The administration of US President Joe Biden on Wednesday ordered a ban on US imports of a key solar panel material from Chinese-based Hoshine Silicon Industry Co (合盛矽業有限公司) over forced labor allegations, two sources briefed on the matter said.
The US Department of Commerce separately restricted exports to Hoshine, three other Chinese companies and the paramilitary Xinjiang Production and Construction Corps (XPCC, 新疆生產建設兵團), saying that they were involved with the forced labor of Uighurs and other Muslim minority groups in Xinjiang.
The three other companies added to the US economic blacklist include Xinjiang Daqo New Energy Co (新疆大全新能源), a unit of Daqo New Energy Corp (大全新能源); Xinjiang East Hope Nonferrous Metals Co (新疆東方希望有色金屬), a subsidiary of Shanghai-based manufacturing giant East Hope Group (新疆東方希望); and Xinjiang GCL New Energy Material Co (新疆協鑫新能源材料科技), part of GCL New Energy Holdings Ltd (協鑫新能源控股).
Photo: Reuters
The department said that the companies and XPCC “have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in” Xinjiang.
At least some of the companies listed by the department are major manufacturers of monocrystalline silicon and polysilicon that are used in solar panel production.
The immediate effect of the restrictions would be limited as the companies do not have “vast contracts” with US based wafer companies, Dennis Ip (葉捷賢), a power sector analyst at Daiwa Capital Markets Hong Kong said in a note to clients.
“However, we see possibility for the ban to gradually extend to include restrictions on all solar modules which contain Xinjiang-produced polysilicon,” he said.
Chinese module producers could still use polysilicon from Inner Mongolia and Yunnan Province for their US-bound module shipments, he added.
About 45 percent of all polysilicon used in solar module production is produced in Xinjiang, with 35 percent produced in other parts of China. The remainder comes from outside China.
The global solar energy supply chain has been squeezed by record-high costs for polysilicon, labor and freight.
Asked for comment, the Chinese embassy in Washington referred to remarks on Tuesday by Chinese Ministry of Foreign Affairs spokesman Zhao Lijian (趙立堅), who dismissed accusations of genocide and forced labor in Xinjiang as “nothing but rumors with ulterior motives and downright lies.”
The Withhold Release Order by US Customs and Border Protection only blocks imports of the material from Hoshine.
A source familiar with the order said that it does not affect the majority of US imports of polysilicon and other silica-based products.
A second source said that the move does not conflict with Biden’s climate goals and support for the US solar industry.
The Biden administration in March announced a target to cut the cost of solar energy by 60 percent within the next 10 years. Biden has also set a goal of a 100 percent clean electricity grid by 2035.
The sources said that the US is continuing to investigate allegations of forced labor by Chinese companies who supply polysilicon.
Xinjiang accounts for approximately 45 percent of the world’s solar-grade polysilicon supply, a report by solar industry analysts found.
The two sources familiar with the policy said that the White House sees the actions as a “natural continuation” of the G7 agreement earlier this month to eliminate forced labor from supply chains.
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