Chinese import prices on the basis of the remotely cross-checked prices of the sampled exporting producers. In particular, CCCME considered that these prices would represent not more than 22 % of Chinese imports and that they therefore could not be considered as representative. Alternatively, it considered that the Commission should resort to Eurostat data and it provided a table comprising, for the four years of the period considered, a volume of imports in tonnes and a EUR/tonne unit price of those imports according to CCCME’s own calculations, based on Eurostat data.

(318) CCCME did not provide the exact data source for the mentioned figures and therefore the Commission was unable to assess if the resulting figures were more representative. The Commission however recalled that the product under investigation represents only a limited part of the imported volumes reported in Eurostat under the CN codes covered by the investigation. Therefore, it concluded that an average price and average price evolution on the basis of a product mix which includes significant volumes of products not concerned is clearly less representative than an average price and average price evolution of only the product concerned from the three sampled exporting producers, which at the same time are the largest exporting producers that have come forward in the proceeding. CCCME’s and Titan’s claims were therefore rejected.

(319) In view of the above, the Commission found that the average price of SWT imports from China developed as follows:

Table 5

Import prices (China)

Source: Sampled exporting producers

201720182019IPEUR/tonne1131127111301151Index100112100102

(320) The average prices of imports from China fluctuated over the period considered. Overall, they increased by 2 %, although they dropped significantly between 2018 and 2019 and then recovered.

(321) Prices in tables 5 and 9 of this Regulation are at full scope level, and show significant price differences between the Union industry prices and the dumped imports. The investigation has shown that users purchase SWT either under tolling agreements

For an example, see page 5 of t21.001734 (Vestas).

or under full scope purchase orders. Unlike in tolling agreements, under full scope purchase orders, users purchase from SWT producers complete SWTs, including all raw materials, such as steel plates and so-called 'internals' (e.g. a lift). Under tolling agreements, all or part of the input materials are provided by the user to the producer. In that case, the producer only invoices the labour required to transform the input materials to an SWT plus any other materials that the user did not previously provide.

(322) The Commission determined the price undercutting during the investigation period by comparing for full scope purchase transactions:

(a) the weighted average prices per product type of the imports from the sampled Chinese producers to the first independent customer on the Union market, established on a CIF basis, with appropriate adjustments for post-importation costs; and

(b) the corresponding weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level.

(323) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts when applicable. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period.

(324) On the basis of the above, the dumped imports of the sampled exporting producers showed weighted average undercutting margins between 2,7 % and 5,1 %. The product under investigation is very price-sensitive. Users generally purchase SWT through bidding processes and/or requests for quotations. Offers of several suppliers are then confronted and competition is largely based on price. In such a context, the undercutting margins found are considered significant.

(325) As indicated above, the Commission applied its standard practice by comparing the Union border CIF price of the exporting producers to the ex-works price of the Union producers because it considered that comparing the prices at these respective levels ensured an objective assessment for the purpose of calculating undercutting.

(326) Following final disclosure, Suzhou Titan submitted with regard to the undercutting (and underselling) calculations that the post importation costs added to the CIF price of Chinese imports should be increased by the transport and insurance cost to the installation site, whereas the Union industry price should be taken at ex-works level. The reason it invoked for such adjustment to the import price for undercutting and underselling calculations was the high level of transport costs involved and that each section of a steel wind tower, after importation into the Union, has its own single destination. Several parties submitted that the appropriate point of comparison for the undercutting (and underselling) margins calculation should be the delivered EU landed price at the installation site, both for the Chinese and Union producers, as the final sales price by the user accounts for high transport costs, which is strongly affected by the destination of the wind farm project, and that the competition between Union producers and exporting producers takes place at that level. EWTA submitted that the Union industry’s prices for the undercutting (and underselling) calculations should be increased by the transport and insurance costs to bring them to the CIF level at the same port of entry as Chinese import prices.

(327) The Commission deemed all above claims conceptually flawed. The Union producers’ ex works prices compete with the export prices from the country concerned at CIF EU entry port level. Adding transport and insurance cost to the installation site on either the Union side or the exports side, but not both, would not be appropriate to examine price effects of imports.

(328) For the above reasons, the Commission rejected the above claims submitted by EWTA, GE and Suzhou Titan.

(329) Following final disclosure, Chengxi Shipyard submitted several claims on the undercutting and underselling margin calculations.

(330) First, it claimed that undercutting margins should be calculated on a per piece basis rather than on a per kg basis, pointing to pieces (towers) being the calculation basis for (most) injury indicators. This claim was rejected, since the Commission considered that the calculation of undercutting (and underselling) margins is disconnected from the establishment of the injury indicators (see also recitals (282) and (283)). Moreover, whether the Commission used towers or kg is irrelevant insofar as the Commission used the same values on both sides of the comparison.

(331) Second, Chengxi Shipyard claimed that, notwithstanding the additional information provided by the Commission with an additional disclosure of, inter alia, the target prices per product model of the Union industry in ranges, the final disclosure remained inadequate. Without disclosing the sales quantities, values and the exact target prices of the Union industry, the Commission had not enabled the company to check the accuracy of the injury calculations. The company considered that specific Union industry data should be provided because they are the result of the consolidation of data of three sampled Union producers.

(332) The Commission disagreed with the claim made by the company, because the target price in ranges contained all information needed to calculate the minimum and maximum underselling margin per product model and therefore allowed the exporting producers to identify potential calculation mistakes. Moreover, concerning the request to disclose quantities, values and the exact target prices the Commission recalled that the provisions of Article 19(4) of the basic Regulation oblige the Commission to take into account the legitimate interests of the parties concerned that their business secrets will not be disclosed. In this specific case, the sales price or the target price of the Union

industry is not always the result of the consolidated data of the three sampled producers, e.g. in several instances one of the three sampled Union producers had not sold the product model used for the comparison and therefore the price per model of product of the Union industry is not anymore an average of the prices of three sampled companies. The claim was thus rejected.

(333) Third, Chengxi Shipyard’s claimed that the SWT were not in direct competition with the Union industry’s product and would not have caused any injury, first, because half of its sales were not used in its injury margin calculation, and second, because some of them had a negative margin.

(334) The fact that more than 45 % of the imports from Chengxi Shipyard have not been taken into consideration is due to the methodology of the price comparison of the imports with the sales of the like product of the sampled Union producers. The Commission recalled that all imported product types compete with all product types produced by the Union producers. The fact that, for example, a product type imported from China is delivered without an internal (e.g. a lift or climbing assistance system or the temperature control system), or with a different length per section, and that therefore there is no matching for the purpose of calculating undercutting or underselling, is not an indication that such products do not compete with the like products manufactured by the Union industry, but simply confirms that each sale is customised according to the customer’s technical specifications and requirements. The claim was thus rejected.

(335) Fourth, Chengxi Shipyard claimed that the undercutting (and underselling) margins analysis was incomplete and asymmetrical in respect of the dumping calculation because all Chengxi Shipyard’s export sales were used in the dumping margin determination but not for the undercutting (and underselling) calculation. The Commission recalled that there is no requirement in the basic Regulation to use the same export sales in the dumping and injury calculations. The context of both calculations is different and the underlying dataset may also differ, bearing in mind that in the injury calculations the comparison is made between price information of exporters, on the one hand, and Union producers, on the other hand. The claim was thus rejected

(336) Finally, Chengxi Shipyard claimed that the Commission should have calculated the post-importation costs as a certain amount per quantity (per tonne or per piece of SWT) rather than a percentage of the CIF value in order to be consistent with the same cost adjustment made for calculating the export price and because the quantity is more relevant to the quantification of post importation costs. First, the Commission had to recall that the company has not substantiated or provided supporting evidence of its claim that a certain amount of post-importation cost per quantity is more appropriate. Second, the Commission sourced directly the data from the questionnaire replies of the importers/users and noticed that most of the clearance costs reported in the supporting document are based on lump sum amounts disconnected with the quantities or the weight of the goods imported. Finally, in the supporting documents that had been checked the reference to the weight or the number of unit imported were missing. The claim was thus rejected.

4.4.

Economic situation of the Union industry

4.4.1.

General remarks

(337) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an assessment of all economic indicators having a bearing on the state of the Union industry during the period considered.

(338) As mentioned in recital (9), sampling was used for the determination of the possible injury suffered by the Union industry.

(339) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission assessed the macroeconomic indicators on the basis of data from the questionnaire reply submitted by EWTA relating to all Union producers, cross-checked where necessary with the questionnaire replies from the three sampled Union producers. The Commission assessed the microeconomic indicators based on data contained in the questionnaire replies from the three sampled Union producers. Both sets of data were cross-checked remotely and found to be representative of the economic situation of the Union industry.

(340) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin and recovery from past dumping.

(341) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments and ability to raise capital.

4.4.2.

Macroeconomic indicators

4.4.2.1.

Production, production capacity and capacity utilisation

(342) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 6

Production, production capacity and capacity utilisation

Source: EWTA and sampled Union producers

201720182019IPProduction volume (towers)2704251626472443Index100939890Production capacity (towers)4859466449364952Index10096102102Capacity utilisation56 %54 %54 %49 %Index100979689

(343) During the period considered, production dropped by 10 %. Production capacity was practically stable over the period considered, as it increased by a mere 2 %. Capacity utilisation fell from 56 % in 2017 to 49 % in the investigation period.

(344) Siemens Gamesa Renewable Energy GmbH & Co KG (SGRE), a user of SWT that submitted comments, considered that the mere number of SWT produced is not representative because their size increased over time. The party reiterated that comment following final disclosure and submitted that the Commission should use as unit of measurement megawatts (MW) and gigawatts (GW), i.e. parameters that are used industry wide as an indication of the capacity installed and which also form the basis for the measurement of the output requirements for the renewable energy targets as contained in the Green Deal. The Commission dismissed the claim, as the steel wind towers market does not use MW or GW as a unit of measurement.

4.4.2.2.

Sales volume and market share

(345) The Union industry’s sales volume and market share in the Union developed over the period considered as follows:

Table 7

Sales volume and market share

Source: EWTA and sampled Union producers

201720182019IPUnion industry EU sales to unrelated customers (towers)1859189519241737Index10010210493Market share69 %59 %68 %56 %Index100869882

(346) The Union industry’s sales volume dropped by 7 % over the period considered. The Union industry’s market share fell from 69 % in 2017 to 56 % in the investigation period, which entails a decrease by 18 % overall.

(347) Following final disclosure, GE noted that the Commission calculated incorrectly the Union consumption of steel wind towers and, thus, established incorrectly the market shares of Union producers. The claim was rejected on the grounds explained in recital (304).

4.4.2.3.

Growth

(348) The Union industry’s sales volume and market share in the Union fell over the period considered by 7 % and 18 % respectively. The Union industry was thus unable to benefit from the increase in Union consumption (+14 % over the period considered, as shown in table 2).

4.4.2.4.

Employment and productivity

(349) Employment and productivity developed over the period considered as follows:

Table 8

Employment and productivity

Source: EWTA and sampled Union producers

201720182019IPNumber of employees3803381739363614Index10010010395Productivity (towers per employee)0,710,660,670,68Index100939595

(350) The level of Union industry employment related to the production of SWT dropped by 5 % over the period considered.

(351) Productivity fell from 0,71 towers in 2017 to 0,68 towers per employee in the investigation period. It should be noted that the product mix affects the number of towers per employee. Moreover, on average, SWT grow in size year after year. Therefore, the productivity drop by 5 % shown above is most likely fully offset by the fact that towers became larger during the period considered.

4.4.2.5.

Magnitude of the dumping margin and recovery from past dumping

(352) The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the country concerned.

(353) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

4.4.3.

Microeconomic indicators

4.4.3.1.

Prices and factors affecting prices

(354) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 9

Sales prices and cost of production in the Union

Source: Sampled Union producers

201720182019IPAverage unit sales price to unrelated customers (EUR/tonne – full scope sales only)1265137714591419Index100109115112Unit cost of production (EUR/tonne – full scope sales only)1191138515381439Index100116129121

(355) Over the period considered, the average unit sales prices of full scope orders for Union-origin SWT increased by 12 %, while the unit cost of production increased to a larger extent, i.e. by 21 %.

4.4.3.2.

Labour costs

(356) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 10

Average labour costs per employee

Source: Sampled Union producers

201720182019IP(EUR)45411454274812148593Index100100106107

(357) During the period considered, the average labour costs per employee increased by 7 % following the general inflation and labour cost trends. Annual labour costs growth rates, for the whole EU economy, were up to 3% and more in 2018 and 2019 and up to more than 4% in 2020.

https://ec.europa.eu/eurostat/documents/2995521/11563131/3-16062021-AP-EN.pdf/72b7ff6f-1830-8182-a6ae-0d8bb61aaf24?t=1623831696586#:~:text=In%20the%20fourth%20quarter%20of,salaries%20and%20non%2Dwage%20costs.

4.4.3.3.

Inventories

(358) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 11

Inventories

Source: Sampled Union producers

201720182019IPClosing stocks (sections)0[30-40][30-40]0Index01001000

(359) The Commission found that inventories were not a meaningful injury indicator with regard to the production of SWT. Producers produce SWT based on orders and usually keep no physical inventories. The very minor closing stock quantities reported in table 11 concern SWT produced but not yet sold.

Page 5 of t21.000376 (EWTA).

.

4.4.3.4.

Profitability, cash flow, investments, return on investments and ability to raise capital

(360) Profitability, cash flow, investments and return on investments of the sampled Union producers developed as follows over the period considered:

Table 12

Profitability, cash flow, investments and return on investments

Source: Sampled Union producers

201720182019IPProfitability of sales in the Union to unrelated customers (% of sales turnover)3,6 %1,1 %-4,5 %-1,4 %Index10031-126-40Cash flow (EUR)12444710-377687-17013650-5531711Index100-3-137-44Investments (EUR)367152481548238352754273488463Index100421410Return on investments16,5 %-4,5 %-18,9 %-4,6 %Index100-27-115-28

(361) The profitability of the Union industry shrank from +3,6 % in 2017 to – 1,4 % in the investigation period. The net cash flow was negatively affected by falling profits and was negative between 2018 and the investigation period. The ability to raise capital was hindered by the drop in profits. The level of yearly investments followed a steady downwards trend and dropped by 90 % in the period considered.

(362) With regard to cash flow, SGRE noted that GRI had reported in its questionnaire reply that its ability to raise capital had not been affected by injurious dumping and that investments were self-financed or financed through bank credits. In the same vein, it argued that Windar had reported that its ability to raise capital had not been affected as no dividend was distributed and profits had been used to reinforce the balance structure, whereas investment had been financed by either own cash flow or long term bank credits. The investigation showed however that, as shown in the table above, the profits of sampled Union producers shrank and potentially hindered their investments. Moreover, the fact that Windar was not able to pay out dividends to its shareholders, which was the result of fallen profits, and that Windar had to resort to bank credits in order to make investments, as mentioned above, showed that they were already in a fragile financial situation. Bank credits naturally came at additional costs in the form of payable interests which also will have been higher than in a situation where Windar had been financially sounder.

(363) Following final disclosure, SGRE stated that the fact that a company resorts to bank credits for the purpose of making investments does not mean that it is in a fragile situation. The Commission agreed that the mere fact that Windar relied on bank credits for the purpose of making investments cannot, in the abstract, be seen as evidence of injury. However, the Commission considered that this fact has to be seen in combination with other factors, as it did in recital (362). SGRE’s statements did not change that conclusion.

(364) SGRE referred to the US ITC investigation against Spanish steel wind towers. It suggested that if Spanish producers such as Windar would sell their SWT exports to the US at prices below their domestic prices, it would consider its cost of production and profitability on the domestic market sufficient. However, for many reasons the Commission failed to see the rationale behind this allegation which, moreover, is based on allegations in a complaint (petition) under investigation by third country authorities. In addition, this allegation is flawed because price discrimination (if any and if proven) can have many causes, so even if Windar’s domestic (EU) prices were higher than its export prices to the US, that does not necessarily mean that the domestic prices were (sufficiently) profitable. The Commission also underlined that it established the data for the micro-indicators on the basis of a sample of three Union producers. The suggestion was thus firmly rejected.

4.5.

Conclusion on injury

(365) The above assessment of economic macro- and micro-indicators shows that the Union industry was suffering material injury in the investigation period, as it lost significant market share and its sales prices increase was insufficient to pass on the strong increase in its costs of production, resulting in a collapse of its profitability, which negatively affected investments, return on investments and cash flow.

(366) The fact that a few indicators (production capacity, stocks) did not deteriorate does not undermine the finding of injury.

(367) Some parties (CCCME, SGRE, GE) submitted that in the last part of the reference period used in the complaint, some indicators improved. The investigation found that during the investigation period this is only the case for the financial indicators, as the strong drop in cost of production between 2019 and the investigation period indeed had a positive effect on the financial situation of the Union industry. However, the Union industry was still making significant losses in the investigation period. Thus, even if that indicator improved between 2019 and the investigation period, it does not undermine the finding of injury with regard to it.

(368) On the basis of the above, the Commission concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

1. CAUSATION

5.1.

Effects of the dumped imports

(369) Over the period considered, the Union industry lost sales to Chinese imports. The import volumes from China increased strongly (by 54 %) and their market share increased by nine percentage points, from 25 % in 2017 to 34 % in the investigation period. In the same period, and despite the 14 % increase in consumption, the Union industry’s sales volume dropped by 7 % over and its market share fell from 69 % in 2017 to 56 % in the investigation period.

(370) In terms of prices, Chinese import prices were significantly below the Union industry sales prices and also below the Union industry cost of production throughout the period considered, leading to price suppression. The price pressure exerted by the high and increasing import volumes from China at such prices over the period considered is a clear explanation for the Union industry’s inability to reflect the cost increases in its sales prices and the resulting losses.

(371) On the basis of the above, the Commission concluded that the imports from China caused material injury to the Union industry. Such injury had both volume and price effects.

(372) Both SGRE and GE stated that there was no correlation between the complainants’ declining profits and the alleged dumped imports as profits declined sharply as from 2018 and Chinese import prices increased. CCCME stated that Chinese imports could not have caused injury to Union producers as the quantities of Chinese imports dropped while their prices increased.

(373) The Commission disagreed. Overall, Chinese import prices increased by 2 % over the period considered, as shown in Table 5. However, they remained below the Union industry’s prices and its cost of production throughout the period considered. In addition, Chinese import prices decreased between 2018 and 2019. With regard to the volumes of imports from China, the investigation showed that they increased by 54 % between 2017 and the investigation period and still by 7 % since 2018.

5.2.

Effects of other factors

5.2.1.

Imports from third countries

(374) The volume of imports from other third countries developed over the period considered as follows:

Table 13

Imports from third countries

Source: EWTA (towers, market shares) and Eurostat (average price)

Country201720182019IPTurkeyVolume (towers)3412148134Index100356141393Market share1,3 %3,8 %1,7 %4,3 %Index100301134344

Average price

(EUR/tonne)

1844183016461691Index100998992VietnamVolume (towers)311094498Index100351142315Market share1,2 %3,4 %1,5 %3,2 %Index100297135277Average price (EUR/tonne)1712168115921475Index100989386Republic of KoreaVolume (towers)85693441Index100814049Market share3,1 %2,1 %1,2 %1,3 %Index100683843Average price (EUR/tonne)2111199721402381Index10095101113

Others (Indonesia, Malaysia)Volume (towers)813914Index100163113175Market share0,3 %0,4 %0,3 %0,4 %Index100137107153Average price (EUR/tonne)1712418422382896Index100244131169All third countries aboveVolume (towers)158312136287Index10019786181Market share5,9 %9,8 %4,8 %9,3 %Index10016782159Average price (EUR/tonne)1931187617761783Index100979292

(375) During the period considered, imports from third countries other than China were limited. Their combined market share went from 5,9 % in 2017 to 9,3 % in the investigation period. The Commission noted that average prices of imports from third countries other than China were assessed based on Eurostat data for CN codes 73082000 and 73089098. These CN codes cover imports of a much larger range of goods than only SWT but they represent the best information available in the present investigation. As these prices were consistently and significantly higher than the prices of imports from China, it may reasonably be concluded that the underlying imports of SWT did not undercut Union industry sales prices.

(376) Volumes in the above table are best estimates as provided by EWTA. EWTA’s methodology is described in section 4.3.1.

(377) Upon request, some users submitted data to the Commission with their import volumes and prices from third countries other than China. However, given the limited number of users, the limited import sources used by each of them and the different methodologies used for their reporting, and the scarcity of data, such information was not found to be reliable nor could be meaningfully disclosed.

(378) Table 13 shows average prices according to Eurostat data for Combined Nomenclature codes 73082000 and 73089098 together. WindEurope asked the Commission to assess injury on the grounds of data for the first code only, in line with the US ITC

Page 14 of t20.007935.

. The Commission found the request unfounded as the investigation revealed imports under 73089098 during the investigation period. No co-operating parties reported imports under code 85023100. In addition, the Commission noted the same as in recital (375) with regard to the accuracy of the underlying data.

(379) No party suggested that imports from third countries other than China might have caused injury to Union producers. Moreover, the Commission noted that such imports represented less than a third of the imports from China over the period considered.

(380) In light of the above, the Commission concluded that imports from third countries other than China did not cause injury to the Union industry during the period considered.

5.2.2.

Export performance of the Union industry

(381) The volume and prices of exports of the Union industry to unrelated parties developed over the period considered as follows:

Table 14

Export sales

Source: EWTA (volumes) and sampled Union producers (average prices)

201720182019IPExport volume (towers)743421357371Index100574850Average price (EUR/towers – only full scope orders)311479n.a. 559982643024Index100-180206

No full scope export sales in sample

(382) During the period considered export volumes by Union producers halved. The sampled producers were not in a position to provide a EUR/tonne price for those sales, therefore the prices reported above are per SWT and they thus also reflect the increase in average size over the period considered. The average prices reported above are moreover significantly affected by differences in product mix. Thus, it was not possible to draw any meaningful conclusion as to the impact of export to third countries. At most, as exports at its peak in 2017 represented 28 % of Union sales in 2017, the fall in export sales may have contributed to the injury suffered to some extent but, in any event, it did not attenuate the causal link with the dumped imports.

5.2.3.

Offshore demand

(383) Vestas referred to the volatility of offshore demand as a source of injury and, like GE, blamed injury on the underutilisation of offshore production facilities in the Union. GE noted that prior to 2017 Union producers had made strong investments in developing expensive production facilities with a view to serving offshore demand that, in the end, had to be used for producing onshore SWT or remained idle. For SGRE and GE, the drop in profitability of the Union SWT industry derived from a decline in demand for offshore SWT.

(384) The above claims are contradicted by WindEurope’s publication Offshore wind in Europe – Key trends and statistics 2020, released in February 2021. Figure 1 therein shows that the cumulative installed offshore wind capacity in the Union increased between 2017 and 2018 at a strong pace by about 16 % and continued to grow even stronger by 20 % p.a. in 2019 and 2020. Whereas it amounted to about 8,8 GW in 2017, in 2020 the installed offshore wind capacity in EU27 amounted to about 14,6 GW

Following a double-check, some of the figures in this sentence and the preceding sentence have been slightly revised between final disclosure and publication of this Regulation, but these changes do not materially change the analysis and the conclusions.

. WindEurope predicted rather a positive outlook for offshore installations

Wind energy in Europe – 2020 statistics and the outlook for 2021-2025, WindEurope, February 2021, pages 9 and 31-32.

. The Commission also noted that the investigation did not show that Union producers were systematically using facilities meant for offshore SWT for producing onshore SWT – GE itself acknowledged that the facilities meant for offshore SWT of certain Union producers were fully booked

Page 3 of t21.000509.

.

(385) After final disclosure, GE interpreted WindEurope’s published figures differently. It concluded from the mentioned chart that demand for offshore wind installations declined between 2017 and 2018, then slightly recovered between 2018 and 2019 and declined again from 2019 to 2020. On that basis, it concluded that the Union’s offshore market contracted over the period considered. However, whereas the Commission had adjusted the figures to include only Member States of the Union, i.e. it had excluded the reported volumes concerning the United Kingdom, it appeared that GE had failed to do so and thus that it based its conclusions on a wrong dataset. Indeed, if the United Kingdom is excluded from the mentioned chart, there is no drop in demand for offshore wind installations between 2019 and 2020 but rather a strong increase by around 20 %. Overall, as mentioned, the cumulative installed offshore wind capacity in the Union significantly increased from 8,8 GW to 14,6 GW over the period considered, i.e. by 66 %.

(386) As to GE’s comments related to underutilisation of offshore production facilities, they are contradicted by the party’s comments clarifying that the fully booked facilities referred in recital (384) were those of only one Union producer. The Commission is reassured that the investigation did not show that Union producers were systematically using facilities meant for offshore SWT for producing onshore SWT.

(387) For all the above reasons, the Commission rejected the repeated claim that a decline in the offshore demand would have negatively impacted the profitability of the Union industry and contributed to the injury.

5.2.4.

Raw material prices

(388) Steel plates account for a major share (around 40 %

Page 6 of t21.000376 (EWTA) and page 17 of t21.008141 (GE), inter alia.

) of the cost of production of SWT. In the view of CCCME, SGRE and GE, it was the imposition of a number of trade defence measures against imports of steel, including the currently applicable safeguard measures, into the Union that depressed the profitability of the Union industry rather than Chinese imports. CCCME repeated this comment after final disclosure, adding that in view of the other trade defence measures in place, the increase in cost of production was so substantial that it cannot be offset by increasing prices. More generally, following final disclosure SGRE stated that the Commission’s analysis should have involved a closer assessment of whether the 21 % increase in the cost of production did not attenuate the causal link between the allegedly dumped imports and any injury alleged to exist on the part of the Union SWT industry.

(389) The Commission found the claims unfounded. No party substantiated, let alone quantified with data, the effect of any particular trade defence measure on SWT producers’ overall production cost by taking account of the Union industry’s past and subsequent sourcing of steel products subject to trade defence measures, if any. Moreover, the Commission has pointed, in the final disclosure document as well as in section 4.4.3.1, at the raw material cost development over the period considered, also in comparison to the sales price development. The Commission underlined that in a level playing field, Union producers are able to reflect (raw material) cost increases in their sales prices. However, Union SWT producers were unable to increase their prices (not even to cover their costs) due to the price pressure exerted by the Chinese imports. Therefore, the increase in overall production cost, whether or not triggered by any trade defence measures, could not attenuate the causal link established between dumped imports from China and the material injury suffered by the Union industry.

5.2.5.

Production facilities issues

(390) SGRE suggested that the opening of new and more modern SWT production facilities in the Union had caused injury to Union producers as it resulted in the closure of other (older) SWT production facilities in the Union. Following final disclosure, the party stated that the internal competition resulting from the opening of GRI Sevilla in Spain in 2017, of Haizea Bilbao in Spain in 2018 and of Windar France in 2020 had not been sufficiently addressed by the Commission. According to SGRE, the opening of Windar France (favourably located at the coast) had made Windar’s facility in Olazagutía, Spain (unfavourably located 100 km in-land) redundant and resulted in its closure in 2019. No further information was provided to substantiate this claim. Absent of any other submissions with regard to the issue, the investigation could not establish that the opening of new production facilities in the Union had, per se, an injurious effect on existing ones.

(391) Vestas and SGRE blamed injury on poorly placed manufacturing facilities of Union producers but failed to substantiate these allegations. The investigation showed that the Union market for SWT, with an annual consumption of around 3000 units in the investigation period, is not a high volume market and therefore producers cannot limit their sales to nearby sites only. However, each of the sampled Union producers sold SWT also to destinations in their own Member State, or in proximity to it in the investigation period. The claims are dismissed.

5.2.6.

Competition of wind power with other energy sources

(392) For some parties, the fact that in the Union new wind power electricity generation projects compete directly with producers of other energy sources, in particular solar panels (mostly produced outside of the Union), increased the pressure to produce steel wind towers for increasingly lower prices. So did the increased reliance on auctioning of new renewable capacity since 2017 prescribed by the relevant guidelines for the period 2014-2020

Communication from the Commission — Guidelines on State aid for environmental protection and energy 2014-2020, OJ C 200, 28.6.2014, p. 1–55

. The Commission found that the alleged competition with other energy sources does not exist in many projects (see also recital (447)). As to auctioning, according to the available statistical data, prices of towers declined more between 2009 and 2016 than after 2016. The argument was therefore rejected.

(393) Vestas, WindEurope and SGRE stated that any reduced prices or profitability for SWT were a logic consequence of the substantial competition and price pressure in the wind sector as a whole. In this context, Vestas, SGRE, WindEurope and CCCME referred to some developments in the Union wind energy sector (namely an ever-increasing pressure to reduce the number of electricity cost discrimination schemes, inconsistent national policies, a lack of visibility on forward volumes and lower profitability of wind farm projects due to the changes to the form and level of subsidization of renewables in the Union (with a shift from feed-in-tariffs to feed-in-premiums)) which, in their view, pushed a number of European users into losses in 2018 and 2019. The Commission acknowledged these issues but found the overall claim unfounded. Increased competition at end user level under normal circumstances does not result in injury at their suppliers’ level. The reason that Union industry prices of SWT were dragged down was the wide and increasing availability of low prized imports from China. Had the competition at that level been at a level playing field, then prices and profitability of SWT producers would not have been depressed to the same extent. Therefore, the increased price pressure for the user industry could not attenuate the causal link established between dumped imports from China and the material injury suffered by Union SWT producers.

5.2.7.

Non-steel towers

(394) SGRE stated that internal competition from non-steel towers constitutes a potential distinct cause of injury to the Union industry. Following final disclosure, the party insisted that Wood Mackenzie’s publication Global wind turbine technology trends 2019 showed a 10 % increase in hybrid towers, and a 16 % decrease in steel towers over the period 2017-2024, while WindEurope forecasted a decrease in the SWT market value in the coming years. The Commission acknowledged the matter. However the number of non-steel towers in the Union in the period considered was low

EWTA estimated that concrete and hybrid towers account for circa 6% of total towers used in wind turbines consumed in the EU27 over the reference period, with no significant increase throughout the years. It also noted that all concrete and hybrid towers mount a steel tower section at their top, to which the nacelle is attached (t21.004376).

and these towers are not suitable for many projects. Non-steel towers could thus not attenuate the causal link established between dumped imports from China and the material injury suffered by Union SWT producers.

5.2.8.

Other factors

(395) CCCME stated that significant investments made by Union SWT producers, in particular in 2017, put pressure on Union SWT producers’ profit during the subsequent years when demand contracted. First, demand did not contract after 2017. Second, in 2017, the Union SWT producers generated a cash-flow that represented more than a third of the investments made in that year. Together with accumulated profits and cash-flow generated in the years prior to 2017 when no injurious dumping took place, Union producers had sufficient funds to finance these investments. The investigation showed, however, that investments of sampled Union SWT producers were justified replacements, changes required by market demand and necessary equipment upgrades aimed at serving users.

(396) SGRE pointed at GRI’s increased depreciation as a cause of injury. The investigation found that GRI’s depreciation was in line with the applicable national and international accounting standards. Moreover, the investigation could not establish that any changes in GRI’s depreciation affected the causal link established between dumped imports from China and the material injury suffered by the Union industry overall.

(397) Vestas blamed injury on the weakening of the Chinese currency, which improved the competitiveness of Chinese SWT. The Commission found, however, that this claim was flawed. Chinese SWT producers were found to invoice exports to the Union either in USD or in EUR. The USD was in fact relatively strong during the investigation period, in a range between 1,07 and 1,14 per EUR/USD. By contrast, EUR/USD stood at over 1,18 in August 2020 and over 1,22 in January 2021. Therefore, currency fluctuations could not cause the material injury suffered by the Union industry.

(398) After final disclosure, CCCME claimed that the decrease in consumption in 2019, which covers half of the investigation period, was a causal factor to the injury. In this respect, it also pointed at the relatively low level of installed capacity in Germany in 2019 and in particular in 2020. The Commission rejected the claim, as the Union consumption in 2019 was still 5 % higher as compared to 2017 and the drop in consumption in 2019 was of a temporary nature and followed by a strong increase by 8 % in the investigation period.

(399) CCCME also claimed after final disclosure that the Commission should have addressed the impact of the Covid-19 pandemic on the injury, as it had caused a significant economic downturn and heavily impacted global supply chains. The Commission noted that the investigation period ended in the middle of 2020 and that there were no signs that demand for SWT shrank or raw material sourcing problems started to occur during the last four months of the investigation period, when the pandemic landed in the Union. CCCME’s claim was therefore rejected.

5.3.

Conclusion on causation

(400) On the basis of the above, the Commission concluded that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury.

1. LEVEL OF MEASURES

(401) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

6.1.

Injury margin

(402) The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

(403) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

(404) The complainants stated that 10 % was a reasonable target profit as it was allegedly attained by certain complainants during the period covered by the complaint

t21.000144 (EWTA).

. Several users claimed that the level of profit put forth by the complainants was, however, unreasonably high.

(405) Article 7(2c) of the basic Regulation sets the minimum target profit at 6 %. The investigation showed that during the whole period considered, imports from China had a large market share in the Union and the profitability of the Union industry was below 6 %. The Commission therefore assessed the profitability of the Union industry during the six years prior to the period considered and it found that in the years 2015 and 2016, that is, the two years prior to the reference period, its profitability was at 8,4 % and 9,8 % respectively

This is the weighted average profit of the sampled Union producers.

. The Commission has no information with regard to the level and prices of imports prior to the period considered. However, the profit levels achieved in those two years suggest that the industry’s sales prices were in any event not depressed by Chinese imports, even if such imports had been present on the Union market in significant volumes in 2015 and 2016. The Commission therefore considered that a target profit of 9,1 %, which is the average profit achieved by the Union industry in these two years, is reasonable as during the period considered the Union industry’s profitability was already affected by the high level of imports from China. This target profit was added to the Union industry’s actual cost of production to establish the non-injurious price.

(406) Following final disclosure, Suzhou Titan deemed that the adjustment of 0,5 % of the CIF value made by the Commission to cover the post-importation cost as too low in light of the transportation cost born by users and the (higher) adjustment made by the Commission in other investigations. The Commission dismissed the claim. The adjustment made is based on the data provided by the co-operating users and remotely cross-checked by the Commission, and is thus case-specific.

(407) Following final disclosure, CCCME stated that the target profit should be 6 %, as the profitability of the Union industry over the past couple of years was below 6 % and it would not be representative for the current market circumstances to rely on 2015 and 2016 data. The Commission rejected the claim. For the reasons set out above, the profitability during the period considered cannot be used as a benchmark while the profitability during the two years before that conforms to the requirements of Article 7(2c).

(408) In its comments to the final disclosure, GE found the methodology described above flawed. GE stated that Union industry’s prices were not depressed during the period considered and deemed it unnecessary for the Commission to refer back to the years prior to the period considered because, in its view, the surge of imports of SWT from China occurred only in 2019. The Commission found such claim unfounded in light of table 4 of this Regulation, which clearly shows a 44 % increase in Chinese imports between 2017 and 2018 and a market share of Chinese imports of not less than 25 % in 2017, still the lowest rate in the period considered. GE also submitted, based on data in the complaint, that the levels of Chinese imports were comparable in 2016, 2017 and 2018. However, the findings of this investigation (see table 4) as disclosed to interested parties yield import figures in the period considered which are very different from those in the complaint, whereas the Commission does not possess import figures of only SWT prior to that period. Therefore, as mentioned, the level of imports from China in 2015 and 2016 is not known but the profitability achieved by the Union industry in those years suggests its sales prices were not depressed by Chinese imports as explained in recital (405). GE requested a target profit of 6 % since this would almost double the level of profit achieved by the Union (industry) at the beginning of the period considered and would constitute a 7,4 % increase from the level of the investigation period

t21.006703, p. 7.

. This reasoning does not take into consideration at all the relevant provisions in the basic Regulation. The Commission therefore rejected the claim.

(409) None of the sampled producers made a claim under Article 7(2c) of the basic Regulation for investments foregone or R&D and innovation costs. Also no claims were made pursuant to Article 7(2d) of the basic Regulation, i.e. concerning the future costs that the Union industry will incur resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia to the basic Regulation, during the period of the application of the measure pursuant to Article 11(2).

(410) The Commission then determined the injury elimination level on the basis of a type-by-type comparison of the weighted average import price of each sampled exporting producer in the country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

(411) Suzhou Titan, GE and EWTA made the same comments with regard to the level of price comparison to be used for the underselling calculations as the ones made for the undercutting calculations (addressed in recitals (326)-(328)). The claims are rejected for the same reasons as spelt out in those recitals, applying mutatis mutandis.

(412) GE and Vestas claimed that the undercutting margin should be considered as the injury margin. The Commission rejected the claim as such approach would result in a duty level that would not remove the injury caused by dumped imports to the Union industry, contrary to the applicable rules.

(413) Following final disclosure, Suzhou Titan cast doubts about the credibility of the margins determined in the way explained in recital (410) given the level of matching between its sales and Union sales disclosed. The party asked for a distinction between onshore and offshore steel wind towers in the calculations, for a more comprehensive and complete consideration on its exports in them, while stating that PCNs with negative underselling margins could not have caused injury. The Commission dismissed the claims. The Commission clarified that calculations were based only on onshore steel wind towers. The PCN matching is overall substantial and allows for a clear picture in terms of injury margin. The fact that few PCNs show negative underselling margins does not have an impact on the injury margin calculation or alter the conclusions on injury.

(414) CCCME requested the Commission to disclose the matching level should certain PCN parameters not have been removed / relaxed. The Commission considered it irrelevant to disclose a scenario that had not been retained for the purpose of the calculations.

(415) The exporting producer Chengxi Shipyard claimed that underselling margins should be calculated on a per piece rather than on a per kg basis. The claim was rejected for the same reasons as spelt out in recital (329), applying mutatis mutandis.

(416) The injury elimination levels for other cooperating companies and for all other companies were established in the same manner as the dumping margins for these companies (see recitals (287) and (290)). On this basis, with regard to the residual injury margin, the Commission considered it appropriate to establish it at the level of the weighted average injury margin determined for the product types most exported by Suzhou Titan, the sampled exporting producer with the highest individual injury margin. These product types represented more than 50 % of this company’s exports of the product under investigation to the Union during the investigation period.

CompanyDefinitive dumping margin (%)Definitive injury margin (%)Chengxi Shipyard127,87,5Penglai Dajin49,77,2Suzhou Titan60,714,4Other cooperating companies83,211,2All other companies144,219,2

(417) Following final disclosure, EWTA claimed that the proposed duties were insufficient to remove the injury caused by dumped imports to the Union industry; these duties would not restore a level playing field and a fair price level on the Union market and they would not improve the Union industry's profitability. They would fail to meet the requirements of Article 9(4) of the basic Regulation according to which the lesser duty should be applied when adequate to remove the injury to the Union industry.

(418) EWTA added, with reference to Article 7(2) and (2a) of the basic Regulation, that EU primary legislation warranted the imposition of tariffs at the dumping margin level and that if the Commission deviated from the requirements under Article 7(2) and apply a lesser duty pursuant to Article 7(2a) then the Commission should examine whether a duty lower than the margin of dumping would be sufficient to remove injury and take into account the existence of distortions of raw materials with regard to the product concerned.

(419) According to EWTA, the basic Regulation institutes a provision at Article 7(2) which aims at providing the maximum protection of EU’s interests. EWTA argued that the Commission should conduct the necessary examinations in order to deviate from Article 7(2) and verify whether the conditions are fulfilled to set the level of duties at a lower level. In connection with the above point, in EWTA’s view, the Commission does not have any margin of discretion and there does not appear to be any other EU primary legal basis allowing the Commission to deviate from these provisions of the basic Regulation, let alone to delegate to the complainant the obligation or task to investigate and prove this point. In this context, EWTA noted that for their part, the complaint provided reasonable facts and arguments and clearly requested the Commission to set the duties at the dumping margin level on account of the serious distortions with regard to the key raw material in question, which the Commission had itself already established on several recent occasions. In this context, EWTA referred to section 2.7.2. of the complaint, which showed the evolution of the significant price differential for steel plates between the Union and the People’s Republic of China, which must be understood as falling within the meaning of Article 7(2a) of the basic Regulation covering the point that price of a raw material is significantly lower as compared to prices in the representative international markets. Moreover, EWTA noted that since the Commission had already established the existence of the distortions for the raw materials in question, as well as in other key inputs such as energy and labour, it should be straightforward to integrate these aspects to waive Article 7(2a) and enforce duties on the basis of Article 7(2). In light of the foregoing, EWTA maintained their request to impose the duties at the dumping margin level in line with Article 7(2) of the basic Regulation and claimed to find an efficient, effective and constructive legal way of ensuring that this requirement of the basic Regulation is fulfilled.

(420) The Commission noted that the general rule to calculate a duty level is laid down in Article 7(2) of the basic Regulation, which is to give priority to the injury margin whenever that is lower than the dumping margin (the lesser duty rule). Normally, such injury margin will, by definition, remove the injury suffered by the Union industry, as it is calculated by adding to the actual cost of production incurred by the Union industry a target profit, as established in accordance with Article 7(2c) of the basic Regulation.

(421) An exception to the general rule is, as EWTA rightly pointed out, laid down in Article 7(2a) of the basic Regulation, which foresees to take into account whether there are distortions on raw materials with regard to the product concerned.

(422) The fourth subparagraph of Article 7(2a) of the basic Regulation states that the investigation shall cover any distortion on raw materials identified in the second subparagraph of this paragraph, for the existence of which the Commission has sufficient evidence pursuant to Article 5. Article 5 of the basic Regulation sets out the provisions regarding the initiation of proceedings. At initiation, the complaint did not provide any evidence of the existence of any of the measures listed in the second subparagraph of Article 7(2a) of the basic Regulation in the PRC, and the Commission did not have any evidence of the existence of such measures either. Consequently, the Commission’s investigation could not cover such distortions. EWTA’s claim was therefore rejected.

6.2.

Conclusion on the level of the measures

(423) Following the above assessment, definitive anti-dumping duties should be set as below in accordance with Article 9(4) of the basic Regulation:

CompanyDefinitive anti-dumping dutyChengxi Shipyard7,5 %Penglai Dajin7,2 %Suzhou Titan14,4 %Other cooperating companies11,2 %All other companies19,2 %

1. UNION INTEREST

7.1.

Interest of the Union industry

(424) No SWT producer in the Union opposed to measures. Measures are expected to restore a level playing field and a fair price level on the Union market and improve the Union industry's profitability.

(425) The Union industry underwent restructuring in the period considered and is constantly attentive to improving its efficiency in terms of cost efficiency and innovation and better serve customers. Nevertheless, the complainant submitted that in 2018-2019, four Union SWT producers had to initiate insolvency proceedings

Complaint, p. 44.

.

(426) If there were no measures, some other Union producers might have to follow suit, reduce their SWT activities or even dismantle them, and cut jobs

Following final disclosure, one Union producer (Windar) noted the loss of 73 jobs following the closure of one factory in Spain during the period considered.

. This might leave users with even more limited sources of supply, delay lead times and negatively affect competition in the market. The loss of know-how in the Union is not desirable in a context of the Union’s targets for onshore and offshore wind installations for the coming years. The capacity utilisation rate in table 6 above shows that, contrary to what some parties claimed, the Union industry can meet demand in the Union and still has spare capacities.

(427) Protecting SWT producers in the Union would strengthen the renewable value chain in the Union and a sustainable business model based on security of supply and fair competition. An increase in demand of the wind energy installations is expected in the coming years. Consequently, WindEurope expects that the market value for wind towers will grow by 2,4 % per year until 2029 to reach €4 billion

Page 7 of t20.007935 (WindEurope).

.

(428) In the absence of measures, the situation of the Union industry is very likely to further deteriorate. There is substantial excess capacity of SWT production in China. Such capacity exceeds 23000 towers per annum, i.e. 100 % of the world’s demand

Source of estimates: complaint and section I.3 of the questionnaire replies of sampled Union producers.

, in a context where Chinese SWT producers face trade defence measures in several parts of the world, such as USA

Investigations 701-TA-486 and 731-TA-1195-1196 (Review) of the United States International Trade Commission, ended on 5 February 2019, https://usitc.gov/investigations/701731/2018/utility_scale_wind_towers_china_and_vietnam/full_review.htm.

, Australia

ADRP Report No. 100, Wind Towers exported from the People’s Republic of China and the Republic of Korea, April 2020, Anti-dumping Review Panel, Australian Government & Minister's Decision published on 9 July 2020, https://www.industry.gov.au/data-and-publications/anti-dumping-review-panel-past-reviews/wind-towers-exported-from-the-peoples-republic-of-china-and-the-republic-of-korea.

or Mexico

Resolución final de la investigación antidumping sobre las importaciones de torres de viento originarias de la República Popular China, independientemente del país de procedencia, 21.09.2020, Estados Unidos Mexicanos.- ECONOMÍA.- Secretaría de Economía. http://www.dof.gob.mx/nota_detalle.php?codigo=5601838&fecha=05/10/2020.

, making an further increase of Chinese imports to the Union very likely.

(429) Following final disclosure, EWTA and several Union producers complained about the lengthiness of the procedure to impose definitive measures and the disclosed level of the duties, which they considered too low to sufficiently protect the Union industry. The Commission dismissed such comments. The time-line of the investigation has been in full compliance with the relevant legal provisions and the Commission has taken due care before reaching its conclusions. Furthermore, the Commission calculated the anti-dumping duties to be imposed by using datasets submitted by the relevant parties as cross-checked and by applying all the relevant provisions of the basic Regulation.

(430) In light of the above, the Commission concluded that the imposition of anti-dumping duties would be in the interest of the Union industry.

7.2.

Interest of unrelated importers

(431) The Commission found that the SWT business is essentially a disintermediated one as users purchase SWT directly from SWT producers. Users in the Union normally take care of importation of SWT.

(432) No companies taking care of only importation of SWT cooperated in the investigation. A company in Hong Kong related to the Chinese group Envision (a wind turbine developer) filled in a questionnaire intended for unrelated importers in the Union and deemed measures unnecessary to ensure fair competition in the SWT market. The investigation showed that the respondent is part of a group which main interests are equivalent to those of a user of SWT.

(433) In light of the above, the Commission concluded that there is no evidence that the imposition of anti-dumping duties would impact importers.

7.3.

Interest of users

(434) Typically, the product under investigation is sold directly by SWT producers to wind turbine producers, which are users in this proceeding to the extent they assemble the SWT with a full wind turbine.

(435) The users GE and Vestas, which together accounted for at least 50 % of Union consumption during the investigation period, submitted questionnaire replies and some further information upon request. In addition, the users SGRE and Nordex submitted certain information about their purchases upon request. These four companies are amongst the top ten biggest wind energy wind turbine manufacturers

Page 1 of t20.007935 (WindEurope).

.

(436) CCCME considered that users were a successful example of globalisation and international cooperation by integrating components from all over the world, including Chinese SWT. CCCME stated that measures on Chinese-origin SWT would affect the supply chain and delay wind projects as users have complex long qualification processes for suppliers. The Commission disagreed as measures will restore the level playing field and not close the door for imports from China. Moreover, the user industry is in its supply chain not depending on China for the supply of SWT, as it sources from many other qualified suppliers in the Union and elsewhere. The issue is further addressed in recital (443) below.

(437) The association WindEurope and several wind turbine manufacturers voiced the concerns of users. Several users stated that they could not absorb anti-dumping duties on SWT because they were paying anti-dumping and anti-subsidy duties on other various raw materials used in wind turbines and because SWT costs are a significant share of the costs of a wind turbine. Some users noted the losses made by several of them in the Union in the recent past. SGRE noted that users were announcing low profits for 2021

Comments following final disclosure, available on page 6 of t21.006735.

. Some alleged that measures would increase SWT prices (including Union-origin ones), negatively affect the users’ profits and some of their activities, freeze hiring and close their less competitive manufacturing facilities in certain parts in the Union. In this respect, WindEurope stated that in 2019 the European wind industry represented over 300000 jobs, of which over 50000 were direct jobs provided by wind turbine manufacturers, while it generated significant revenue and contributed to the EU GDP. Several users stated that imports were necessary and feared a lack of capacity and (an exacerbation of) supply problems in the Union, namely for larger sizes

Following final disclosure, SGRE stated that the Union industry was not equipped to cater for the ever-increasing demand for large-scale SWTs. The party said that, at present, there was no capacity in the Union to meet the XXL-tower dimension demands.

. SGRE alleged higher costs for users due to the need to source from sub-optimal suppliers in respect of specific locations. GE stated that capacity should be analysed separately for onshore versus offshore towers and alleged that the complainants were operating at almost full capacity for the production of onshore SWT and that, on several occasions, they had been unable to meet GE’s needs with respect to specification requirements or within the necessary lead times (and sometimes not at all). According to GE, GRI was pushing Union SWT demand to its production facilities in Turkey and India. SGRE noted that GRI’s questionnaire reply showed that the company had to purchase SWT to meet demand. Some of the claims, namely those concerning higher costs for users and supply matters, were reiterated following final disclosure. All the claims in this recital are addressed in the following recitals.

(438) As a preliminary remark, the Commission noted that most of the users’ general statements as to the impact of the duty were made in view of the allegations in the complaint, with calculated dumping margins of more than 50 % and injury margins of up to 20 %. In other words, they did not take account of the level of the duties as per the current investigation.

(439) Parties differed in the quantification of SWT costs within wind turbine costs, with percentages varying in the range 20 %

On page 7 of t20.007935, WindEurope noted that, on a global average basis, towers constitute over 20 % of the cost of a wind turbine (be it onshore or offshore).

– 30 %. No evidence on the case file suggested that users are unable to pass on cost increases on SWT caused by the proposed duty, if any, to project developers or other parties. Moreover, with regard to the reference period, the investigation showed no losses for the cooperating users GE and Vestas. For products incorporating the product under investigation, in its questionnaire reply GE reported a profit in the range 5 % - 10 % in 2019 and the investigation period

t21.001706.

. In those periods, Vestas made profits in the same range, while foreseeing higher profits in the coming years

Vestas Annual Report 2020 – Continued leadership in a challenging year, company announcement no. 01/2021 from Vestas Wind Systems A/S, https://www.vestas.com/~/media/vestas/investor/investor%20pdf/financial%20reports/2020/q4/210210_01_company_announcement.pdf.

. It is noted that the profitability of users has to be seen in a broader context, as the sales of wind turbines incorporating SWT are made within a wider project

On page 2 of t20.007935, WindEurope writes that users can take on project management; engineering, procurement, construction and installation; operations and maintenance; and post-construction energy aggregation and trading services.

and often coupled with service and maintenance contracts

Wind energy and Economic recovery in Europe, WindEurope, 2020, page 37, third graph. Available in t20.007935. On page 14 of t20.007935 WindEurope stated that operations and maintenance are an increasingly important driver of revenue growth.

for several years. Within Vestas, in 2020 the performance of the service division was very strong, with a 10 percent increase in revenue year-over-year and a record EBIT margin of 28 %

Vestas Annual Report 2020, page 36, https://nozebra.ipapercms.dk/Vestas/investor-relations/annual-report-2020/?page=36.

. As to Nordex and SGRE, between 2017 and 2019 the margin for services was also significantly higher than their EBIT (positive) for wind turbine orders

Wind energy and Economic recovery in Europe, WindEurope, 2020, page 37, graph EBIT margin development by business segments. Available in t20.007935.

. The fact that in 2021

See t21.006735 (SGRE). In t21.006703, page 17, GE stated that it will report a negative profit for the period 2021-2022.

some users experienced lower profits

For some miscellaneous reasons, see for instance WindEurope’s comments following final disclosure available in t21.006721.

cannot change the fact that most users performed very well during a period when the cost of wind energy fell

WindEurope’s comments following final disclosure available in t21.006721 note that the cost of wind energy in Europe has fallen by almost 50% over the last 10 years.

and the existence of certain cyclicality in their earnings, depending on the phase of the projects they deal with. In its comments to the final disclosure, CCCME pointed at a clear expectation of a strong recovery for the post-investigation period, most notably in terms of consumption and production

Page 33 of t21.006724.

.

(440) Since users provided very partial data about the weight of SWT costs within their projects, the Commission was unable to make a meaningful quantification as to what extent measures would increase the overall costs of projects. Estimates point at a low percentage which would depend on the contract scope. EWTA submitted that the increase in SWT purchase cost due to the duty would translate into an annual increase of a project cost by 0,5 % of that amount

Estimate based on (20 % x 50 %) x 20 years. EWTA considered that SWT represented 20 % of a wind turbine, which itself would account for 50 % of the CAPEX of a project. Onshore SWT would typically have an economic life of 20 years.

. Thus, if the imposition of anti-dumping measures would e.g. result in an overall increase by 10 % of SWT prices for users that would pass on most of that price increase to their customers, that would, according to EWTA, result in an annual increase of a project cost by 0,05 %. It should also be noted that neither GE, nor Vestas, nor Nordex, nor SGRE rely exclusively on Chinese imports of SWT.

(441) Following final disclosure, SGRE stated that even if duties may have a relatively small impact on the cost of SWTs expressed in percentages, in absolute amounts the impact would be sizeable given the need for users to optimize production facilities as a result of competitive pressure and the need to contribute to the energy competitiveness of wind energy in terms of the levelised cost of energy, i.e. the average net present cost of electricity generation for a generating plant over its lifetime. The party did not quantify the alleged sizeable impact. The Commission dismissed the claim. In light of the considerations in recitals (438) and (440) above, measures on imports of Chinese SWT are not expected to have a major impact on the profits of co-operating users, their R&D activities or the manufacturing operations of certain parts of wind turbines by users.

(442) As noted by WindEurope, users generate significant added-value in the Union. This is also the case, as component manufacturers, of SWT producers in the Union

Wind energy and Economic recovery in Europe, WindEurope, 2020, figure 10 in page 20. Available in t20.007935.

. The 300000 and/or 50000 jobs mentioned by WindEurope should however not be compared with the Union employment figures in table 8 of this Regulation. In fact, the 300000 employment figure also includes the jobs of component manufacturers, including SWT producers in the Union, and those of on- and offshore service providers. That figure also includes jobs in entities in non-EU countries such as the UK, Turkey, Norway and Switzerland and 140000 indirect jobs of different kinds. The users that reported overall job data failed to quantify the jobs that could be at stake within their entities, should measures be imposed on PRC-origin SWT. Other users mentioned in recital (435) did not provide any job data. In light of the foregoing, the Commission considers that measures will rather support jobs in the wind sector in the Union overall as jobs in this area are forecasted to grow

Global renewables Outlook, Energy transformation, European Union, IRENA, 2020, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_GRO_R04_European_Union.pdf?la=en&hash=D206134796E3C72CF086657266295C45574B58BC (page 7).

.

(443) Regarding users’ comments about supply problems, the investigation showed that users work rather with a limited base of SWT suppliers on the grounds that it takes a long period time to find (alternative) qualified wind tower suppliers. However, the base of Union suppliers is large, like the range of sizes that they can produce. With regard to the latter, as mentioned in recital (42), the Commission found that the Union industry has the production capacity for all required sizes of SWT. The files disclosing injury calculations show that, like Chinese producers, in the Union sampled Union producers were selling sections with a diameter over 5 meters. In addition, following final disclosure, the user SGRE noted in particular the emergence of new, more modern production facilities in the Union capable of producing larger size SWT in 2017, 2018 and 2020.

t21.006735

Companies’ announcements by Union producers refer to dimensions over those sold by sampled Union producers during the investigation period

In https://www.welcon.dk/capabilities/facilities/, the sampled Union producer Welcon reports capabilities for sections of up to 45 meters high and 9 meters diameter (webpage last accessed on 11 October 2021).

. There is indeed significant supply in the Union: production capacity of Union SWT producers is higher than Union consumption and significant SWT capacities are available in the Union (see table 6) serving all required locations and both onshore and offshore markets. CCCME acknowledged an increase in the Union industry’s capacity in the recent years. Although the market circumstances were difficult due to the large presence of low prized Chinese SWT, the Union industry increased capacity over the period considered as per customers’ request

Page 4 of t21.000376.

and committed to further increase its capacity, if market conditions allow. If measures are imposed, imports from China will still be possible (albeit at corrected price levels) and imports from other origins remain available

On page 4 of t21.000509 GE acknowledged to be importing from China, where several suppliers are certified by GE, and from Turkey and South Korea.

.

(444) In view of the foregoing, the Commission dismissed the claims summarised in recital (437).

(445) Following final disclosure, SGRE alleged that Chinese producers only address demand in Denmark, Sweden and Finland, as they lack competitiveness in southern Member States. The Commission noted that the Union is a Single Market. In addition, the investigation showed that the sales of Chinese SWT did not occur only in northern Member States. The Commission found SGRE’s allegation groundless.

(446) Several parties submitted that wind turbine technology and solar panel technology (mostly produced outside of the Union) sometimes compete heads on in terms of price per kWh electricity. That competition increased the pressure to produce SWT for increasingly lower prices. They therefore submitted that even if imposing measures could save or create jobs in the SWT manufacturing industry, that benefit would likely be outweighed by loss of jobs in other parts of the wind turbine industry due to lower demand (orders lost to the solar panel industry due to increased prices of SWT and, consequently, wind turbines).

(447) This claim was rejected. In most cases a site is suitable and developed either exclusively for wind energy generation or exclusively for solar energy generation, because of its location (e.g. offshore, a location capturing a maximum of sunshine or wind, etc.) or demands of the commissioner / population. Moreover, the above claim presupposes that the imposition of measures will result in an overall increase of wind turbine purchase costs, but as explained in recitals (438) to (441), the measures on imports of Chinese SWT are not expected to have a major impact on users, also given the availability of supply sources explained in recital (443).

7.4.

Interest of suppliers

(448) The steel association Eurofer stated that there is a clear Union interest in having measures on SWT to avoid that injury suffered by quarto plate producers, protected by anti-dumping measures, is moved down into the Union steel value chain. The party highlighted the importance of the Union SWT industry for Union steel suppliers and in the context of the renewable energy plans in the Union. According to market intelligence

The piece of market intelligence is available in the case file, document reference t20.008013, Annex 2 – Raising Black Swans To Become Golden Eagles, Laplace Conseil, October 2020.

, renewable energies will require 8 to 10 times more steel per MW produced than fossil energies, while the number of wind turbines installed will rise in the coming years.

(449) CCCME stated that measures would deter Chinese investments in the Union consisting of purchases of (insolvent) local SWT producers, thus negatively affecting European machine suppliers. The Commission disagreed. Machinery producers in the Union are expected to benefit from an improvement in the situation of SWT producers in the Union.

(450) The Commission expects that measures will benefit upstream industries in the Union, namely suppliers of raw materials (e.g. Union steel mills) and relevant machinery producers in the Union.

7.5.

Environmental interests

(451) CCCME deemed that measures would increase production costs for the Union wind energy industry. SGRE and CCCME alleged that measures would have a detrimental impact on the attainment of the Union renewable energy and CO2 reduction targets and thus would not be in the Union interest. GE considered that measures will impede Member States achieving renewable energy targets, that wind projects will no longer be economical if investment thresholds are not met (e.g. a schedule delay/the share of debt financing cannot be obtained) and prevent the development of some projects. Following final disclosure, WindEurope feared under-investment in state-of-the-art manufacturing and research & development and that the European industry would lose the global race for technology leadership in wind energy. The Commission considered that anti-dumping measures on Chinese SWT are not expected to undermine the achievement of the Union renewable energy and CO2 reduction targets nor cancel wind projects. To the contrary, the measures are expected to contribute to the wind energy deployment across the Union by creating a level playing field where all economic operators, including Chinese producers, can compete under fair conditions.

(452) GE stated that measures would lead to higher energy prices for consumers and contradict the Commission’s objective that electricity from renewable sources should be deployed at the lowest possible cost to consumers and taxpayers. The Commission found no evidence that measures on SWT would lead to significant increases in energy prices for consumers in the Union. No party provided data allowing to quantify such an increase, if any. As to taxpayers, the forecasted increases in wind energy installations in the Union

In a low scenario WindEurope foresees the installation of 15 GW every year between 2021 and 2025. The GW forecasted to be installed are higher in the realistic expectations scenario. For details on the scenarios, see Wind energy in Europe – 2020 statistics and the outlook for 2021-2025, WindEurope, February 2021.

are expected to benefit communities hosting projects through taxes and other returns

See chapter 5 (“Benefits to communities) of the publication Wind energy and Economic recovery in Europe, WindEurope, 2020. The chapter and the whole publication are available in t20.007935.

.

(453) Bearing in mind the funding made available for the wind energy sector by the Union and Member States, in GE’s view, measures would be contrary to the Union’s own interests and endanger the sustainability of its wind energy sector. The Commission disagreed. As component manufacturers, SWT producers in the Union generate significant added value within the wind energy industry

Wind energy and Economic recovery in Europe, WindEurope, 2020, figure 10 in page 20. Available in t20.007935.

. Measures are expected to support SWT producers in the Union and bring them growth, job stability, revenues and investments. Users should benefit from a broad base of competitive, reliable and financially sound SWT producers in the Union and from convenient lead-times that Union producers are able to offer thanks to their proximity

7.6.

Other factors

(454) CCCME stated that Union SWT producers aimed at strengthening their near-monopoly position on the market shortly before an expected increase in demand, as to solely profit from these expected developments. The Commission considered that this claim was unsupported and unfounded. The number of SWT producers in the Union on its own contradicts any monopolistic position in the market. Figure 24 in a recent publication by WindEurope

Wind energy and Economic recovery in Europe, WindEurope, 2020, page 41. Available in t20.007935.

shows a high number of facilities manufacturing towers (higher than the number of facilities manufacturing other wind components).

(455) Furthermore, in its questionnaire reply, GE pointed at potential Union workforce reductions for intermediary parties involved in port operations and those involved in transportation and installation of finished wind turbines. Given the forecasted increases in wind energy installations in the Union (see footnote 167), the Commission found the claim unsubstantiated.

7.7.

Conclusion on Union interest

(456) On the basis of the above, the Commission concluded that that there were no compelling reasons that it was not in the Union interest to impose definitive anti-dumping measures on imports of steel wind towers and their sections originating in China.

1. DEFINITIVE ANTI-DUMPING MEASURES

8.1.

Preliminary comment

(457) Section 4 of the notice of initiation indicated that the complainant had provided evidence that the product under investigation was being brought in significant quantities offshore, i.e. to an artificial island, a fixed or floating installation or any other structure in the continental shelf of a Member State or the exclusive economic zone (CS/EEZ) declared by a Member State pursuant to the United Nations Convention on the Law of the Sea (UNCLOS)).

(458) Accordingly, the Commission, pursuant to Article 14a of the basic Regulation, also examined whether measures, if any, should also be imposed in the CS/EEZ. The investigation showed that none of the sampled Chinese exporting producers reported sales to continental shelf or EEZ. The Commission did not obtain any indication of CS/EEZ sales of any significance by the Chinese SWT producers.

(459) Therefore, as there is no evidence that the dumped product was brought in significant quantities to the CS/EEZ, no anti-dumping measures are imposed in the CS/EEZ.

(460) Following final disclosure, the complainant and several Union producers stated that the absence of anti-dumping measures in the CS/EEZ left the door open to certain dumping practices by Chinese producers. The Commission dismissed the comments. As the requirements of Article 14a of the basic Regulation are not met, as explained, the Commission cannot impose anti-dumping measures in the CS/EEZ in the framework of the current investigation.

8.2.

Definitive measures

(461) In view of the conclusions reached with regard to dumping, injury, causation and Union interest, and in accordance with Article 9(4) of the basic Regulation, definitive anti-dumping measures should be imposed in order to prevent further injury being caused to the Union industry by the dumped imports of the product concerned. For the reasons set out in section 6, and in particular recitals (417) to (422), of this Regulation, anti-dumping duties should be set in accordance with the lesser duty rule.

(462) On the basis of the above, the rates at which such duties will be imposed are set as follows:

CompanyDefinitive anti-dumping dutyChengxi Shipyard7,5 %Penglai Dajin7,2 %Suzhou Titan14,4 %Other cooperating companies11,2 %All other companies19,2 %

(463) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to all other companies. They should not be subject to any of the individual anti-dumping duty rates.

(464) A company may request the application of these individual anti-dumping duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission

European Commission, Directorate-General for Trade, Directorate H, Wetstraat 170 Rue de la Loi, 1040 Brussels, Belgium.

. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

(465) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to all other companies.

(466) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(467) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

(468) To ensure a proper enforcement of the anti-dumping duties, the anti-dumping duty for all other companies should apply not only to the non-cooperating exporting producers in this investigation, but to the producers which did not have exports to the Union during the investigation period.

(469) The product under investigation, when joined with other parts so that the whole constitutes of a wind turbine, currently falls under CN code 85023100. In order to ensure that the anti-dumping duties are applied only on the SWT, it is necessary to provide that the value for the SWT must be entered in the declaration for release for free circulation. The value of the SWT should be indicated specifically for 8502310011 and 8502310085.

(470) Statistics of SWT are frequently expressed in number of items (pieces). However, such supplementary unit is not systematically defined for SWT specified in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No 2658/87

Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).

. It is therefore necessary to provide that not only the weight in kg or tonnes but also the number of items for all the imports of the product concerned must be entered in the declaration for release for free circulation.

1. FINAL PROVISIONS

(471) In view of Article 109 of Regulation 2018/1046

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 28 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).

, when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

(472) The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of the basic Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

1. A definitive anti-dumping duty is imposed on imports of certain utility scale wind towers of steel, whether or not tapered, and sections thereof, whether assembled or not, whether or not including an embedded tower foundation section, whether or not joined with nacelles or rotor blades, and that are designed to support the nacelle and rotor blades for use in wind turbines that have electrical power generation capacities – either in onshore or offshore applications – equal to or in excess of 1,00 megawatt and with a minimum height of 50 meters measured from the base of the tower to the bottom of the nacelle (i.e. where the top of the tower and nacelle are joined) when fully assembled, originating in the PRC, currently falling under CN codes ex73082000 (TARIC code 7308200011), ex73089098 (TARIC code 7308909811) and, when imported as part of a wind turbine, currently falling under CN code ex85023100 (TARIC codes 8502310011 and 8502310085).

1. The rates of the definitive anti-dumping duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and produced by the companies listed below, shall be as follows:

CountryCompanyDefinitive anti-dumping duty rateTARIC additional codeChinaChengxi Shipyard Co., Ltd.7,5 %C726Penglai Dajin Offshore Heavy Industry Co., Ltd.7,2 %C727Suzhou Titan New Energy Technology Co., Ltd.14,4 %C728Other cooperating companies, listed in Annex11,2 %See AnnexAll other companies19,2 %C999

1. The application of the individual duty rates specified for the companies mentioned in paragraph 2 shall be conditional upon presentation to the Member States’ customs authorities of a valid commercial invoice, on which shall appear a declaration dated and signed by an official of the entity issuing such invoice, identified by his/her name and function, drafted as follows: I, the undersigned, certify that the (volume) of (product concerned) sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in [country concerned]. I declare that the information provided in this invoice is complete and correct. If no such invoice is presented, the duty applicable to all other companies shall apply.

1. Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 2

Where a declaration for release for free circulation is presented in respect of wind turbines referred to in Article 1(1), originating in the PRC, the net, free-at-Union-frontier price, before duty, of the wind towers referred to in Article 1(1) shall be entered in the relevant field of that declaration.

The anti-dumping duties referred in Article 1(2) shall apply only to the net, free-at-Union-frontier price, before duty, of the wind towers referred to in Article 1(1).

A valid commercial invoice shall be presented to the Member States' customs authorities. It shall contain information sufficiently detailed to allow the Member States' customs authorities to assess the accuracy of the declared net, free-at-Union-frontier price, before duty, of the wind towers referred to in Article 1(1).

Member States shall, on a monthly basis, inform the Commission of the net, free-at-Union-frontier price, before duty, declared for the wind towers referred to in Article 1(1) imported as part of a wind turbine referred to in Article 1(1).

Article 3

Where a declaration for release for free circulation is presented in respect of the products referred to in Article 1(1), irrespective of their origin, the number of items of the products imported shall be entered in the relevant field of that declaration, provided this indication is compatible with Annex I to Council Regulation (EEC) No 2658/87

Annex I Combined Nomenclature to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).

.

Member States shall, on a monthly basis, inform the Commission of the number of items imported under TARIC codes 7308200011, 7308909811, 8502310011 and 8502310085.