The EU Forced Labour Regulation: What it Means for Solar Supply Chains
March 18, 2026
Introduction: from due diligence to market access risk
Over the past decade, the European Union’s sustainability framework has largely relied on transparency and due diligence obligations to address environmental and human rights risks in global supply chains. Instruments such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) require companies to identify and manage risks through structured due diligence processes and disclosures.
The EU Forced Labour Regulation (FLR) marks a shift in this approach. Rather than functioning primarily as a disclosure regime, it introduces a market prohibition mechanism: products made with forced labour cannot be placed on, made available within, or be exported from the EU single market. This transforms forced labour risk from a reputational concern into a potential operational and commercial risk. Companies may face product withdrawals, import bans or export suspensions if authorities determine that forced labour occurred at any stage of production.
The implications are particularly relevant for sectors with complex global supply chains. Solar photovoltaic manufacturing is one example. As demand for solar technologies grows to support the energy transition, scrutiny is increasing to ensure that decarbonisation does not come at the expense of fundamental human rights.
At the same time, the European Commission is developing implementation guidelines for the regulation, expected by June 2026.
The regulation in brief: what the EU FLR does and how enforcement will work
Regulation (EU) 2024/3015 entered into force on 13 December 2024 and will apply from December 2027 following a three-year implementation period.
The regulation applies across all products, sectors and origins, covering both EU-manufactured goods and imports. The prohibition applies regardless of where forced labour occurs within the supply chain, whether during raw material extraction, component manufacturing or final assembly.
Where authorities determine that forced labour has been used, they may prohibit products from entering the EU market, order their withdrawal, suspend exports of EU-produced goods or require disposal of affected products. The prohibition does not apply to goods that have already reached end users.
Enforcement will be carried out by national competent authorities with support from the European Commission and customs authorities.
Investigations will follow a two-stage process. Authorities first conduct a preliminary assessment, reviewing available information to determine whether allegations merit further scrutiny. This may include company documentation, stakeholder submissions, civil society reporting and other external sources. If concerns remain, authorities may open a formal investigation. During this phase they may request documentation, conduct inspections and investigate supply chains more extensively. Because forced labour is often difficult to document directly, investigations are expected to rely on triangulated evidence, combining company records, worker testimony, audit findings, trade data and credible external reporting.
Investigations are expected to conclude within nine months where possible and will be prioritised based on the severity of forced labour risks and the volume of affected products in the EU market.
While the regulation does not introduce new due diligence obligations beyond existing EU frameworks, companies without robust human rights due diligence (HRDD) systems are likely to face greater enforcement exposure.
Supplemental developments: implementation guidelines and risk database
The European Commission is currently developing guidance to support implementation of the Forced Labour Regulation.
In early 2026 the Commission launched a Call for Evidence seeking stakeholder input on how the regulation should operate in practice. The consultation requested feedback on issues including the types of evidence authorities should consider during investigations, the documentation companies may need to provide during preliminary inquiries, and the information stakeholders should submit when raising allegations of forced labour. The consultation also sought views on best practices for forced labour due diligence, remediation approaches and capacity-building support for companies.
Following the consultation, which closed on 6 March, the Commission will conduct targeted engagement with industry and civil society during the first half of 2026. The final implementation guidelines are expected by 14 June 2026.
In parallel, the EU will establish a central database identifying high-risk products, sectors and geographic regions associated with forced labour risks. While the database will not name individual companies, it will support enforcement authorities and corporate risk assessments.
Why solar supply chains are likely to face particular scrutiny
Solar photovoltaic supply chains illustrate many of the challenges regulators face when investigating forced labour risks.
Solar module production involves several stages, including quartz mining, polysilicon production, ingot and wafer manufacturing, and cell and module assembly. These stages are frequently distributed across multiple regions and suppliers.
While module and cell manufacturers often maintain relatively mature traceability systems, transparency tends to decrease further upstream. Early production stages may involve intermediaries, material commingling and limited origin documentation, making it more difficult to trace inputs. As a result, forced labour risks may occur several tiers upstream from the final product, particularly in raw material extraction and early processing stages.
The sector has also been subject to scrutiny due to longstanding allegations of state-linked forced labour in China’s Xinjiang Uygur Autonomous Region (XUAR), which historically accounted for a large share of global solar-grade polysilicon production. Recent industry shifts, including manufacturing relocation within China and supply chain rerouting through Southeast Asia, illustrate the complexity of the issue. However, these changes do not necessarily eliminate exposure where upstream inputs remain linked to high-risk regions.
For regulators, this creates a key challenge: identifying forced labour risks within multi-tier supply chains where traceability remains incomplete.
What the FLR means for solar market actors
For companies operating across the solar value chain – including developers, engineering procurement and construction (EPC) contractors, asset owners, distributors and manufacturers – the regulation introduces several implications.
- Companies may face greater expectations around supply chain traceability, including mapping upstream inputs such as polysilicon.
- Authorities are likely to expect structured documentation demonstrating responsible sourcing systems, including supply chain mapping, supplier risk assessments, audit reports and grievance mechanisms.
- The regulation introduces the possibility of market disruption. Products linked to forced labour may be detained at customs, prohibited from entering the EU market or removed from circulation, potentially causing project delays and financial losses.
- The regulation may influence procurement strategies, with buyers favouring suppliers able to demonstrate robust HRDD systems, credible traceability and transparent risk management.
At the same time, some stakeholders warn that unilateral regulatory approaches could contribute to parallel supply chains serving different markets, potentially complicating global traceability.
What companies should do now
Although the Forced Labour Regulation does not introduce new formal due diligence obligations, companies without robust HRDD systems are likely to face greater investigation risks once it becomes operational. Companies operating in solar supply chains should therefore take several preparatory steps:
- Organisations should first map their value chains as comprehensively as possible, including upstream production stages where forced labour risks may be concentrated.
- Second, companies should strengthen HRDD processes in line with internationally recognised frameworks such as the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct.
- Third, contractual arrangements with suppliers should provide sufficient leverage to address risks, including supplier codes of conduct, audit rights and evidence-sharing requirements.
- Finally, companies should monitor regulatory developments as the Commission finalises implementation guidance in 2026.
Sector-specific initiatives such as the Solar Stewardship Initiative (SSI) can also support companies by providing third party independent site assessments covering environmental, social, governance and supply chain traceability topics.
How TDi supports companies
Managing forced labour risks within complex supply chains requires sector expertise and robust due diligence systems.
TDi Sustainability works with companies across mining, metals and renewable energy supply chains to support responsible sourcing and regulatory compliance. This includes mapping supply chains, conducting human rights risk assessments, designing OECD-aligned due diligence management systems and developing traceability and supplier engagement frameworks.
As regulatory expectations evolve, TDi also supports companies in preparing for emerging EU sustainability regulations by strengthening governance systems, improving risk identification processes and building credible evidence frameworks.
For companies operating in high-risk supply chains such as solar photovoltaics, proactive preparation will be essential to maintaining access to the EU market. Get in touch to discuss how TDi can help your business.
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