Traffic light in the climatic dilemma: solar expansion or human rights?

Created: 12/27/2021, 3:14 PM

From: Christiane Kühl

Olaf Scholz (SPD) and Angela Merkel (CDU) © Michael Kappeler / dpa

Germany wants to expand solar energy - and enforce human rights in the supply chain.

That will be difficult: important solar raw materials come from China's Xinjiang province.

• The traffic light government * wants to massively expand photovoltaics in Germany in order to achieve the climate targets.

• But there is a problem: essential raw materials come from Xinjiang.

  Reports accuse China of serious human rights violations against the Uyghurs living there.

• In Xinjiang, there also appears to be forced labor in the production of polysilicon for solar modules.

• This article is 

  available to IPPEN.MEDIA

   as part of a cooperation with the 

  China.Table Professional Briefing -

  China.Table

   first published it 

   on December 21, 2021.

Berlin - The new federal government has big plans for the expansion of renewable energies.

She wants to use “all suitable roof areas” for solar energy.

By 2030, "around 200 gigawatts" of photovoltaic capacity are to be achieved.

That means a quadrupling of the currently installed capacity.

The traffic light coalition wants to remove many "hurdles for expansion" out of the way.

This is what the coalition agreement says.

A major hurdle that is not mentioned there is the supply chain for the solar industry.

A large part of the basic material for solar cells, polysilicon, comes from China's Xinjiang Autonomous Region *.

However, there are allegations that this polysilicon is produced by forced labor of the Uyghur ethnic group.

This threatens considerable problems if ethical standards are to apply to this supply chain in the future.

Foreign Minister Annalena Baerbock recently announced a clearer policy against human rights violations in China *.

"If there is no longer any access to products that come from regions like Xinjiang, where forced labor is common practice, that is a big problem for an exporting country like China," she said in an interview with

and

.

Germany: Depending on solar raw materials from Xinjiang

But not only China * would then face a problem.

The expansion of solar energy in Germany could also stall.

Much of the polysilicon is processed directly in China.

The People's Republic is the world market leader in the solar sector and dominates all production steps.

Worldwide, three out of four solar modules and 83 percent of solar cells come from China.

When it comes to polysilicon, China dominates 77 percent of the world market.

Again, Xinjiang plays a special role here.

An estimated 50 percent of global polysilicon production comes from the western Chinese region.

Large amounts of energy are required for the production of polysilicon and the precursor silicon metal. They are abundant in Xinjiang. There is hardly any other part of the country where electricity and process heat for producing polysilicon are so cheap. Four of the largest manufacturers in the world have factories in Xinjiang, research by the news portal

shows. There have been allegations against three producers of forced labor in their factories.

The allegations are based on analyzes by the consulting firms Horizon Advisory and S&P Global Market Intelligence as well as research by Xinjiang researcher Adrian Zenz.

Independently of one another, they come to the conclusion that hundreds of slave laborers are used in the manufacture of polysilicon.

A

research team

was denied access to the factories.

The journalists have not been given any insight into the production and interpret this as a sign that the manufacturers have something to hide.

Photovoltaic Raw Materials: Options for Purchasing Outside Xinjiang

However, other experts have given some of the all-clear. The Chinese world market share looks very high on paper. But a large part of it remains in Germany. No other country installs as many solar modules as China. A large part of the domestic production is therefore not exported at all. In addition, the second half of Chinese production comes from regions outside of Xinjiang. Together with the production in other parts of the world, enough solar modules come together to meet the demand without shopping in Xinjiang.

"The USA and Europe together accounted for around 30 percent of new PV installations worldwide in 2020," says market observer Johannes Bernreuter from the consulting firm Bernreuter Research.

“Mathematically, there is currently enough polysilicon for the USA and Europe that is not affected by Xinjiang.” It is surprising that neither the EU statistical authority (Eurostat) nor the Federal Statistical Office have broken down data on how many solar cells and modules in Germany are actually imported from China.

Solar raw materials: The supply chain is still too opaque

But when western buyers buy solar cells and modules from China, they have so far been faced with a problem: During production, polysilicon from different sources is mixed. It could well be that there is raw material from Xinjiang, which was produced with forced labor. However, the Chinese manufacturers are adjusting to the needs of the West. Some companies presumably produced Xinjiang-free segments and used them in their solar modules for export to the USA and Europe, explains Bernreuter. "You can also plausibly document that the solar modules and cells do not contain any pre-products from Xinjiang."

According to this, the material flows could be split up: Xinjiang-free products are manufactured for export.

Solar modules whose raw material is manufactured using forced labor are still being installed in China due to the high domestic demand.

Western sanctions and boycotts of polysilicon from Xinjiang would therefore have little effect.

But Bernreuter criticizes this: "To put it bluntly: the West eases its conscience, but the Uyghurs are no better." However, one should not underestimate sanctions as a political signal, adds Bernreuter.

Photovoltaics: the problematic substance silicon

Another problem in the solar supply chain is the raw material for polysilicon: so-called metallurgical silicon.

The Chinese manufacturers of this high-purity silicon are not interested in transparency.

It is therefore difficult for importers to ensure that no forced labor is used in the production of metallurgical silicon.

As a result, some Western and Asian polysilicon manufacturers have already terminated their business relationships with the largest producer of metallurgical silicon, Hoshine Silicon from Xinjiang.

The US Customs Service has also taken action against Hoshine.

There is information that the company uses forced labor, the agency said.

Hoshine products are confiscated by customs in US ports.

USA: Anti-Xinjiang law in planning

But that by no means clarifies the situation. The USA * are currently discussing further measures to exclude forced labor in imported products in Xinjiang. Since these go much further, it further reduces the volume of legally importable raw materials. The US House of Representatives and the Senate recently agreed on a bill that generally places products from Xinjiang under suspicion of forced labor. This reverses the burden of proof. Imports would be banned until the US government was presented with solid evidence that no forced labor was used in the manufacture.

US President Joe Biden * has yet to approve the law. The Republicans accuse Biden of delaying tactics because the law makes it difficult to expand renewable energies. Biden's plans to expand solar energy are as ambitious as those of the new federal government. By 2050, a good half of US electricity is expected to be generated by solar energy. Currently it is only four percent.

But according to experts, the US law for the solar supply chain could remain ineffective.

If the US draft law comes into force next year, the Chinese manufacturers are already prepared.

"We assume that the manufacturers of solar wafers - all of which are located in China - will then be able to separate the supply chains for different markets," says Jenny Chase of

, confirming the assumption of the polysilicon expert Bernreuter.

Another question will be whether the buyer countries simply believe the suppliers' indications of origin.

Highly complex supply chains in photovoltaics

Solar supply chains are currently so complex that it is difficult to manufacture completely Xinjiang-free solar modules and cells. Industry expert Bernreuter therefore advises the industry to play on security and to become more independent from China. "There is no getting around building new solar supply chains outside of China." That could increase the price of the modules by around ten percent. "If you don't pay lip service to environmental, social and corporate governance criteria (ESG), investors and consumers must be prepared to pay this price," says Bernreuter.

The new federal government also indicated its willingness to act towards China.Table.

The Foreign Office announced that the government wanted to "support a possible import ban on products from forced labor at European level".

The European supply chain law is also to be "supported".

Clear edge against forced labor in Xinjiang sounds different, however.

From Nico Beckert

Nico Beckert

 has been editor for the

since January 2021 

.

His main topics are German-Chinese relations, economics and finance, the New Silk Road and Chinese climate policy.

Beckert previously wrote as a freelance author for 

 and 

.

This article appeared on

 December

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