European tower manufacturers are being pressured by unfair competition from China. While the EU introduced a special tariff on Chinese steel in 2015, as it was heavily subsidized by the state, the EU has not imposed the same tariff on wind turbine towers.
This means that the raw materials for Chinese tower manufacturers are significantly lower than for European ones, which affects competitiveness, according to the Danish tower manufacturer Welcon in Give, among others.
- It is no use for the EU to only impose a tariff on the raw materials, but not the towers. The steel plates make up a good 40 percent of wind turbine towers. If it is illegal state aid for steel, it must also be illegal state aid when it comes to the towers, says Jens Pedersen, owner and founder of the Danish tower company Welcon.
The result is quite simple: Competition becomes unfair when the Chinese tower manufacturers have access to state-subsidized steel.
- We could easily compete, as we had access to the same raw materials at the same prices. We have higher costs for employees and environmental measures, but this is offset by more expensive travel costs for the Chinese companies, says Jens Pedersen.
The consequence is just as simple, if you ask the Welcon director.
- There are many companies that have broken their necks over this. China is simply killing European tower production, says Jens Pedersen.
The EU must step in
Welcon has – despite the unfair competition – done well, but as Jens Pedersen describes it, the company is not earning what it should.
- We can't help but accept orders. So we keep lowering prices. But it is also necessary that we make money so that we can invest in production for the future, says the director.
The solution is straightforward, namely that the EU steps in to correct the unfair competition. One cannot expect wind turbine manufacturers to do "the right thing" and buy towers that are produced under fair competition conditions, as the large manufacturers themselves are in fierce competition with each other.
Jens Pedersen also emphasizes that it is important to ensure fair competition conditions all the way through the supply chains, as it will ultimately affect the green transition if the European tower manufacturers have to succumb to the competition.
Minister hesitates
TEKNIQ Employers has approached Minister of Industry and Trade Simon Kollerup (S) about the challenges, but the minister has been hesitant to put pressure on the EU or to clearly state the government's position.
In his response to TEKNIQ Employers, the Minister of Industry and Trade emphasizes that there are opposing interests among the Danish subcontractors to the wind turbine industry and the wind turbine manufacturers, respectively. An argument that surprises Troels Blicher Danielsen, CEO of TEKNIQ Employers.
- If Denmark continues to be a leader in the production of wind turbines, it is necessary that we protect the professional competencies that are tied to, for example, the education of skilled workers. We know that the subcontractors pull a heavy load here, and this requires a coherent sector that supports each other. We therefore do not understand that there should be opposing interests in the industry, he says.
- We therefore call for a greater willingness from the Danish government to clearly signal to both China and especially the EU that it is ready to go to great lengths to defend Danish competencies and not least jobs, emphasizes Troels Blicher Danielsen.
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