The European Solar Manufacturing Council (ESMC) has issued an open letter emphasizing the need for European lawmakers to enact legislation prohibiting the sale of products manufactured using forced labor, particularly in Xinjiang, China. The council also provided recommendations to its members on addressing forced labor within their supply chains.
The ESMC drew attention to the fact that solar modules originating in Xinjiang are barred from entering the US market due to the US Uyghur Forced Labor Prevention Act (UFLPA). This law assumes that all goods produced in Xinjiang, either wholly or partially, are the result of forced labor, making them ineligible for the US market unless proven otherwise. Consequently, over 5,000 shipments, including those related to the solar PV industry, have been detained at US ports.
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In response to this situation, Chinese solar module manufacturers redirected their surplus products to the European market, resulting in an oversupply of over 40GW of PV modules made in China on the European market, equivalent to the entire 2022 installation volume in Europe. This oversupply has led to a significant drop in solar module prices and threatens the sustainability of European solar module production.
The ESMC's recommendations include urging the European Union (EU) to collaborate with the US to leverage the US Uyghur Forced Labor Prevention Act Entity List and the US Department of Labor's Register of Products Manufactured with Child or Forced Labor to restrict the importation of solar materials from Xinjiang, including polysilicon, wafers, cells, and modules.
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Additionally, the ESMC advises the use of the Foreign Subsidies Regulation to address foreign subsidies distorting the market and calls for the imposition of trade defense measures against China.
The council also proposes activating the EU procurement scheme to purchase European solar modules and integrating 40% of market share capacities for solar modules produced in the EU into the Net Zero Industry Act.
Furthermore, the ESMC outlined recommendations for its members to address forced labor links within their supply chains. These include refraining from sourcing any products or materials from Xinjiang, monitoring bifurcation to prevent suppliers from sourcing from Xinjiang through alternative routes, and implementing unique QR codes or manufacturing execution systems for a comprehensive digital history.
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Regular supplier audits focusing on high-risk suppliers, forced labor, and other environmental, social, and corporate governance (ESG) aspects are also encouraged. Solar companies are urged to provide training to staff to identify forced labor, particularly by focusing on governance documents and current legislation.
The ESMC underscores the need for EU action to protect the European PV manufacturing industry, which is threatened by the influx of “unsustainably low-priced PV modules” from Chinese manufacturers. In the open letter, the signatories expressed concerns that PV module prices have fallen by over 35% to €0.15 (US$0.16) per watt, leaving limited opportunities for these companies to sell their production under such circumstances.
