Could Australia Follow US Ban on Solar Panel Materials Linked to Forced Labour?

Australia’s solar industry could be about to face major supply challenges, following proposals to mirror moves by the United States to ban imports of ingredients key to solar panel manufacturing that have been linked to forced labour practices.

China is the world’s largest producer of polysilicon materials for use in solar panels and dominates the global market. According to a recent ranking of the world’s ten largest polysilicon producers published by German analyst group Bernreuter Research, seven of the top ten producers are located in China.

Four of the Chinese polysilicon plants are located within the Xinjiang Uyghur autonomous region – a region that has been linked with the persecution of the Uyghur minority. Combined, these four plants are responsible for around half of the world’s polysilicon production.

Last year, the Australian Strategic Policy Institute published its report ‘Uyghurs for Sale’ that estimated that around 800,000 Uyghurs had been transferred from the Xinjiang region into factories under forced labour conditions.

The response by governments to these and similar findings have been a feature of growing tensions with the Chinese government over a wide range of trade and geopolitical issues, with Australia aligning itself with the United States and other western-sphere allies using the plight of the Uyghurs as a point of criticism against the Chinese government.

In developments that could have significant flow-on impacts for Australia’s solar industry, the Biden administration has already moved to ban imports of silicon products – used in solar panel manufacturing – made by Chinese company Hoshine Silicon Industry. Hoshine is based primarily in the Xinjiang Uyghur Autonomous Region.

Last month, the United States Secretary of Homeland Security, Alejandro N. Mayorkas, said Hoshine had been issued with a “Withhold Release Order” to enable shipments by the company into the United States to be detained and seized.

“As President Biden made clear at the recent G7 summit, the United States will not tolerate modern-day slavery in our supply chains,” Mayorkas said. “This Withhold Release Order demonstrates we continue to protect human rights and international labour standards and promote a more fair and competitive global marketplace by fulfilling the Biden-Harris Administration’s commitment to ending forced labour.”

“The Withhold Release Order instructs personnel at all U.S. ports of entry to immediately begin to detain shipments containing silica-based products made by Hoshine and its subsidiaries,” the statement adds.

An additional statement released by the White House suggested the move to block some imports of Chinese produced solar panels may be at least partly motivated by a desire to support domestic investment in solar panel manufacturing capabilities, particularly as the new Biden administration looks to ramp up investments in clean energy technologies.

“The United States will not tolerate forced labour in our supply chains and will continue to stand up for our values and for U.S. workers and businesses,” the White House statement says.

“This includes maintaining support for the development of transparent and diverse clean energy supply chains at home free of forced labour — and supporting President Biden’s commitment to bold climate action, the domestic solar industry, and the jobs this vital industry creates.”

Outside of China, there are major polysilicon plants located in Germany, Malaysia, South Korea and the United States, but these plants control only a small portion of the global market. There are no significant polysilicon manufacturing facilities within Australia.

The moves by the United States to ban some imports from the Xinjiang region raise the prospect that similar measures could be introduced in Australia.

Any ban on Chinese produced solar panel equipment could have significant ramifications for the Australian market, with the vast majority of Australia’s supply of solar panels being sourced from Chinese manufacturers.

The senate foreign affairs committee recently concluded an inquiry into legislative amendments, proposed by independent senator Rex Patrick, that would enable the federal government to implement similar bans on the importation of products known to be linked to forced work practices.

The committee recommended that the legislative changes be introduced – winning the support of senators from across the entire political spectrum – having found that Australia was likely already importing products, including textiles, electronics and food products from the Xinjiang region and linked to forced labour practices.

In its final report, the committee recommends that an initial ban be introduced on cotton products manufactured in the Xinjiang region. While the committee stopped short of recommending a ban on imports of solar panels from the Xinjiang region, the committee included solar panels within a list of products of concern for their potential to be produced using some level of forced labour.

The Morrison government is facing pressure from within its own ranks to pass the proposed legislative amendments, which could occur before the next election. Still, there are no suggestions yet that such legislation could be used to limit the imports of solar panels into Australia.

Source: reneweconomy