U.S. Faces Tough Choices on Clean Energy --- Biden adds barriers to Chinese imports, but this slows down the green transition

 

"The Biden administration is hoisting barriers to Chinese clean-energy imports to protect domestic industries as the presidential election nears. But the trade restrictions also threaten another of Biden's priorities: building out renewable-energy generation.

This month, the administration allowed a set of duties aimed at China-based manufacturers of solar panels to take effect -- after having put the measures on hold two years ago. The International Trade Commission, a federal agency that analyzes trade issues, also gave its initial go-ahead to an antidumping petition that some U.S. solar manufacturers have backed. In the next few weeks, the administration is expected to close a tariff loophole that let companies bring in many solar panels duty-free.

Those moves, along with others that raise tariffs on green products such as batteries and electric vehicles, represent some of the strongest attempts yet to protect nascent industries from a glut of green Chinese products and wean the U.S. off clean-energy supply chains that Beijing dominates.

But the U.S. still relies on imported solar components, and some industry executives say the moves -- particularly the antidumping petition -- are causing developers to pause panel acquisitions, push back work time lines and prepare for higher costs. That in turn threatens the fast rollout of renewable energy needed for the U.S. to hit ambitious clean-energy and climate goals, they say.

The Biden administration is "trying to strike a balance there between [its clean-energy goals and support of domestic manufacturing], and they're at odds with each other in a lot of ways," said Andrew Gier, an energy-practice director at Capstone, a policy consulting firm based in Washington.

The administration's support of domestic manufacturing has helped its green agenda, not hurt it, said Ali Zaidi, Biden's national climate adviser. That is because the government is ensuring that supplies of batteries and renewable components are plentiful and don't depend on one country such as China, he said.

"There has not been a trade-off," Zaidi said. Instead, he added, the government has spurred investments that "build out not just deployment of solar but manufacturing of solar here in the United States."

The debate around the clean-energy trade measures underscores the fine line the Biden administration must walk between promoting its green agenda and sheltering U.S. manufacturing. Two years after incentives in the Inflation Reduction Act set off a race to build clean-energy supply chains in the U.S., companies have announced $114 billion in investments in products such as batteries, solar panels and electric vehicles, according to environmental business group E2.

But China still hosts 80% of solar-manufacturing capacity and 75% of battery production, the International Energy Agency estimates, meaning the U.S. will depend on China's manufacturers for clean-energy supplies for the foreseeable future.

"Given the relentless efforts of the Chinese government and Chinese-headquartered companies to dominate solar manufacturing, we have to be equally relentless to ensure that trade enforcement works," said Timothy Brightbill, a partner at Wiley Rein and chief counsel on the antidumping petition.

In solar, that reliance has been heightened by a halving of panel prices during the past year as Chinese manufacturers and their operations in Malaysia, Thailand, Vietnam and Cambodia pumped out supply, Brightbill said. Imports soared and inventory piled up in the U.S., he added.

Solar-panel maker Qcells, a unit of South Korean conglomerate Hanwha, is spending billions of dollars to expand in Georgia. Yet Hal Connolly, vice president of public policy and government relations at Qcells, said last month that customers are opting to buy imported panels that are priced below what it would cost to make them in the U.S. The company and its peers are "losing millions of dollars per month," he said at an International Trade Commission hearing on the antidumping petition.

Qcells is one of the companies backing the petition, which claims that manufacturers in the four Southeast Asian countries are benefiting from unfair subsidies and dumping solar panels and cells, a critical part.

Not everyone agrees. Lured by government incentives, Canadian Solar completed a $270 million panel-making factory in Texas last year. The company, which is headquartered near Toronto and makes most of its products in China, is also setting up an $800 million plant in Indiana to produce solar cells.

The Indiana plant is expected to be ready in 18 months. Until then, Canadian Solar plans to import panel components from its factory in Thailand, which could be affected by new tariffs. "Carrots work, sticks don't" when trying to encourage the growth of renewable-energy industries, said Thomas Koerner, the company's head of global sales.

The U.S. isn't making solar cells yet, and won't be making enough to satisfy domestic demand for the next decade at least, according to green-energy lobby American Clean Power." [1]

It is a market. Biden put in a lot of money from taxes into domestic green manufacturing that does not have scale and quality to compete in the market. Now he is trying to protect that money from ruin in competition, introducing custom duties. This stops green transformation, making America an outlier in the world. Solar and wind energy are becoming cheaper than fossil fuel energy. When everybody rushes to take their niche in the new economy, America is standing quietly. This will not end well. If you are not developing your economy you are dead in the water economically, socially and militarily.

1. U.S. News: U.S. Faces Tough Choices on Clean Energy --- Biden adds barriers to Chinese imports, but this slows down the green transition. Dvorak, Phred.  Wall Street Journal, Eastern edition; New York, N.Y.. 18 June 2024: A.2.