US ban on China’s Xinjiang solar products linked to alleged forced labour heaps pressure on supply chains

Newly blacklisted Hoshine Silicon Industry is Xinjiang’s biggest producer of metallurgical-grade silicon, a key raw material in solar panels

Joe Biden administration’s ban on silica-based products from the Chinese company is likely to touch many of the world’s biggest solar-grade polysilicon makers

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Heliostats are seen at a 50-megawatt solar thermal power plant in the Xinjiang Uygur autonomous region. Photo: Getty Images

Published: 12:00am, 29 Jun 2021Updated: 7:40am, 29 Jun 2021

The Biden administration’s ban on products from a Chinese company in the Xinjiang Uygur autonomous region over alleged human rights abuses is expected to complicate solar supply chains and create new challenges for US companies trying to cut exposure to the region.

Last week, the US announced a ban on silica-based products containing materials from Xinjiang-based Hoshine Silicon Industry and updated its trade blacklist to include Hoshine; Xinjiang Daqo New Energy; Xinjiang East Hope Nonferrous Metals; Xinjiang GCL New Energy Material Technology; and the Xinjiang Production and Construction Corps.

The action against Hoshine – identified in a report earlier this year as having “significant exposure to forced labour through its quartz supplier” – will have significant knock-on effects for the global solar supply chain and could potentially slow development of the industry just as demand for clean energy begins to take off, according to analysts.

“The top eight polysilicon manufacturers, which produced more than 90 per cent of the global solar-grade polysilicon output in 2020, have all been mentioned by Hoshine as customers,” said Johannes Bernreuter, a research analyst who studies the solar supply chain and produces annual reports on the polysilicon market.

“This will increase the pressure on polysilicon manufacturers to cut ties with Hoshine,” he said.