Around 2.1 GW of solar projects representing a total investment of about $2.2 billion on a payroll of 3,000 construction workers is at risk as U.S. Customs and Border Protection (CBP) enforces action to stop the flow of goods that may have been produced using forced labor in China’s Xinjiang region.
Philip Shen, an analyst with Roth Capital Partners, offered those numbers and said that JinkoSolar has had 100 MW of modules detained by customs agents and that the company is “not able to ship from Malaysia to the U.S.”
In addition, Trina Solar had six next-generation test modules detained and Canadian Solar had four modules detained. The Canadian Solar modules may have been headed for the Solar Power International trade show in September in New Orleans.
pv magazine has learned independently that all three companies have had products detained by border agents. Both Trina Solar and Canadian Solar said the detentions directly involved their products.
In remarks given during a webinar hosted by Roth Capital, Elise Shibles, an attorney with Sandler, Travis & Rosenberg, said there was a “low likelihood” that any of the detained modules would be released. Affected importers have three months to prove that no forced labor was involved at any stage of the product’s production. But Customs and Border Patrol have set a “high bar” in terms of what documentation must be produced to secure the products’ release. She said that the documentation “is almost never enough” to satisfy release requirements.
The amount of detail that will need to be provided by companies that have product detained by border agents will require “unprecedented cooperation” from upstream suppliers, said Richard Mojica, a lawyer with the firm Miller & Chevalier.
Withhold Release Order
The detentions all stem from a June 24 “Withhold Release Order” issued by the Customs and Border Protection against Hoshine Silicon Industry Co. Ltd., a company located in China’s Xinjiang Uyghur Autonomous Region. The Withhold Release Order instructs personnel at all U.S. ports of entry to “immediately begin to detain shipments containing silica-based products” made by Hoshine and its subsidiaries.
The CBP acted in response to what officials said were credible reports of forced labor being in the solar supply chain in the Xinjiang region of China. Reports have surfaced in recent days that shipments are being detained in what many believe to be the first stage of long-term enforcement action.
As CBP gathers more information, it could target other manufacturers and detain more imports. The action is creating “tension” within the Biden administration, Mojica said.
On the one hand, the president has issued statements opposing forced labor in supply chains. On the other hand, it also is pushing for a rapid expansion of green energy resources, including solar. A White House brief said that solar deployment would need to accelerate at a pace up to four times faster than today in order to meet clean energy targets by 2035.
Trade pressure grew in mid-August after a group of companies asked the U.S. Commerce Department to impose antidumping (AD) and countervailing duty (CVD) orders on a handful of producers of crystalline silicon photovoltaic cells and modules that are imported from Malaysia, Thailand, and Vietnam. The American Solar Manufacturers Against Chinese Circumvention filed three petitions through the law firm Wiley Rein requesting that Commerce investigate what it said are “unfairly traded imports” from the three countries.
The group said that circumvention of antidumping and duties on Chinese solar products has “hobbled the U.S. industry, eviscerated our supply chains, and put our clean energy future at risk.”
Ship, rail, or air freight
Shibles, who spent 11 years as a CBP lawyer, said during the webinar that the detention does not prevent the product from being exported away from the U.S. And she said that product can be identified regardless of how it enters the U.S., whether by ship, rail, or air freight. She said that CBP likely will use a wide range of sources to identify potential companies and products, including non-governmental organizations, press reports, the U.S. Department of Labor, as well as international partners.
Nathan Picarsic of Horizon Advisory said that the solar industry is “woefully behind” both the agriculture and apparel industries when it comes to preparing for and responding to WRO enforcement.
Companies in other industries have dedicated teams that monitor for and act to mitigate CBP enforcement risk, he said. By contrast, the solar industry largely has had little recognition of similar risk indicators. “The reality is baked in to the agriculture and apparel” industries, he said.
The solar industry has made some progress since the beginning of the year to improve supply chain traceability, said Andy Klump with Clean Energy Associates. For example, the Solar Energy Industries Association earlier this year published a supply chain traceability protocol.
And, companies can avoid CBP detention by shifting supply chains away from potential conflict regions.
pv magazine reported August 18 that JinkoSolar had signed a five-year, $1.86 billion agreement to buy 70,000 tons of PV module raw material polysilicon from German producer Wacker. The polysilicon manufactured at Wacker sites in Germany and the U.S. will begin to be supplied in September and continue through December 2026.
Mojica said the move by Jinko may be an effective strategy to avoid the CBP dragnet.
“Suppliers who can provide documentation should have no issue” at the border, he said.
This article was updated on August 20 to clarify the source of information obtained from Jinko Solar.
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