Biden to deter forced labor by banning solar panel materials in China


WASHINGTON — The Biden administration plans to expand its campaign against the use of forced labor in China’s Xinjiang region by imposing sanctions on some companies that produce raw materials used to make solar panels, according to people familiar with the plans .

According to plans, which will be announced Thursday, U.S. Customs and Border Protection would ban imports of metallurgical-grade silicon mined by Hoshine Silicon Industry (Shanshan) Co., as well as products made from it, unless that the company cannot prove that the material is not produced with forced labor, these people said.

The Commerce Department would add Hoshine and four others involved in silicon production to its list of entities, forcing US companies to obtain a license to sell them products or technologies; such licenses are rarely granted. The Ministry of Labor would add polysilicon made in China to its list of products made by forced labor.

Xinjiang Daqo New Energy is one of the companies that the Commerce Department is considering adding to its list of entities.


Photo:

Colum Murphy / Bloomberg News

The actions are likely to be largely symbolic. They would reinforce the administration’s concern for human rights in Xinjiang, where the United States claims China is engaged in genocide against the region’s Uyghur population. The United States has already banned imports of cotton and tomato products from Xinjiang, where Uyghurs and members of other predominantly Muslim ethnic groups have been arrested in detention centers.

The new actions are unlikely to hamper China’s solar industry or make it difficult for U.S. companies to build or sell solar panels, although they will need to ensure that the materials they import comply with the EU. order.

About 85% of the panels sold in the United States are imported, many of which are made by Chinese companies. Many other companies are making metallurgical silicon in China, the United States and elsewhere in Asia, so the supply should not be seriously disrupted, people familiar with the plans said.

The Chinese Embassy did not immediately respond to a request for comment. China has denied forced labor and human rights violations in Xinjiang, saying it offers vocational training and civic education to provide skills and raise living standards.

Bloomberg previously reported on the Biden administration’s plans for solar sanctions.

Targeting the Chinese solar industry is difficult for an administration that also wants to make the US electricity grid carbon-free by 2035.

Solar power accounts for more than half of all renewable energy projects in the United States that are expected to go live soon, according to a recent report by the American Clean Power Association, an industry group.

The vast majority of solar panels sold around the world are based on technology dominated by China. The process begins with what is called metallurgical grade silicon, which is often mined and made into polysilicon in Xinjiang. Through several additional steps, these raw materials are transformed into solar cells and assembled into solar panels. China is the leader in all parts of the supply chain, especially in the production of silicon wafers which are turned into solar cells.

The US solar industry feared the administration would block imports. The Solar Energy Industries Association has provided a methodology for members to trace the origin of the goods they produce or assemble. But it is far from clear whether Beijing will allow external auditors to play a significant role in controlling supply chains.

Some non-Chinese companies are complaining that a crackdown could make them even more dependent on Chinese suppliers, who would have to provide documentation that their goods are manufactured outside Xinjiang.

The Commerce Department plans to add four companies and one organization to its list of entities. These are the polysilicon producers Xinjiang GCL New Energy Material Technology Co. and Xinjiang Daqo New Energy Co. and the metallurgical silicon producers Xinjiang East Hope Nonferrous Metals Co. and Hoshine. The fifth is Xinjiang Production & Construction, a state-owned paramilitary organization that operates a large number of farms and state-owned enterprises, including industrial parks where solar silicon processing takes place. It was previously placed on the entity list.

According to a Federal Register entry Wednesday night, all five “have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, forced labor and surveillance. high-tech ”in Xinjiang.

The impact, however, is unclear. The companies are engaged in mining, processing and construction, areas where China is a leader and does not appear to depend on American technology.

The Biden administration has leaned on the Xinjiang campaign launched by the Trump administration and is seeking to recruit allies to pressure China to change its practices.

At the recent meeting of the Group of Seven Wealthy Democracies, the group issued a statement opposing forced labor, although it did not identify China by name, reflecting the reluctance of Europe and Japan. to confront China on the issue.

Write to Bob Davis at [email protected]

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