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) -- Nothing and no one has been able to slow down the growing profile of China in the green energy business, but the United Steelworkers union thinks it's time to put up a greater fight on behalf of the U.S., which is lagging China in renewable energy manufacturing. The powerful steel union will file a formal complaint with the U.S. government arguing that China's subsidies for green energy companies violate U.S. trade law.

The trade union's legal gambit, released to the press on Thursday morning, is the latest action in a battle that has been brewing for years, as China has ascended to a leading position in green energy manufacturing. On Wednesday, an annual report from Ernst & Young ranking the nations of the world in terms of attractiveness for green energy projects showed China eclipsing the U.S. for the first time in the No. 1 spot.

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In a related show of trade muscle from the steel union, earlier this year it extracted a concession from China's

A-Power Energy Generation Systems

( APWR) and its partners on a massive Texas wind farm project to buy 50,000 tons of U.S.-made steel to supply the wind farm.

The A-Power project in Texas had been under fire directly from the Senate -- and, in particular, Senator Charles Schumer (D-NY), who made the Texas wind farm his personally whipping boy for rhetorical attacks aimed at leveling the playing field between China and the U.S. in green energy manufacturing.

The new petition to the Obama administration through the U.S. Trade Representative's office is a much broader legal salvo from the steel union.

The United Steelworkers union said in a statement that its argument "reveals five major areas of protectionist and predatory practices utilized by the Chinese to develop their green sector at the expense of production and job creation here in the U.S."

Analysts who cover the green energy sector have long said China's ascendance above the U.S. in terms of green manufacturing is a done deal, and that the U.S. simply can't compete on the costs of manufacturing in Asia. Analysts have noted with some frustration that the Chinese government has gone so far as to provide huge subsidies for water and electric rates to the manufacturing companies, which creates an even greater cost imbalance between China and the U.S.

A-Power and its partners cut a deal with Senate Majority Leader Harry Reid (D-Nev.) to set up a plant in Reid's home state to build parts for the Texas wind project.

The case of wind energy is tricky in terms of any political gains made by U.S. manufacturing, though, because given the huge size of wind turbines, it often makes the most sense to manufacture parts where the projects are being built. Analysts have said that A-Power's concessions may amount to no more than an economic formula that supports building a portion of the equipment for a U.S. wind farm in the U.S.

That's not a winning economic formula in the case of manufacturing a solar module or cell. The list of failed green energy manufacturing projects in the U.S. includes the shuttering by BP earlier this year of its solar plant and the laying off of 320 employees. Consider the case of

Evergreen Solar

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( ESLR), which, bolstered by incentives from the state of Massachusetts, set up a state-of-the-art solar plant in Devens, Mass. Now, Evergreen Solar's only chance for survival is its ongoing transition to manufacturing in China, where it hopes to bring down costs enough to make its products competitive.

Energy Conversion Devices

( ENER), another U.S. solar company struggling with the cost equation, recently laid off more than 100 employees in Michigan and moved the jobs to a plant in Mexico.

On another less-than-promising note, the U.S. wind market is, at least at present, all but dead. Notwithstanding the A-Power Texas wind farm, the latest data on the U.S. wind market shows a level of projects this year that is not just lower than last year, but at a distressingly low level.

Many U.S. green energy companies have set up, or are setting up, manufacturing operations in China, too, and are being awarded contracts from the Chinese government for green energy projects.

There's a case to be made against China. A report in

The New York Times

on Wednesday about claims of unfair subsidies in China noted that Chinese practices may violate World Trade Organization rules banning virtually all subsidies to exporters, and could be successfully challenged. However, whether such a challenge from the steel industry is in the interest of the U.S. green energy companies is not an easy question to answer.



report noted that if the country with the subsidies fails to remove them, other countries can retaliate by imposing steep tariffs on imports from that country, but in the clean energy business, fear of retaliation from China against multi-nationals has made such attacks risky, at best.

First Solar

(FSLR) - Get First Solar, Inc. Report

is a good example, with its huge 2 gigawatt solar project in the desert of Mongolia slated to be the largest solar projects in the world.

At the same time, leading Chinese solar companies, from

Suntech Power



Yingli Green Energy

(FSLR) - Get First Solar, Inc. Report

, are considering or in the process of setting up manufacturing plants in the U.S.

With 14-year tax holidays in countries like Malaysia for corporations, it's not surprise that solar companies like


( SPWRA) have major manufacturing operations located there. So the story is not just about China versus the U.S. in a race for a green manufacturing hub, but Asia versus the U.S. -- and that's an old story about low-cost manufacturing.

China may be granting its companies big concessions, but the case may not be as cut-and-dry as the steel union would like it to be.

For all of its claims of unfair trade practices, the U.S. green manufacturing industry has lagged as a result of the U.S. government's failure to present a comprehensive energy plan for the future, and lack of financing mechanisms to encourage more manufacturing. Ernst & Young cited in its annual ranking of renewable energy locales the looming expiration at the end of the year of the U.S. Treasury grant for renewable energy projects -- created during the federal economic stimulus -- as another sign of the U.S. weakness in attracting green energy investment dollars.

At the same time, the U.S. government, through the Department of Energy, and state-run subsidy and tax programs include a multitude of incentives to set up green energy plants in the U.S., so it's not so easy to make a black and white case showing China alone fostering unfair trade incentives.

The United Steelworkers are bringing their petition under Section 301 of U.S. trade law, which authorizes the government to investigate foreign barriers to exports, and the Obama administration has a 45-day review period during which to decide whether to move ahead.

Though the argument can be that it might be better if the Obama administration spent the next 45 days figuring out a way to pass green energy legislation that has stalled all year in the Senate.

--Written by Eric Rosenbaum in New York.

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