How to make sure your solar parts weren’t sourced from Xinjiang or concerned compelled labor
This was originally published by the Clean Energy Associates.
In the last few weeks and months there has been a lot of press and discussion about the ethical sourcing of PV modules, especially about whether the solar industry is in any way tied to the use of forced labor. Since the Customs Act of the 1930s, the United States has banned the import of goods using forced labor. However, new legislation making its way through Congress in the US would prohibit the importation of goods from Xinjiang, China, unless it can be proven that no forced labor was used.
The proposed bill, the Uighur Forced Labor Prevention Act, effectively declares everything and everyone in Xinjiang guilty until proven innocent. About 50% of the world’s polysilicon, a key component in solar modules that use crystalline silicon solar cells, comes from Xinjiang, China – a region that many outside of China believe to be forced labor.
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What is the Uighur Law to Prevent Forced Labor?
HR6210 – Uyghur Forced Labor Prevention Act is a bill proposed by US Congress officials that “imposes various restrictions on the Xinjiang Uyghur Autonomous Region of China, including banning certain imports from Xinjiang and imposing sanctions against those responsible for human rights violations there. “As stated on congress.gov:
“Goods made or manufactured in Xinjiang are not eligible for entry into the United States unless Customs and Border Protection (1) determines that the goods were not made by convicts, forced labor or forced labor under criminal penalties. and (2) report such determination to Congress and the public. “
How Does Uighur Forced Labor Prevention Law Affect Solar Companies?
Thanks to abundant, inexpensive electricity, over 50% of the world’s polysilicon supply is produced in Xinjiang, China. Around 95% of all solar modules manufactured today use polysilicon, the raw material for manufacturing a silicon block. The ingot is then cut into thin slices called silicon wafers, which become solar cells that go into PV modules.
If the proposed Uighur Forced Labor Prevention Act becomes law, U.S. Customs and Border Protection could prohibit the legality of goods (such as solar panels) if any component (including polysilicon) originates from Xinjiang unless proven that no forced labor was used. However, evidence that no forced labor is used in a production facility in Xinjiang is practically implausible today.
In essence, this bill would eliminate half of the world’s supply of a major solar panel raw material for those importing to the US. While enough polysilicon is being produced outside of Xinjiang to meet the polysilicon needs for all crystalline modules in the United States, supply chains are not fully equipped today.
Where is the legislation and who does it affect?
On September 22, 2020, the law was passed by the United States House of Representatives with 64 Democratic and 23 Republican co-sponsors. The bill was received by the United States Senate on September 23, 2020. If the bill is passed and passed by the Senate, it will be sent to President Biden for signature.
With the overwhelming bipartisan support for this law and the Biden government’s stated plan to sign it, it is very likely that the Uighur Forced Labor Prevention Act will be incorporated into the law in 2021. Once passed, implementation could take place within 4 months, although U.S. Customs and Border Protection today have the right to suspend imports of goods suspected of being a slave to the Customs Act of 1930.
Perhaps as a precedent, the US announced on January 13th that imports of all cotton and tomatoes from Xinjiang are now banned with immediate effect.
Although the legislation in question now severely affects imports into the U.S., similar legislation is being considered in Europe and is likely to follow suit in other countries and regions around the world as governments and companies take action and make purchasing decisions to address forced labor practices and -Eliminate materials in the supply chain.
For those importing solar panels, now is the time to prepare and act. Here you can comply with the Uyghur law to prevent forced labor
Nobody wants to source products using forced labor and it is recommended that proactive measures be taken now to avoid compromising this legislation as it is passed. Regardless of the likelihood of this new legislation becoming law, existing laws and codes of conduct have laid a solid foundation for action.
Here are steps you can implement today:
1) Sign the SEIA pledge against forced labor. The Solar Energy Industries Association (SEIA) has called on the solar industry and its members to sign a pledge against forced labor. Signing this pledge is the first good faith step you can take to oppose slave labor.
2) Include the language of forced labor in your code of conduct and solar procurement contracts. According to a fact sheet published by Customs and Border Patrol, one of the steps in supporting a forced labor determination is to have a social compliance system. This can mean developing and actively maintaining a code of conduct for your company that states that you will not support, condone, or do business with organizations that engage in forced labor and that you require your suppliers to behave in a similar manner.
Your employees should be trained on the company’s code of conduct and enforcement mechanisms in place. Companies may need to demonstrate to US authorities that employees are familiar with the Code of Conduct and that it contains provisions for filing complaints, establishing enforcement mechanisms and other necessary protective measures for workers.
3) Ask your solar panel supplier to have similar regulations. The Customs and Border Protection Agency has full authority to block any goods that they suspect contain components that involve forced labor. Therefore, companies should require their PV suppliers to have similar Code of Conduct provisions in their contracts, and require their suppliers to have the same provisions throughout the supply chain so that they can provide customs with a comprehensive document path that shows the whole Supply chain is against the use of forced labor.
4) Move your solar supply chain outside of Xinjiang. SEIA has already encouraged solar companies to relocate their supply chains outside of Xinjiang. While it is possible to source solar modules and all of their respective components entirely from outside of Xinjiang for the U.S. market, it can create an imbalance between supply and demand for non-Xinjiang polysilicon, greater use of polysilicon with higher production costs that this results in a significant increase in the price of polysilicon, leading to a possible increase in the price (or a slower decrease in price over time) of a PV module.
Another complication arises when polysilicon from other parts of China is used. A standard practice for ingot suppliers is to mix batches of polysilicon from different sources without clear separation. Even if most of the polysilicon used in your solar panels came from outside of Xinjiang and only a tiny percentage used polysilicon from Xinjiang, customs could stop all shipping.
Therefore, the final step is to do a full traceability audit of your solar supply chain.
5) Implement full component traceability for your solar supply chain. As required by certifications for everything from conflict-free diamonds and sustainable cotton to fair trade coffee and organic products, importers will likely need to hire an outside auditor to demonstrate “full traceability” – auditing of all production, refining and manufacturing and assembly processes to ensure that no production is from Xinjiang.
It is not enough that the wafers, cells and modules of a solar module were not assembled in the region – a company also has to prove that even the basic component, the polysilicon, comes from outside Xinjiang. Indeed, it may be necessary to show that the silicon metal, which is a precursor to highly purified polysilicon, does not come from Xinjiang.
Paul Wormser is VP of Technology at Clean Energy Associates (CEA). Clean Energy Associates provides industry players with a solar supply chain traceability audit. The global team of CEA solar supply chain experts with more than 1,000 years of industry experience provides valuable industry data on technology, supply chain and raw materials from local manufacturers. Our team of 115+ engineering teams is in factories around the world every day performing quality assurance audits.