US Imposes Sanctions On Chinese Solar Firms For Uighur Human Rights Abuses, Bans Import Of Solar Panel Material From Hoshine Silicon Industry Co

The United States on Wednesday (Jun 23) imposed a ban on U.S. imports of a key solar panel material from Chinese-based Hoshine Silicon Industry Co, Reuters reported

U.S also restricted exports to five Chinese companies that it said were implicated in Chinese human rights violations.

The companies are major manufacturers of monocrystalline silicon and polysilicon that are used in solar panel production.

The companies added to the Commerce Department’s Entity List include Xinjiang Daqo New Energy, a unit of Daqo New Energy Corp; Xinjiang East Hope Nonferrous Metals, a subsidiary of Shanghai-based manufacturing giant East Hope Group; Xinjiang GCL New Energy Material and Xinjiang Production and Construction Corps (XPCC).

Polycrystalline silicon, also called polysilicon or poly-Si, is a high purity, polycrystalline form of silicon, is used as a raw material by the solar photovoltaic and electronics industry.

45% of polysilicon used in solar panels comes from Xinjiang province in China. The region houses massive factories producing solar polysilicon including Xinte Energy's plant with an annual manufacturing capacity of 72,000 tonnes, Daqo New Energy Corp owns a 70,000-tonne plant. CGL-Poly Energy Holding and East Hope Group together produce around 88,000 tonnes there annually.

Another 35 percent of the supply comes from other regions in China, while the remaining 20 percent came from outside China. SEIA has said it believes that's enough to supply the U.S., without polysilicon from Xinjiang.

Democratic members of the House Ways and Means Committee recently urged US Customs and Border Protection to block the importation of solar panels made with polysilicon from Xinjiang on the grounds that the imports were produced with forced labor.

The sanctions is likely to affect the production of panels containing polysilicon from China and will have a huge consequence for the development of global solar energy projects.

U.S. Ban On Cotton And Tomato Imports from Xinjiang Citing Use Of Uyghur Prison And Forced Labor By China

The import restrictions on polysilicon similar to ones the Trump administration placed on cotton, tomatoes and other products exported from Xinjiang.

In January this year, the U.S. Customs and Border Patrol (CBP) announced a ban on imports of cotton and tomatoes from the Xinjiang region in China over Beijing’s use of forced labour.

The ban came in to effect from Jan 13 at all U.S. ports of entry

The agency had said that the region-wide ban was "based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor". The agency said that it has found examples of debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.

According to U.S State Department estimates that more than 1 million Uyghurs, as well as members of other Muslim minority groups, have been detained in a sprawling network of internment camps in Xinjiang.

Around 20 percent of the world’s cotton is picked in Xinjiang, and the region is also a major exporter of tomatoes, which are used to make ketchup for the U.S. market. The U.S. imported $9 billion in cotton products and $10 million in tomatoes from China in 2019

in July 2020, the U.S. Government had issued an advisory cautioning businesses about the reputational, financial, and legal risks of forced labor in Xinjiang, where the Chinese government continues to execute a campaign of repression targeting the Uyghur people and other ethnic and religious minority groups.

Impact On Global Solar Industry

For the solar industry, which is coming off its latest record year of installations and is expected to see capacity quadruple this decade, the potential disruption to supplies could hurt the supply chain that is already slowing projects and raising costs.

Since Xinjiang produces 45% of the world’s solar-grade polysilicon, sanctions against Xinjiang companies producing polysilicon is bound to increase in the price of polysilicon and impact the future development of global solar energy projects.