According to reliable reports, China is running forced labor programs in the solar stronghold of Xinjiang. Despite this, European solar companies continue to buy products from China, but consciously avoid goods from Xinjiang.
Solar systems and their primary products from China are dividing the photovoltaics industry in Europe. While installers and other downstream providers appreciate the ultra-modern modules because of their low prices, politicians and local manufacturers of solar systems criticize the rapidly increasing supply from China as a solar glut. Overcapacity in the home country and disproportionate subsidies are driving solar systems from the People's Republic to Europe, say critics. The EU Commission recently initiated subsidy investigations for the first time against two Chinese companies that are bidding on a solar project in Romania.
China dominates the global solar market with around 80 percent market share of the entire supply chain, from the system to modules and wafers right down to the raw material polysilicon. But in addition to market power and allegations of subsidies, there is a third problem: China's Xinjiang region, which is predominantly inhabited by Muslim minorities, is a stronghold of the Chinese solar industry. At the same time, according to reliable reports, there are forced labor programs there. Members of minorities, especially Uighurs, are forced to work in factories at the behest of the government - mostly in Xinjiang itself, but apparently occasionally in other parts of the country. Beijing rejects the allegations, but there is no transparency.
Xinjiang: USA bans imports from China's solar stronghold
The USA has therefore been banning all imports from Xinjiang since the end of 2021 with its Uyghur Forced Labor Prevention Act - unless they can be proven to be free of forced labor. This is also why so many Chinese solar modules end up in Europe - purchased by European companies. Accusations quickly emerged that the European solar industry was using forced labor from Xinjiang.
This makes Xinjiang a real problem for the industry. Opponents of Chinese imports have already called on Brussels to follow the US and ban imports from Xinjiang. The European Solar Association ESMC, which is critical of China, is also calling for the planned EU regulation banning products made from forced labor to come into force as quickly as possible for ethical reasons; other solar associations are a little more reserved. Buyers who purchase solar systems from China are looking for local solutions. And the most important thing is to build Xinjiang-free supply chains from China.
Europe's solar companies are building Xinjiang-free supply chains in China
“We source 100 percent of our wafer cells and other primary products from three provinces: Anhui, Zhejiang and Jiangsu,” says Henning Rath, head of supply chain management at the Berlin solar startup Enpal, which sells or rents systems to end customers. “There we can ensure 100 percent that no forced labor is involved. These are completely normal, highly automated factories, to be honest with a standard that is significantly higher than what we currently see in Europe.”
According to the company, the employees of Enpal suppliers are regularly employed under Chinese law, members of the union and receive weekly payments. If all of these things are in place, Enpal is happy with it and will work with the companies. said Rath to
IPPEN.MEDIA.
These include JA Solar and Longi, two of the largest solar companies in China.
Supply chain laws force companies to buy from outside Xinjiang
There are initial indications that the EU solar industry is actually managing to avoid Xinjiang. Exports from the region to the 27 EU member states rose by 217.8 percent in January and February compared to the same period last year, as the Hong Kong newspaper
South China Morning Post
calculated based on Chinese customs data. The most popular goods from there were lithium-ion batteries, tomato paste and various goods of low value - but not products from the solar supply chain.
The new supply chain laws are also forcing buyers to rethink. They oblige companies to keep their supply chain free of human rights violations such as forced labor and serious environmental damage. The German law is already in force, the even stricter EU supply chain law is in the final stages of the process. Once they reach a certain size, companies must reliably document that there are no violations in their value chains. Both laws make no mention of China or Xinjiang - yet the region is the focus of these rules.
China separates supply chains for export and domestic production
Xinjiang's exact shares in Chinese solar production are not known. They are particularly high for the raw material polysilicon. But it is also possible to buy outside the region. “Xinjiang accounts for about 30 to 40 percent of China’s polysilicon,” says Rath. “This means: Everything that is produced in Xinjiang remains in the domestic market. What is exported actually comes from other provinces.”
The polysilicon in the Enpal solar systems largely comes from the southern province of Yunnan. In general, China is already trying to build a Xinjiang-free supply chain - even if, according to Rath, Beijing doesn't call it that: "But there is a clear instruction from Beijing that says: 'Build an export barrier-free supply chain!'" Leave it alone The companies apparently don't say it twice out of their own interest.