Biden expected to sign Uyghur Forced Labor Prevention Act, which could further affect solar supply chain
The US House of Representatives voted unanimously this week in favor of a bill banning all imports from Xinjiang, China, unless suppliers can prove the products were not made using forced labor. The Uyghur Forced Labor Prevention Act (UFLPA) now awaits a Senate vote and President Joe Biden has already suggested he will sign it.
“We agree with Congress that action can and should be taken to hold the People’s Republic of China accountable for genocide and human rights violations and to address forced labor in Xinjiang. Therefore, the government has already taken concrete measures, including the imposition of visa restrictions, the Global Magnitsky Act and other financial sanctions, export controls, import restrictions and issuing a company advisory. The president also called on the G7 to commit to ensuring that all global supply chains are free from the use of forced labor – including from Xinjiang. The administration will work closely with Congress to implement this bill to ensure global supply chains are free from forced labor, while simultaneously working on key shore-based and third-shore supply chains, including semiconductors and clean energy. said Jen, White House press secretary. psaki.
The US solar industry is already dealing with the effects of a Withhold Release Order (WRO) on silicon-based products made by Hoshine Silicon Industry Co., based in Xinjiang. US Customs and Border Protection (CBP) released the WRO in June 2021 in response to allegations of companies in the Xinjiang region using forced labor. In particular, Hoshine makes industrial silicon that other Chinese polysilicon companies use to make solar grade polysilicon. The WRO banned any solar panel product containing Hoshine materials from entering the United States. It is estimated that half of the world’s polysilicon supply comes from Xinjiang Province.
It has been reported that Chinese solar panel companies such as JinkoSolar, Canadian Solar, Trina Solar and LONGi have detained materials under the WRO, despite the companies claiming not to use forced labor and have guidelines for traceability of materials as evidence. The Dutch DPA has an updated WRO Frequently Asked Questions in November, hinting at more lenient requirements, easing the burden on importers. It is now explicitly stated that “an importer can lower its risk of exclusions under the Hoshine WRO if it sources polysilicon from outside Xinjiang.”
Therefore, any complete Xinjiang product ban from the US government through the ULFPA should have a “modest” effect on the solar industry, industry analysts Roth Capital Partners said. Solar companies have already maneuvered the WRO and have likely started moving supply chains or collecting evidence to prove their products are not made with forced labor.
UFLPA leads with a “guilty until proven innocent” presumption and will be in effect 180 days after coming into effect. If Biden signs the bill in the coming weeks, the industry will have until June 2022 to “provide clear and convincing evidence that all products originating in Xinjiang (or from certain entities) have been produced free of forced labor,” Roth said. in an email.
UFLPA would be in effect for eight years, or until the president declares that China has ended “mass internment, forced labor and other gross violations of human rights … in the Xinjiang Uyghur Autonomous Region.”