Department of Commerce

Last week, the US Environmental Protection Agency (EPA) published a request for comment asking for “input on regulations that may be appropriate for repeal, replacement, or modification.” EPA’s request is part of a federal government initiative under Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” which established a federal policy “to alleviate unnecessary regulatory burdens” on the American people. The Executive Order directs federal agencies to establish a Regulatory Reform Task Force that will evaluate existing regulations and make recommendations on repeal, replacement and modification.

Pursuant to the Executive Order, the Task Force will identify regulations that:

  1. Eliminate jobs, or inhibit job creation;
  2. are outdated, unnecessary, or ineffective;
  3. impose costs that exceed benefits;
  4. create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;
  5. are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriates Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard of reproducibility; or
  6. derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.

EPA’s request comes on the heels of the Department of Commerce’s request for comments from manufacturers asking what regulations the government could repeal to benefit domestic manufacturing. Commerce received approximately 170 responsive comments, nearly half of which targeted various environmental regulations for amendment or repeal.

EPA offices are conducting various outreach programs designed to engage the public. These include public teleconferences, public meetings and contact with key stakeholders. Outreach efforts will begin on April 24 with a public meeting via teleconference held by the Office of Air and Radiation. Other divisions of EPA, such as the Office of Small and Disadvantaged Business Utilization, Office of Water, Office of Chemical Safety and Pollution Prevention, and Office of Land and Emergency Management will hold scheduled outreach sessions through May 9.  Comments are due to EPA by May 15.

by David J. Levine and Pamela D. Walther

The flurry of international trade disputes in the renewable energy field, particularly the solar sector, is complicating the business landscape for the renewable energy industry.  In their BloombergBNA analysis piece, McDermott international trade lawyers David Levine and Pamela Walther provide a detailed account of renewable energy trade actions in the domestic and international arenas.  As the long-term implications of these disputes raise serious strategic issues for providers, consumers and governments, those involved are well-advised to monitor developments and take an active role in proceedings to protect their interests.

To read the full article, click here.

by Raymond Paretzky and William Friedman

The U.S. Department of Commerce (Commerce) published its final affirmative antidumping (AD) and countervailing duty (CVD) determinations on October 17, 2012, imposing new duties on Chinese solar panel producers and exporters.  Commerce determined that Chinese producers/exporters sold solar photovoltaic cells in the United States at dumping margins ranging from 18.32 to 249.96 percent, and that Chinese producers/exporters have received countervailable subsidies of 14.78 to 15.97 percent. 

Dumping occurs when a foreign company sells a product into the United States at less than fair value prices.  Countervailable subsidization occurs when a governmental authority directly or indirectly conveys benefits that support production by specific companies or sectors, or are contingent upon export performance or the use of domestic goods over imported goods.

As a result of its determinations, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits or bonds equal to these margins on imports.  The cash deposit rates, however, will be reduced by 10.54 percent, the export subsidy rate.  Additionally, Commerce found that “critical circumstances” exist in the CVD investigation for all companies and in the AD investigation for all companies except one, Wuxi Suntech.  As a result, provisional duty deposits, which are normally collected as of the date of publication of Commerce’s preliminary determinations, will be collected 90 days prior to that date (except in the case of AD duty deposits for Wuxi Suntech).

For the early duty deposit collection to be maintained and the AD/CVD duties to stand, the International Trade Commission (ITC) must make an affirmative final determination that dumped and subsidized imports of solar cells from China “materially injure, or threaten material injury to,” the domestic solar panel industry.  If the ITC makes a negative final injury determination, the investigations will be terminated and the duties will not be imposed.  The ITC has tentatively scheduled its final determination vote for November 7, 2012.

On August 2, 2012, the U.S. Department of Commerce (DOC) published in the Federal Register its preliminary determinations in the antidumping (AD) investigations of Wind Towers from China and Vietnam.  DOC calculated preliminary AD margins for the Chinese mandatory and cooperative respondents ranging from 20.85 to 30.93 percent, while non-participating producers will face a margin of 72.69 percent.  Pursuant to its non-market economy (NME) AD calculation methodology, in which DOC estimates the costs of producing subject merchandise in China based on costs in a comparable "surrogate" market economy, DOC preliminarily selected the country recommended by the foreign producers—Ukraine—as the surrogate, finding that it provides the most specific information to value steel plate, the most significant input in the manufacture of wind towers.  For Vietnamese producers, DOC calculated preliminary AD margins ranging from 52.67 to 59.91 percent; India was selected as the surrogate country.

Importers of wind towers from China and Vietnam will be required to post cash deposits at the applicable rate calculated by DOC starting August 2, 2012.  DOC has postponed the deadline for the final determination in both cases, as well as in the companion countervailing duty case affecting imports from China only, for the maximum allowable statutory amount, i.e., until 135 days after publication of the preliminary determination notices, or December 17, 2012.

Meanwhile, legislative incentives may also have a great impact on the industry.  The wind industry has urged U.S. Congress to pass an extension of the production tax credit (PTC), which will expire at the end of this year.  There have been several proposals in Congress to extend the PTC to wind facilities that are placed in service after December 31, 2012.  Even though in years past the PTC and other provisions needing extensions to preserve the current tax treatment have often been extended in the waning moments of the Congress, it is more difficult than ever to predict whether such extensions will become law because of the impending election, the national debt debate and the current political environment.

For questions on the trade actions, contact David Levine or Raymond Paretzky.

For questions on the PTC, contact Martha Pugh.

by Raymond Paretzky and David J. Levine

The U.S. International Trade Commission (ITC) is now beginning its final phase “injury investigation,” which will result in a determination in November as to whether U.S. producers are harmed by imports of allegedly dumped and/or subsidized imports of Crystalline Silicon Photovoltaic Cells and Modules from China.

The parallel dumping and subsidy actions began with the filing of a petition by Solar World Industries America Inc., the U.S. subsidiary of a German parent company, in October 2011. In December, the ITC issued a unanimous affirmative preliminary injury determination, rejecting arguments by companies opposed to the action that price declines in the industry resulted not from Chinese imports but rather from plummeting silicon prices, reduced U.S. government incentives for the housing industry to use solar cells/panels, and limited U.S. demand. The ITC will revisit these arguments in its more expansive final phase investigation, in which importers, U.S. producers, purchasers and Chinese producers will be required to answer ITC questionnaires. All parties with interests at stake are well advised to make their positions and relevant facts known to the ITC.

If the ITC finds that the U.S. industry making these products is in fact injured (or threatened with injury) by the imports, the United States will impose tariffs on imports of these products. The amount of the tariffs will be determined by the U.S. Department of Commerce (DOC) in separate proceedings. DOC preliminarily found that subsidization was occurring in the range of 2.90 to 4.73 percent and dumping in the range of 31.14 to 249.96 percent, but DOC could change these rates in its final investigations, which are currently ongoing.

Key dates in the ITC investigation’s final phase are:

 Questionnaire Responses Due  Aug. 13
 Confidential Staff Report Released  Sept. 13
 Requests to Appear at Hearing Due  Sept. 19
 Prehearing Briefs Due  Sept. 20
 Hearing  Oct. 3
 Posthearing Briefs Due  Oct. 11
 Final Comments on New Info. Due  Nov. 1
 ITC Vote (Proposed)  Nov. 7

 

by David Levine, Raymond Paretzky and Melissa Dorn

The United States Department of Commerce (DOC) released its preliminary determination in the countervailing duty investigation on imports of silicon photovoltaic (PV) cells from China last week.  The DOC preliminarily found subsidy rates for Chinese producers and exporters of PV cells ranging between 2.9 to 4.73 percent—rates that were lower than some industry members reportedly expected, and lower than the rates alleged by the Solar World Industries America Inc., the U.S. producer that petitioned for this countervailing duty investigation and the companion antidumping investigation.  The DOC affirmed Solar World’s allegation of “critical circumstances,” resulting in retroactive application of the countervailing duty deposit requirement on imports of Chinese PV cells beginning in December 2011.

The DOC also clarified that the scope of the ongoing antidumping/countervailing duty investigations covers PV cells and modules produced in China as well as modules produced elsewhere with Chinese PV cells, but does not include modules produced in China from PV cells produced elsewhere.

Countervailable subsidies are receipts of financial assistance by producers and/or exporters from their local or national government that benefit the production or exportation of goods where such benefits are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods. 

U.S. imports of Chinese solar panels in 2011 were valued at over $2.5 billion – a significant and growing share of the total U.S. market.  The rapid growth of Chinese imports in fact supporting the “critical circumstances” finding noted above as well as the earlier preliminary determination by the U.S. International Trade Commission (ITC) that the U.S. industry is being injured by imports of PV cells from China. 

Interested members of the solar industry will continue to watch these proceedings closely.  The DOC is expected to announce its preliminary determination in the companion antidumping investigation in May.  The final countervailing duty determination is due to be issued in June, and the ITC will issue its final injury determination in July, though these dates could be postponed.  Interested parties also are closely monitoring the U.S. and global market implications of these investigations, including in the large solar market in Europe, where reports indicate similar trade relief actions against Chinese exports might be under consideration.