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Forced labor in China triggers investigation into solar panel dumping

  • Jul 6, 2022
  • 289 views
Source: 
Gazette

Jul. 5—A firestorm of criticism exploded when U.S. solar panel producer Auxin Solar CEO Mamun Rashid filed an unfair trade practices complaint with the U.S. Department of Commerce.

When rumors emerged that punitive retroactive tariffs on imported panels could go as high as 250%, it brought importation of solar panels from Southeast Asia to a sudden halt and threw the industry into a panic.

Gov. Jared Polis urged Secretary of Commerce Gina Raimondo to immediately end the federal investigation, noting Colorado's efforts to transition to 100% renewable energy by 2040.

"This investigation jeopardizes our shared interest in providing financial relief to residents in the transition to affordable clean energy," Polis said in a statement shortly after the investigation was opened April 1.

In an interview with The Gazette, Rashid said: "I make solar panels and the renewable energy industry is my market. I appreciate the urgency of addressing climate change. However, addressing climate change can never be more important than human rights. It should not be more important than abiding by U.S. trade laws."

Government support and subsidies in China, along with the use of forced labor, allow Chinese manufacturers to produce solar panels and components for as much as 40% less than Auxin can.

The Obama administration put tariffs in place in 2012 after an investigation that found China was engaged in predatory pricing that drove almost all U.S. panel producers out of business.

"All I've requested is an investigation because I feel we need to have a level playing field," Rashid said. "And I don't think we have a level playing field because we're competing with a nonmarket economy. And we're competing with a country that wants to dominate the world."

In a May speech on the floor of the U.S. Senate, Sen. Michael Bennet, D-Colo., said: "Washington should be lifting up Colorado's success as exactly the kind of progress we need to achieve net-zero emissions by 2050 — which we have to do. And instead, the Commerce Department's investigation is driving our solar industry out of business."

But Rashid is unapologetic for filing the petition, which Raimondo said she was compelled by federal law to investigate.

Rashid has been criticized by the Solar Energy Industries Association, which represents more than 1,000 members worldwide and whose credo is in part to "shape fair market rules that promote competition and the growth of reliable, low-cost solar power."

"I just want to point out the anti-Asian rhetoric that is really disappointing that we see coming out of the opponent's community. Read the American Prospect article and decide for yourself whether that article targeting specific companies in both China and South Korea, whether that reeks of anti-Asian rhetoric or not," John Smirnow, SEIA's general counsel and vice president of market strategy, said during a June 7 SEIA webinar about the investigation.

"Our country's ability to generate electricity is being threatened by Auxin's investigation."

"These guys are essentially Chinese lobby firms," Rashid said. "They don't care about American manufacturing. So, when they're up in arms about lack of panel supply, this is not true. It's lack of panels that don't have tariffs on them that's the issue."

SEIA said it has been working since 2020 to move production out of the Xinjiang Uyghur region and create a protocol for ensuring solar components made in China are not produced by forced labor.

"We as an industry don't want any connection to it," Smirnow said.

Smirnow says SEIA has developed a traceability protocol to certify that components are not being made in the Xinjiang region.

It's unclear whether they created the protocol voluntarily or as a result of pressure by Congress in the form of the Uyghur Forced Labor Prevention Act.

How the law interacts with the Commerce Department investigation also is unclear, but Rashid dismisses the SEIA's traceability protocol.

"What I have to say is, SEIA is in no place to make such a determination, and neither am I," Rashid said.

"That's the job of the Commerce Department. So, I can't say either way, but I will tell you it's very hard to verify things in China, because China is not allowing other countries or third parties to go investigate."

The tariff assessed on Chinese panel components varies between 12% and 20%, and it applies to Chinese-run companies, including Canadian Solar, LONGi Solar, JinkoSolar, JA Solar, BYD, Trina Solar and Hanwha Q Cells.

"Some of these same companies were also pointed out in the report that came out a year or two ago as being the culprits of using the forced labor in China," Rashid said.

Rashid is referring to a 2021 report by Laura Murphy, professor of human rights and contemporary slavery, and Nyrola Elimä, a supply-chain analyst at the Helena Kennedy Centre for International Justice at Sheffield Hallam University in Sheffield, U.K.

The report details the forced relocation and involuntary labor of Indigenous Uyghur and Kazakh citizens from the Xinjiang Uyghur region to mine and refine the silicon used to make solar cells.

Rashid says surrendering U.S. manufacturing capacity and energy security to China is a bad idea, and he doesn't regret his choices.

"Not for an instant. I will go down if that's what's necessary," Rashid said.

"Are we saying we need to build out our energy grid off the backs of Chinese slave labor? Are we going to look the other way if the law is being violated?"

Rashid says the American worker hasn't been able to get back into the solar panel manufacturing race, despite the fact that solar panel technology was invented in the U.S. and was subsequently stolen by China.

"He's lost the race when their finished products are coming in and being sold at a lower cost than our bill of materials," Rashid continued.

"If we sold a panel, let's say for 39 cents per watt, you would have panels coming in at that same time from Southeast Asia between 22 cents and 25 cents per watt."

By 2024, says Rashid, U.S. solar panel production could fulfill 20%-30% of the domestic demand, if American companies were competing on a level playing field.

President Joe Biden issued a proclamation declaring an energy emergency that ostensibly allows him to suspend for two years new tariffs on solar panels coming from Southeast Asia, irrespective of the Commerce Department's determination in Auxin's case.

"Of course, we don't know what the determination is going to be, but in the middle of an investigation, we're going to declare an energy emergency and call a 24-month moratorium? I think the American public should be intelligent enough to understand if that makes sense or not," Rashid said.

Bennet and U.S. Sen. John Hickenlooper, D-Colo., released a joint statement June 6 approving of Biden's proclamation.

"This is the moment when we should be doing everything we can to invest in America's solar industry and accelerate deployment of clean energy," Bennet said. "I'm pleased that President Biden has listened to our calls."

"We must prioritize U.S. solar power to expand our clean energy economy," Hickenlooper said. "It's critical to reaching net-zero emissions. President Biden's executive order will ensure our domestic solar industry can grow and create good jobs."

But Rashid is not so sure that Biden has authority to suspend the tariffs.

"What I can officially say on this topic is we're exploring all of our legal options, and we're exploring if the president's action was legal or not," Rashid said.

___

(c)2022 The Gazette (Colorado Springs, Colo.)

Visit The Gazette (Colorado Springs, Colo.) at www.gazette.com

Distributed by Tribune Content Agency, LLC.

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