BIS Reports on Impact of its Export Controls on Green Technology Items

Review of Dual-Use Export Controls Impact on Green Tech Trade

BIS’ assessment examines the potential impact of U.S. dual-use export controls on commodities, software, and technology subject to an export license requirement under the Export Administration Regulations that either are or can be used to create products that contribute to clean energy, energy efficiency, and other environmental or green initiatives, such as wind turbines and solar panels.

BIS notes that although this is not an exhaustive assessment of all green technology items and initiatives that may be subject to the EAR, it is an attempt to anticipate ways that BIS can support facilitation of secure trade in this important area, while mitigating national security concerns.

Most Green Items Do Not Require BIS License, but Emerging Technologies Could

Based on data received from survey respondents and other sources¹, BIS finds that most green technology-related items do not require a BIS export license. Licensed green technology-related exports represented 0.05% of total U.S. exports and a mere 0.004% of all energy sector exports in 2008.

In most cases and for most destinations, BIS has determined that export licenses are not required for items in the following green technology areas: alternative fuel vehicles, commercial airlines noise reduction, biodegradable/bio-resins for composite materials, and green coating processes. However, research and emerging technologies in these fields could lead to the creation of new high-technology products that would be subject to export license requirements.

In addition, some of the high-technology parts, materials, and equipment used to produce green technology items in wind power, solar power, alternative fuel vehicles, water purification, and energy efficiency would likely require an export license.

Some Products are Subject to License, but Does Not have Adverse Effect

BIS states that there are several green technology items in the areas of water purification (e.g., chemicals, pumps, valves) and energy efficiency (i.e., industrial gas turbine components and thermal imaging cameras) that are subject to an export license requirement for most destinations, but the licensing and export statistics do not show that this license requirement is having an adverse effect on the competitiveness of these industries.

Exporter Concerns over Obtaining Licenses for Wind Turbine Materials

Exporters have expressed concern with the lengthy processing times and difficulty in obtaining export licenses for carbon fiber and machine tools, the material and equipment needed for the production of wind turbines and lighter weight (i.e., energy efficient) commercial composite aircraft structures and engine components. Two companies with production facilities in the U.S. that are industry leaders for tape laying and tow/fiber placement machines used to manufacture windmill turbine blades are considering moving production of these machines overseas, especially because of the increased demand for wind turbines.

BIS to Issue Guidance, Monitor Applications in Response to Exporter Concerns

As a result of its assessment and in response to exporter concerns, BIS states that it will:

Exporter guidance -- issue guidance to exporters clarifying which tape laying and tow/fiber placement machines would be controlled under ECCNs 1B001 or 1B101 for MT or NS reasons.

Monitor applications -- monitor the volume of export license applications received for chemicals, chemical equipment, industrial gas turbines and components, and thermal imaging cameras and adjust export licensing policy and regulations where possible to ensure that export controls do not hinder trade in these items, especially when intended for civilian (i.e., non-military) green-related end-uses, consistent with national security interests.

Develop working group -- develop a green technology working group comprised of existing TAC members to identify emerging technologies that can support green technology initiatives that may be subject to an export license requirement in the future.

Promote energy export efforts -- work with the International Trade Administration on harmonization with export promotion efforts for the energy sector

Develop license exception/review process -- work with other government agencies to develop a license exception, fast-track license review, and/or a one-time product/end-user review procedure for the export of items for civilian (i.e., non-military) green-related end-uses only.

(See BIS report for complete assessment.)

¹BIS specifically examined projects and initiatives receiving grant money from the American Recovery and Reinvestment Act of 2009 and loans from the Department of Energy’s Loan Guarantee Program that may be impacted by dual-use export controls; and survey responses from members of BIS’s Technical Advisory Committees and information from companies that identify items that are currently used or are being developed to support green technology initiatives.

(Report dated August 2010)