The European Solar Manufacturing Council (ESMC) has written an open letter to the EU calling for “robust regulation” of forced labour in the solar supply chain. The letter cites both “the values of human rights” and “preventing the closure of European PV manufacturing companies” as reasons for regulation.
Signed by 37 European solar PV manufacturers, the letter alleges a link between forced labour and “the unsustainably low prices of Chinese-made solar PV modules and inverters” from polysilicon production in Xinjiang, China. Signatories include executives from German manufacturer Meyer Burger, UK manufacturer Oxford PV, Maxeon, solar startups Carbon and Holosolis and US Cadmium Telluride (CaTe) thin film module producer First Solar.
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It calls for the EU to implement five measures:
- Shift the burden of proof to companies coming from high-risk areas, whereby economic operators in areas exposed to forced labour are required to prove that their supply chains are ‘clean’ before being granted access to the European market.
- Grant the European Commission a similar mandate as “competent authorities”, allowing it to initiate investigations about suspected forced labour and ultimately prohibit products made with forced labour.
- Accelerate the implementation of regulations beyond the 18 months or 24 months proposed by the European Parliament and Commission respectively.
- Avoid recognising “unproven industry schemes” which come from stakeholders in the solar industry and “do not engage with workers”.
- Understand that disengagement is the only option in the case of state-sponsored forced labour, like that which is alleged in China. Companies in this system “lack the ability to conduct human rights due diligence”.
The letter follows a draft regulation that was accepted by the EU Internal Market and International Trade committees in October 2023 that called for a ban on products made with forced labour entering or leaving EU markets, explicitly including solar PV products. The regulation would put the burden of proof on companies in “high-risk areas” like Xinjiang, retroactively target offending goods already in the EU marketplace and introduce a framework for actively investigating supply chains.
Around one third of the world’s polysilicon is produced in Xinjiang. In its letter, the ESMC cites findings from the Global Slavery Index which places solar panels as the fourth highest at-risk product for forced labour imported by G20 nations and a study from Sheffield Hallam University in the UK, which found that the supply chains for many of the largest PV producers are insufficiently transparent to concretely rule out human rights abuse.
From a market standpoint, the ESMC has previously publicly decried an “intentional and purposeful attack by Chinese PV manufacturers” to offer uncompetitively low-priced products to the European market. It contends that this is linked with forced labour practices.
‘human rights obligations’
The singatories said: “While the solar industry is at the forefront of the fight against climate change, this does not offset its social and human rights obligations.”
In September last year the ESMC published an initial letter calling for a ban on products made using Forced Labour, in which it cited the US’ Uyghur Forced Labor Prevention Act (UFLPA) which requires any product entering the US from the Xinjiang region to actively prove that its supply chain is clean of forced labour.
As if to demonstrate the challenges of both climate change and human rights spelled out in the letter above, the UFLPA resulted in around 2GW of solar modules being held at US Customs in 2022 and contributed to ongoing supply issues for the US. Experts have said that the UFLPA will be the most consequential trade barrier for the US market in the long-term. Many products which were initially destined for the US market ended up in Europe, leading to an oversupply issue discussed in a webinar last October by PV Tech head of research Finlay Colville (Premium access).
The European solar industry has made some steps towards self-regulation in the absence of executive legislation. Trade body SolarPower Europe has launched its Solar Stewardship Initiative (SSI) which seeks to “drive a more responsible, sustainable and transparent solar value chain”. The SII launched its first ESG standard in October 2023, which would award companies certification based on audits and inspections of operations at specific sites.
At the Solar & Storage Live 2023 event in Birmingham, UK last autumn, PV Tech’s coverage identified that the SSI and supply chain transparency were forefront of discussion amongst manufacturers and developers alike. We discussed moves towards traceability with Singapore-headquartered manufacturer REC Solar and big Chinese player, JA Solar.
However, the SSI’s ability to audit the most upstream portions of the solar supply chain is up for debate; transparency into silicon or polysilicon production in Xinjiang is essentially non-existent – as shown by the Sheffield Hallam report. And, supply chain ‘bifurcation’ – where manufacturers can establish different production lines to adhere to different market standards – “does not eradicate forced labour and allows companies to continue sourcing from regions with state-sponsored forced labour”, the ESMC letter said.