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The Biden administration placed extensive import and export
restrictions on producers of polysilicon products in the Xinjiang
region of China on 24 June, saying there is compelling evidence
they are using forced labor involving the region's ethnic Uyghur
population.
The affected firms are Hoshine Silicon Industry, Daqo New
Energy, East Hope Nonferrous Metals, GCL New Energy Material
Technology, and XPCC.
The US banned imports of goods or materials produced or derived
from silica-based products made by Hoshine, a manufacturer of
polysilicon used to produce solar panels. It also placed XPCC and
the Xinjiang operations of Hoshine, Daqo, East Hope, and GCL on
what is known as the entity list, meaning US firms seeking to
export, re-export, or engage in in-country transfers of technology
and goods must first get the green light from the Department of
Commerce.
The move, which has been expected for some time, was welcomed by
the Solar Energy Industries Association (SEIA), with the US
industry's main trade group saying the restrictions would protect
its member companies' supply chains and credibility.
"We fully support the Biden administration's efforts to address
any forced labor in the solar supply chain," SEIA said. "The fact
is, we do not have transparency into supply chains in the Xinjiang
region, and there is too much risk in operating there."
SEIA has been calling on its members since October 2020 to stop
sourcing polysilicon from the Xinjiang region and to use
traceability protocols in their supply chains.
The limited list of Chinese companies suggests a targeted
approach to Xinjiang sanctions meant to minimize disruption to the
solar industry supply chain, which would be a far from ideal
outcome from the standpoint of the Biden administration's climate
and renewables goals, according to IHS Markit Climate and Cleantech
Executive Director Peter Gardett.
The Biden administration is targeting a carbon-free power
generation sector by 2035, and solar power is critical to reaching
that goal. Solar projects accounted for 53% of the US clean energy
development pipeline at the end of the first quarter of 2021,
topping 44.4 GW of capacity, according to American Clean Power
Association data. At the same point in time, just over 45.8 GW of
solar capacity was online in the US, the data show.
Investors and policymakers have long been aware of the risks
inherent in China controlling such a large share of the solar
supply chain. The 24 June move could help spur efforts to relocate
or expand capacity of solar manufacturing to other regions and
countries, with attendant supply chain security benefits, Gardett
said in research issued 25 June.
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