Thursday, May 6, 2021

China’s Solar Dominance presents Biden with an Ugly Dilemma

WASHINGTON – President Biden has repeatedly promised to work with China on issues such as climate change, while Beijing challenges human rights and unfair trade practices.

But those goals are now coming across as a struggle in the global solar field Biden Administration with a Difficult Choice As the United States expands its use of solar energy domestically to reduce carbon dioxide emissions.

The dilemma stems from an inconvenient reality: China dominates the global supply chain for solar power, relying on the United States for solar power. And Emerging evidence Some of China’s largest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, often seen as red flags for potential forced labor and human rights abuses.

This week, Mr. Biden is Inviting world leaders to a climate summit in Washington, Where he hopes to unveil an ambitious plan to cut US emissions over the next decade. The administration is already achieving the target of producing 100 percent of the nation’s electricity by 2035, such as solar, wind or nuclear power. To accomplish that goal, the United States May need to double its annual speed Of solar installations.

This is likely to be an economic boon for China, as the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, Many of which are imported From Chinese owned factories in Vietnam, Malaysia and Thailand.

China also supplies a number of major components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. About half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon Came from US-owned companies.

“Democrats are placed in a difficult position,” said Francine Sullivan, vice president of business development at REC Silicon, a polysilicon manufacturer based in Norway with factories in the United States. “Do you want to stand for human rights in China, or do you want cheap solar panels?”

Under pressure from influential supporters, the administration is increasingly under pressure not to turn a blind eye to possible human rights abuses to achieve its climate goals.

Richard L., President of AFL-CIO. “As America wants to address climate change, we should not allow the Chinese Communist Party to use labor forcibly to meet the needs of our country,” Trumka said. A letter on 12 March Urged the Biden administration to stop the import of polysilicon-containing solar products from the Xinjiang region.

China’s hold on the global solar sector dates back to the late 2000s. In an effort to reduce dependence on foreign energy, Beijing invested large sums of money in solar technology, enabling companies to invest multibillion-dollars in new factories and gain market share globally.

The price of panels fell to accelerate the adoption of solar energy worldwide, forcing dozens of companies out of business in the United States, Europe and elsewhere due to China’s surge in production.

Over the years, Chinese polysilicon manufacturers have moved to Xinjiang by luring abundant coal and inexpensive electricity for their energy-intensive production.

Xinjiang is now infamous As the site of a huge program of detention and surveillance, which the Chinese government has run against the Muslim Uygar and other minority groups. Human rights groups say Chinese authorities may have detained a million or more minorities at camps and other sites where they face torture, deportation and forced labor.

In A report last yearSkyline Advisor, a consultancy in Washington, citing Chinese news reports and government announcements that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar helped Chinese workers Was transferred. Government from the bad parts of Xinjiang.

Ginkgo Solar Those allegations denied, As did the Chinese government. Xinjue Longjen, vice president of Xinjiang Dako – a unit of one of the companies cited by Horizon Consultant – said that the polysilicon plants were not labor intensive, and that the company’s workers were working independently and could leave if they wanted to. According to the global times, A newspaper owned by the Chinese Communist Party. The report stated that out of 1,934 workers in Xinjiang Dako, only 18 were from ethnic minorities, and none were Uigars.

Other companies did not respond to requests for comment.

Experts have made it difficult to estimate how many laborers may be employed in Xinjiang to travel to Chinese solar facilities that banned travel and reporting. Many multinationals have also struggled to gain access to the region’s factories to control the risk of forcible labor in their supply chains.

Chief executive of solar panel manufacturer First Solar in the United States, Mark Widmer, said that exposure to Xinjiang was “an unfortunate reality for most of the industry.”

“It’s difficult to be comfortable with how the industry has evolved, that you don’t have any form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, it’s going to be tough.”

The revelations have attracted the attention of lawmakers and customs officials, and prompted concerns among solar investors that the sector may be destined for tougher regulation.

Under the Trump administration, US customs agents took a strict line against products allegedly made with forced labor in Xinjiang Wide ban on cotton and tomatoes From the region. Those restrictions have forced the restructuring of global supply chains, particularly in the apparel sector.

The Biden administration has said it is still reviewing the Trump administration’s policies, and has not yet indicated whether it will pursue other restrictions on products or companies. But both Mr. Biden and his advisors have insisted that The United States plans to confront China On human rights abuses in Xinjiang.

A spokesman for the National Security Council said that the Drakian treatment of Uygar “cannot be ignored,” and that the administration was “effectively studying ways to ensure that we, including solar products,” by forced labor. Made products are not imported.

Congress can also step up. Since the beginning of the year, the House and Senate have reintroduced versions of the Uygar Forced Labor Prevention Act, which would recognize that imports from Xinjiang were made with forced labor and were blocked from US ports, when Even importers are not. Showed evidence otherwise. The House version of the bill singles out Polysilicon as a priority for enforcement.

According to members of Congress, the legislation has broad bipartisan support and could be included in a bill related to China, which Democrats hope to introduce this year.

Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has attempted to help solar companies locate materials in their supply chains. Has also organized 236 companies pledge To resist forced labor and encouraged companies to have any kind of relationship with Xinjiang by June.

Some Chinese companies have responded by reshuffling their supply chains, recouping polysilicon and other solar products they make for US buyers outside Xinjiang, and then directing their Xinjiang-made products to China and other markets We do.

Analysts say such a reorganization is possible in principle. About 35 percent of the world’s polysilicon comes from regions other than Xinjiang, China, while the United States and the European Union together make up about 30 percent of global solar panel demand. According to Johannes Bernreuter, A polysilicon market analyst in Bernreuter Research.

John Smirn, general manager of the Solar Energy Industries Association, said that most solar companies were already better at removing supply chains from Xinjiang.

“Our understanding is that all major suppliers are going to be able to assure their customers that polysilicon is not included in the area by having their products come to the US,” he said.

But it is unclear whether this reorganization will cause criticism. Have episodes of forced labor Also reported In Chinese facilities outside Xinjiang where Uygars and other minorities are relocated to work. And the ban on Xinjiang’s products could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.

Advocates of human rights have argued that allowing Chinese companies to bend their supply chains to serve American and non-American buyers could do little to improve conditions in Xinjiang and to force the Biden administration to take strong action Is pressed.

“The Chinese government must clarify the message that this economic model is not going to be supported by governments or businesses,” said Kathy Fingold, director of the International Department of the AFL-CIO.

Chinese companies are also facing pressure from Beijing for not accepting US demands, as this can be seen as a silent criticism of the government’s activities in Xinjiang.

In A statement in januaryThe China Photovoltaic Industry Association and the China Nonferrous Metals Industry Association condemned the “irresponsible statements” of American industries, which they said were directed to prevent the development of Xinjiang and “arbitration in Chinese domestic affairs”.

“It is widely known that the ‘forced labor’ issue is in its entirety of the century that the United States and some other Western countries have considered nothing,” he said.

On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.

But reinvigorating solar manufacturing in the United States can be a challenge, analysts said, given the time needed to significantly increase US production, and it could also increase the price of solar panels in the short term.

The United States still has some facilities for the manufacture of polysilicon, but they have been facing serious prospects since 2013, when China imposed counter-tariffs on American polysilicon. Hemlock semiconductor As a new $ 1.2 billion facility In Tennessee in 2014, while REC Silicon Turn off its polysilicon feature In Washington in 2019.

China has promised to execute major purchases of American polysilicon under trade agreement Signed last year, But to no avail from those transactions.

In the near term, tensions over Xinjiang could be a boon for the few remaining US suppliers. Ms Sullivan said some small US solar developers had been involved with REC Silicon in recent months to inquire about non-Chinese products.

But US companies need promises of large-scale, long-term orders, she said, adding that when she speaks of the limited supply of solar products that do not touch China, people “become visually ill.” Huh.”

“That’s the big lesson,” Ms. Sullivan said. “You depend on China, and what does it mean? We have to swallow our values ​​to do solar.”

Chris buckley Contributed to reporting.

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