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China Bans Scrap Polysilicon

A Solar Panel ArrayIn an effort to curb solid waste pollution, China banned the import of scrap polysilicon at the beginning of August, an effort supported by its current environmental laws according to its Environmental Protection Ministry. Scrap polysilicon is a low-grade form of silicon not pure enough to use in microchips. However, it can be used as a component of solar wafers, which contain a variety of types of silicon, including up to 30% scrap polysilicon.

The new ban significantly impacts a number of facets of the silicon industry, particularly scrap polysilicon trading and supplying. It will undoubtedly financially threaten Chinese traders as well as smaller solar manufacturers who rely on the prevalence of the cheap material. KK Chan, chief executive of the investment management firm Nature Elements Capital, which specializes in clean energies and technologies, speculated to Reuters that the ban was intended to protect China’s emerging polysilicon industry, which “needs all the help it can get given a supply glut of the material.”

Thursday, the Standing Committee of the National People’s Congress, the inner council of China’s parliament, issued a resolution calling for increased measures and more legislation to fight climate change, saying China will “strive to control greenhouse gas emissions.” Ironically, in their statement they also blatantly rejected the idea of trade protection raised by certain U.S. lawmakers, who have proposed tariffs and other adjustment measures on imported products should China and other big emitters not do more to combat climate change.

Due to the credit crunch and the ensuing worldwide recession, a great deal of funding for emerging energy technologies, including solar power, disappeared. As a result, the demand for solar wafers and solar panels fell drastically, and the price of polysilicon plummeted, dropping over $330 per kilogram since its peak last year. Nonetheless, Chinese production of polysilicon continues to increase, jumping to 86,000 tons by the end of this year.

China currently produces more than 60% of the world’s solar panels. It is one of the most significant users of both high- and low-grade polysilicon worldwide. Since the ban was enforced at the beginning of August, the price of polysilicon in China rose from $67 to $72 per kilogram.

Photo Credit: LanceCheungImages at flickr

Written by Lisa Wojnovich

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