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Human Rights Issues Cloud Transparency of Solar Supply Chain

Global supply chains for solar panels have begun shifting away from a heavy reliance on China due to a recent ban on products from Xinjiang. The US government and the United Nations accuse the Chinese government of committing human rights violations in the region. However, a new report by experts in human rights and the solar industry found that the majority of solar panels globally still have significant exposure to China and Xinjiang. The report also criticized the solar industry for lacking transparency in disclosing the origin of its products, making it difficult for buyers to determine if the solar panels were made without forced labor. The analysis was conducted by Alan Crawford, a solar industry analyst, and Laura T. Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University in England, along with anonymous researchers.

The solar industry has faced criticism for its ties to Xinjiang, which is a major provider of polysilicon, the material from which solar panels are made. In response, many companies have promised to scrutinize their supply chains and establish factories in the United States or Southeast Asia. The Solar Energy Industries Association has called on companies to shift their supply chains and sever ties with Xinjiang, and over 340 companies have signed a pledge to keep their supply chains free of forced labor. However, the report found that major global solar manufacturers, primarily headquartered in China, still have high potential exposure to Xinjiang. Even within “clean” supply chains established for Western markets, companies may still be obtaining raw materials from suppliers with links to Xinjiang.

The report highlighted several concerns, including companies not purchasing enough materials from outside Xinjiang to meet their production goals, indicating the possible use of undisclosed suppliers. Additionally, some companies provided contradictory information about their supply chains. China’s dominance over the solar industry has posed a challenge for countries like the United States, who are striving to deploy solar panels to address climate change. China controls at least 80 percent of global manufacturing for each stage of the supply chain. The Chinese government denies the presence of forced labor in its work programs in Xinjiang, but experts argue that those who refuse such programs can face detention or other punishments. The Uyghur Force Labor Prevention Act assumes that any product with materials from Xinjiang is made with forced labor unless proven otherwise.

The report raised concerns about the growing supply chain for solar panels as the industry projects significant growth in the coming years to address the energy transition. However, if materials and equipment with ties to forced labor are used, it could undermine the energy transition efforts. The solar industry plans to install double the amount of solar panels in the next decade, with annual growth expected to average 11 percent. In the short term, the manufacturing capacity in the United States is insufficient to meet national demand.

A report by the international human rights group Walk Free highlighted the increase in forced labor conditions globally, partly attributed to the rapid increase in renewable energy to combat climate change. While supporting the energy transition, the organization aims to eliminate forced labor as a source of products. The new report identified JinkoSolar and Hanwha Qcells as companies with high potential exposure to Xinjiang, despite their efforts to establish supply chains outside of China. JinkoSolar’s factory in Florida was raided by Homeland Security Investigations, which may be linked to concerns about misrepresentation of imports containing materials from Xinjiang. Both JinkoSolar and Hanwha Qcells denied the allegations and emphasized their commitment to transparency and compliance with US law.

The report also questioned the supply chain for other solar companies, including Meike Solar Technology, which reported Qcells as one of its largest customers despite Qcells claiming to have severed the supplier relationship. The solar energy tax credits and incentives offered in the United States have encouraged new investments in the country. However, US-based solar manufacturers acknowledge the challenges of catching up to China’s solar manufacturing capabilities and the need for a domestic supply chain to ensure transparency in sourcing materials.

Overall, the human rights issues surrounding the solar supply chain from Xinjiang have clouded transparency in the industry. Efforts by companies and industry associations to shift supply chains and cut ties with Xinjiang have not fully addressed the exposure to forced labor, undermining the progress made towards sustainability and clean energy.

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