Green energy trade disputes mount

Green energy is such an internationally competitive area, trade frictions are popping up in various green energy industries.

A worker walks past solar panels in a 20 megawatt solar farm in Shilin near Kunming, in southwest China's Yunnan province in this 2010 file photo. The US-China trade spat over subsidized solar panels is just one of many green energy trade disputes that are cropping us as nations try to develop green energy industries.

Leaders of the 21 Asia-Pacific Economic Cooperation economies meet this weekend in Honolulu to focus on ways to spur use of environmentally-friendly technology and reduce barriers to trade in the region.

In the meantime, a number of trade spats are piling up, both in and outside of APEC, as countries reach for the biggest share they can get of the green energy market.

1. Solar Energy, United States versus China

The U.S. Commerce Department is expected to formally launch an investigation this week into charges that Chinese companies are selling solar cells and modules in the United States at unfairly low prices and receive generous Chinese government subsidies. The case was brought by the U.S. arm of German company SolarWorld and other members of the Coalition for American Solar Manufacturing, which have asked for anti-dumping and countervailing duties of more than 100 percent. China has slammed the action as a protectionist move and urged the Obama administration not to apply duties. A preliminary decision on duty rates is expected next year. Meanwhile, solar panel makers in Germany are trying to gather support for the European Union to launch a similar investigation against China.

2. Oils sands, Canada versus the European Union

An European Union proposal that would discourage use of oil from tar sands by classifying it as dirtier than other types of oil has angered Ottawa and could result in a case at the World Trade Organization.Canada argues that oil sands crude is no dirtier than oil from Russia and Nigeria, which would be treated more favorably under the EU's green fuel law.

3. Keystone pipeline, Canada and US

Oils sand are also at the center of an environmental decision now facing the Obama administration. TransCanada Corp. hopes to build the proposed $7 billion Keystone XL pipeline to bring crude from oil sands in Alberta to Texas refineries. Although technically not a trade spat, its outcome would have a profound effect of U.S.-Canada relations in the energy sector. Thousands of protesters circled White House grounds on Sunday to urge Obama to reject the project on environmental grounds. In addition to concerns about higher carbon emissions, the pipeline's expected route goes over a fragile aquifer.

4. Local green energy subsidies, Canada versus EU and Japan

Both Brussels and Tokyo have challenged a program in the Canadian province of Ontario that guarantees above-market prices for renewable energy as long as it is generated with a certain amount of Canadian-made equipment or services. The domestic content requirement for solar power is 40 percent and wind power 25 percent. The EU and Japan say it is illegal under World Trade Organization under WTO rules to condition access to a subsidy to the use of domestic products.

5. Rare earth minerals, China versus US, Japan, EU

Beijing's tight quotas on export of rare earth minerals used in wind turbines, electric car batteries and other high-technology and clean energy products has rattled companies in the United States, European Union and Japan. China produces about 97 percent of the world's supplies of the 17 minerals and cited resource depletion and environmental degradation as reasons for its crackdown. However, its trading partner argue the curbs violate World Trade Organization rules.

6. Forced technology transfer, US versus China

U.S. trade officials have expressed alarm over reports China has tried to force U.S. automakers to transfer valuable electric vehicle technology to China to qualify for generous government subsidies. General Motors Co. has said its Chevy Volt will go on sale in China later this year, but without subsidies that could cut the price for consumers by 30 percent. However, GM and its Chinese partner SAIC Motor Corp recently signed an agreement to develop and build cars that could qualify. China hopes to have 1 million green vehicles on the road by 2020, compared to just a few thousand now.

7. Biofuels, EU versus US

European bioethanol producers have asked EU authorities to investigate whether their U.S. rivals are receiving illegal subsidies and dumping fuel on the EU market at unfairly low prices. At the heart of the case is the so-called Volumetric Ethanol Excise Tax Credit, which provides a 45-cent per gallon tax credit for U.S. producers. It is currently due to expire at the end of 2011, but EU producers fear the longstanding credit will be renewed again. EU producers also have been urging policy makers to reclassify bioethanol blends, a move that could raise tariffs on imports from the United States, Brazil and other producers by about 40 percent. The EU already has duties on biodiesel imports from the United States and Canada.

8. Carbon emissions permits, EU versus 26 nations

A European Union plan aimed at curbing carbon emissions by requiring airlines to buy pollution permits to offset greenhouse gas emissions from their planes has run into strong opposition from the United States, China and about two dozen other countries. Last week, the United Nation's International Civil Aviation Organization urged the EU not to include non-EU carriers in the plan, which is due to take effect on Jan 1. (Reporting by Doug Palmer in Honolulu)

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