GM Looking to Build Second Battery Factory in U.S.

General Motors, in a joint venture with LG Chem, aims to expand its effort to power electric vehicles; Tennessee eyed as a plant site

Workers connect a battery pack underneath a Chevrolet Bolt EV car at the General Motors Orion Assembly in Michigan in 2018. Photo: rebecca cook/Reuters

General Motors Co. GM -1.22% is looking to build a second battery factory in the U.S. with joint-venture partner LG Chem Ltd. 051910 4.51% , the latest move in the Detroit auto maker’s efforts to expand its investment in electric vehicles.

A GM spokesman confirmed to The Wall Street Journal that the companies are exploring building a second battery-cell plant and said a decision could come in the first half of this year.

GM and LG are close to completing a decision to locate the plant in Tennessee, said people familiar with the matter. A final selection hasn’t yet been made, the people said.

Already, the two companies are building a $2.3 billion battery plant in northeast Ohio that is expected to open next year and eventually supply enough batteries to power hundreds of thousands of vehicles annually. The new plant is likely to be a similar-size investment, some of the people said.

GM, the nation’s largest auto maker by sales, has set ambitious targets for converting its global lineup to electric vehicles, revealing its aim earlier this year to phase out gas-engine models from its showrooms by 2035.

The rush by GM and other global car companies to sell more plug-in models has stoked concerns among auto executives and analysts over future battery shortages and has led some auto manufacturers to get in the business of making their own battery cells, often in joint ventures with big battery makers.

LG Chem is in discussions with GM to add battery production, said Seungse Chang, the company’s senior vice president of corporate strategy at its battery-making subsidiary, in a statement. The company also plans additional expansions of its U.S. battery-making operations to support other auto makers, he said.

The Biden administration has made transitioning from gas-powered to electric vehicles a cornerstone of its domestic policy agenda, aiming to use the technology both to fight climate change and create new jobs to help cushion the possible loss of some in fossil-fuel industries.

The White House last week ordered a review of the U.S. battery supply chain, aiming to lessen dependence on countries like China, which currently dominates the market for batteries and their materials.

GM is investing $27 billion in electric and driverless cars through mid-decade, among the industry’s most aggressive bets. Unlike some rivals, GM is using in-house battery technology, branded Ultium, which company executives say will lower battery costs by nearly 40% on new plug-in vehicles that begin to roll out over the next year compared with those it sells today.

It is also supplying the technology to Honda Motor Co. to develop new electric models, and GM is looking for more such deals, GM Chief Executive Mary Barra said last week.

Ms. Barra is counting on 30 new battery-powered GM models globally by 2025—two-thirds of which are slated for North America—to deliver profit growth. Currently, the company sells only one electric model in the U.S., the Chevrolet Bolt, along with a few in China, and generates all its profit from gasoline- and diesel-powered vehicles.

Today, most battery manufacturing occurs in Asia and Europe, and the battery production that is in the U.S. is largely controlled by Tesla Inc., according to research firm Benchmark Mineral Intelligence. For example, the recently launched Ford Mustang Mach-E relies on batteries made in Poland.

But as auto makers prepare to sell more electric cars in the U.S., they also want to reduce the sizable costs of shipping heavy batteries across oceans, executives say.

Some car companies, such as GM and Volkswagen AG , have moved to vertically integrate, joining partners like LG and Northvolt AB to invest in their own battery-cell factories and lock in supplies. Tesla, meanwhile, operates a battery plant in Nevada with Panasonic Corp.

Ms. Barra hinted recently that GM may expand its battery-making capacity beyond the Ohio factory but hasn’t discussed specific plans.

“We are already seeing the benefits of having our own cell manufacturer,” she said during a virtual investor conference last week. “It’s allowing us to go much deeper into the supply base to secure what we need.”

The company already has begun retooling its North American factory network to build more plug-in vehicles. It is spending roughly $6 billion to convert assembly plants in Detroit, Spring Hill, Tenn., and Ingersoll, Ontario, to build plug-in cars.

The new U.S. battery plant would be a third for South Korean battery maker LG Chem. The company is also embroiled in a trade-secret dispute with rival SK Innovation Co., which it claims stole LG’s trade secrets through a targeted campaign of poaching employees. SKI has denied the allegations.

Last month, the U.S. International Trade Commission affirmed an earlier finding in LG’s favor that SKI destroyed evidence. The decision threatens to derail a large battery factory project SKI is constructing in Georgia. Both companies met last month with the Biden administration, according to people familiar with the meetings, and LG’s representatives believe the company would be able to increase U.S. production to cover any shortfalls caused by sanctions on SKI.

Write to Ben Foldy at Ben.Foldy@wsj.com and Mike Colias at Mike.Colias@wsj.com

Bill Offers Ethanol Greenhouse Gas Fix

Legislation Would Require EPA to Adopt Model for Ethanol’s GHG Profile

Congressional lawmakers introduce bills designed to provide ethanol greenhouse gas emission updates and to expand E15 availability. (DTN file photo by Nick Scalise)
Congressional lawmakers introduce bills designed to provide ethanol greenhouse gas emission updates and to expand E15 availability. (DTN file photo by Nick Scalise)

OMAHA (DTN) — More than a decade has passed since the EPA updated ethanol’s greenhouse gas emissions profile in the Renewable Fuel Standard, and now members of Congress are taking steps to require the agency to use the latest science.

Biofuels industry representatives have for years requested EPA update its modeling to reflect technological advancements in the industry. With a number of climate initiatives underway in the federal government, updating that GHG profile is important to securing biofuels’ place in an overall GHG reduction strategy.

Corn ethanol’s GHG lifecycle is important, because if the fuel is found to be more carbon-friendly than EPA originally believed, then ethanol has the potential to qualify as an advanced biofuel in the RFS. This would mean more corn ethanol could qualify for the RFS above the 15-billion-gallon cap.

EXPANDING ROLE OF ETHANOL

On Wednesday, co-chairmen of the Biofuels Caucus Rep. Cindy Axne, D-Iowa, and Rep. Rodney Davis, R-Ill., in the United States House of Representatives offered two bills aimed at expanding the role of ethanol in transportation fuels.

The Adopt GREET Act sponsored by Rep. Dusty Johnson, R-S.D., would require the EPA to adopt the Greenhouse gases, Regulated Emissions, and Energy use in Technologies model within 90 days and then update it every five years. The Adopt GREET Act has companion legislation, which was introduced in the U.S. Senate by Sens. John Thune, R-S.D.; Amy Klobuchar, D-Minn.; Joni Ernst, R-Iowa; and Charles Grassley, R-Iowa.

The GREET model is considered the gold standard developed at the renowned Argonne National Laboratory.

EPA last updated ethanol’s GHG profile in 2010, showing biofuel reduces emissions by 21% compared to gasoline, including indirect land-use change.

The GREET model, however, shows corn ethanol from an average dry mill plant reduces GHG emissions by at least 34% compared to gasoline, even with indirect land-use change.

Indirect land-use change largely has been disproven in recent years, meaning corn ethanol’s GHG reduction profile may be even larger. ILUC is a theory that expanded ethanol production in the U.S., which leads to farmers in other countries replacing food crops with corn for biofuels production.

In addition, the Biofuels Caucus on Wednesday introduced the Renewable Fuel Infrastructure Investment and Market Expansion Act.

INFRASTRUCTURE GRANTS, HIGHER ETHANOL BLENDS

The bill would authorize $500 million in the next five years for infrastructure grants for fuel retailers. The bill also would direct the EPA administrator to finalize a proposed rule to repeal E15 labeling requirements and to allow higher ethanol blends to be stored in existing underground storage tanks.

Industry officials say a number of infrastructure changes are needed to expand the E15 market.

When it comes to the GREET model, in 2016, EPA’s Office of the Inspector General found in a study the agency believes it is keeping up with the latest science on ethanol. (https://www.dtnpf.com/…)

The industry contends EPA continues to penalize ethanol even though advancements in agriculture and ethanol technology have improved its greenhouse gas profile.

The OIG’s report came about as a result of a Congressional inquiry into the RFS. In 2010, EPA completed a lifecycle analysis to determine greenhouse gas reduction thresholds for the RFS. Though the agency was not required to do so, EPA committed to update the analysis as “lifecycle science evolves.”

The OIG said the agency does not have a process for initiating such an update, and EPA’s Office of Air and Radiation said it has no plans to update the 2010 lifecycle analysis.

The OIG said because grandfathered ethanol plants are not required to meet GHG thresholds, there was no need for EPA to update the analysis.

In response to the OIG report, the EPA Office of Air and Radiation disagreed it needs to update ethanol’s GHG emissions profile.

“As the second-largest ethanol producing state, Nebraska is already a leader in providing America and the world with clean, renewable fuel,” Rep. Adrian Smith, R-Neb., said. “Ensuring EPA’s models accurately reflect ethanol’s environmental benefits and improving access to this fuel at the pump will help even more consumers choose this American energy source.”

REACTION TO LEGISLATION

Both pieces of legislation are supported by the National Corn Growers Association, the Renewable Fuels Association, the American Coalition for Ethanol, Growth Energy and Poet LLC.

“Both the Adopt GREET Act and the Renewable Fuel Infrastructure Investment and Market Expansion Act encourage nationwide use of biofuels like ethanol and promote their proven environmental benefits as Congress and the Administration find ways to immediately decarbonize the transportation sector,” said Emily Skor, chief executive officer of Growth Energy.

“The bicameral and bipartisan support of each bill underscores the shared sentiment that biofuels’ role in reducing carbon emissions remains critical to some of today’s climate change challenges.”

Geoff Cooper, president and chief executive officer of the Renewable Fuels Association, said the time has passed for EPA to update ethanol’s GHG record.

“For more than a decade, EPA’s analysis of ethanol’s carbon footprint has relied on speculative theories and obsolete data,” he said.

“The Argonne National Laboratory’s GREET model is recognized globally as the gold standard for analyzing the lifecycle greenhouse gas impacts of low-carbon renewable fuels like ethanol, and the model is regularly updated to reflect efficiency improvements and technological advancements in the fuel production process.

Brian Jennings, chief executive officer of the American Coalition for Ethanol, said carbon-reduction goals can only be met if ethanol is part of the picture.

“While electric vehicles continue to dominate the headlines, experts conclude EVs alone will fail to reach President Biden’s goal of net-zero emissions in the U.S. by 2050,” Jennings said.

“That increased use of biofuels will be required to help address the emissions gap. A recent study by Harvard validates what ACE has been saying for years; today’s corn ethanol is nearly 50% cleaner than gasoline. This vital legislation with both bicameral and bipartisan backing would ensure infrastructure parity for biofuels and EVs and help ethanol continue to be part of the solution to climate change.”

Todd Neeley can be reached at todd.neeley@dtn.com

How the Oil Lobby Learned to Love Carbon Taxes

The American Petroleum Institute may come out in favor of a carbon price, a sign of Washington’s dramatic move toward climate-friendly policy.

Few saw the surprise disclosure earlier this week that the American Petroleum Institute is considering endorsing a price on carbon dioxide emissions and thought the fierce fossil fuel lobby was suddenly becoming climate-friendly. Rather, seasoned industry-watchers say it’s the clearest sign yet that fossil fuel companies see Washington’s shift on climate policy as a real and significant threat.

A carbon price—whether in the form of an emissions trading scheme or a tax on planet-warming pollution—seems antithetical to the fossil fuel industry’s interests, as it would effectively make their core product more expensive for consumers. Large oil and gas companies are likely worried that any other potential action from the Biden administration would be worse for them, said Joe Aldy, a public policy professor at the Harvard Kennedy School who previously served as a special assistant to former President Barack Obama. “They think the alternative climate policy may be a lot of regulations they would view as burdensome and inefficient.”

But the policy itself has a number of silver linings for polluters. For starters, unlike regulations restricting drilling or mandating clean energy, a carbon tax wouldn’t bar companies from extracting natural gas or force the fossil fuel out of the nation’s electricity mix. It could also drive investments in direct-air carbon capture and other technologies that would prolong the use of fossil fuels as a power source.

In the short run, putting a price on greenhouse gas emissions could give natural gas an even greater edge over dirtier-burning coal.

“All of the oil majors have natural gas assets they are trying to protect, and this is a way to do that,” said Mike McKenna, a former deputy director of the White House Office of Legislative Affairs. “Once they became natural gas companies and started competing in the electricity space, it was just a matter of time till they wanted to rub coal out.”

Megan Bloomgren, senior vice president of communications at API, said in a statement that the industry is “evolving,” and that API is “focused on supporting a new U.S. contribution to the global Paris agreement.”

A carbon tax has long been a favorite tool of economists, who say it’s a simple, efficient way to discourage emissions and ensure that the negative costs of climate change are embedded in the price of carbon-intensive products, from gasoline to cement. Right now, “we all pay the cost” of greenhouse gas emissions, special presidential envoy for climate John Kerry wrote in an op-ed last November. But a carbon price would put the onus on the ones doing the emitting, spurring companies and consumers to reduce their output, Kerry said. Years before she became Biden’s treasury secretary, former Federal Reserve Chair Janet Yellen dubbed a carbon tax “the textbook solution to the problem of climate change.”

It’s also a favored tool of the business community. Scores of companies, including solar developers and operators of nuclear power plants, have backed a plan to tax carbon dioxide and distribute revenue to consumers, including giants such as Exelon Corp. and First Solar Inc. The Chamber of Commerce and Business Roundtable have made their own pivots on the issue, attracted by the promise of a consistent policy that wouldn’t shift with each election cycle.

But many environmentalists are deeply skeptical of working with the fossil fuel industry on anything. They suspect there are catches to oil companies’ support—including, for example, demands that a carbon tax be paired with environmental deregulation.

Kathy Mulvey, the accountability campaign director for the Climate and Energy Program at the Union of Concerned Scientists, said API has a long history of disinformation when it comes to climate change that undermines its credibility on the issue. In 1998, the lobbying group coordinated a media campaign to highlight “uncertainties” in climate science, then waged war against the last carbon-pricing scheme to gain traction in Congress, the Waxman-Markey cap-and-trade bill, which died in the Senate in 2010.

“After decades of deception that have delayed action and exacerbated the climate crisis, API doesn’t get to set a ceiling on the scope and ambition of U.S. climate policies,” Mulvey said.

The concerns on the environmental side appear to have a solid foundation. The carbon tax-and-dividend plan that has emerged as businesses’ favored model in Washington, for example, would also preempt regulations governing carbon dioxide emissions from power plants and other industrial facilities. That horse trade is seen as an essential ingredient to retaining business support and luring Republican votes, but it’s anathema to many Democrats who want a belt-and-suspenders approach to climate regulation.

The shift in attitude among oil and gas companies came as majors in the industry began making investments in electric vehicles, natural gas, and renewable energy, which stand to benefit from a carbon price. Exxon Mobil Corp. endorsed a revenue-neutral carbon tax in 2009, and has already devoted lobbying dollars to the current push for legislation; so have ConocoPhillipsBP Plc and Royal Dutch Shell Plc. The policy could even give them a competitive advantage against smaller, independent oil producers and refiners—many of which are also API members—whose sole products are emissions-intensive fossil fuels, a situation that could cause tension in the ranks.

Supporting a carbon price would also give API and its members political cover from increasingly aggressive shareholders determined to ensure that oil companies’ ambitious carbon-cutting plans aren’t contradicted by their lobbying efforts. API has consistently opposed subsidies for EVs, which represent a threat to gasoline demand. Under the Trump administration, the group supported rolling back regulations directly limiting emissions of methane, a potent heat-trapping gas.

API changed tacks on methane in January, saying that it was willing to work with the Biden administration on replacement rules. Not long after, Total Corp. announced it wouldn’t renew its API membership, citing the group’s lobbying positions and its support of candidates opposed to U.S. participation in the Paris climate agreement. Activists are now pressuring BP and Royal Dutch Shell—both of which have made pledges to reach net-zero emissions by 2050—to pull out of API, as well.

A carbon tax would be difficult to enact in any political environment—many lawmakers still have battle scars from the 1993 debate over a heat energy tax blamed for helping Republicans take control of the House a year later. But it’s especially tricky now given the closely divided Senate and concerns about imposing new energy costs on a pandemic-ravaged economy.

Oil industry support could help change the calculus on Capitol Hill. Some more centrist Republicans—including Senators Lisa Murkowski of Alaska and Mitt Romney of Utah—have indicated they are open to the idea. Even some lawmakers from coal-rich states, such as Democratic Senator Joe Manchin of West Virginia, have kept the door open to a carbon tax that could dole money to mining towns planning a new future beyond fossil fuels.

API leaders and members are discussing a possible statement endorsing an economy-wide price on carbon this week, with a formal vote by the group potentially late this month.

Aldy warned that if policy-watchers want a real sense of a carbon price’s potential future, they should pay attention to how far oil companies are actually willing to go to make it happen. “The real question is not whether they issue a statement saying they support it, but do they actually start throwing political capital behind it?” he said. “Do they make it possible for moderate Republicans to support this?”

Oil Refiner Valero to Disclose Climate Lobbying After Criticism

Valero Energy Corp., one of the largest U.S. oil refiners, is planning to publish details of its climate lobbying activities after an investor pressed the company for more disclosure.

Valero will release a report later this year, it said in an emailed statement Wednesday. The decision follows discussions with Mercy Investment Services Inc., which had filed a proposed shareholder resolution demanding to know how Valero’s lobbying aligns with global efforts to fight climate change. That resolution has now been withdrawn, Valero said.

It’s one of the first times a U.S. energy company has backed down and agreed to improve transparency over lobbying and the environment. Multiple industries are facing similar pressure to disclose how their political activities align with the 2015 Paris climate accord.

U.S. regulators last month denied a requestby Exxon Mobil Corp. to block a similar shareholder resolution filed by both Mercy Investment and BNP Paribas Asset Management. Investors will now vote on the resolution at Exxon’s annual meeting in May

Mercy Investment, which manages the financial resources of the Sisters of Mercy, argued that Valero hadn’t provided enough information to help investors understand whether its direct lobbying activities, or indirect lobbying through trade associations, are in accord with the Paris goals.

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Valero already discloses direct and indirect lobbying expenditures, but the company’s policies don’t appear to require regular board oversight, Mercy Investment said in the resolution that’s now been withdrawn.

Some European energy companies have already taken steps on the issue. In January, Total SE said it will withdraw from the American Petroleum Institute after it found the group’s climate positions weren’t fully in line with the company’s climate stance. Last year, BP plc left three U.S.-based industry groups — American Fuel and Petrochemical Manufacturers, Western States Petroleum Association and Western Energy Alliance — after finding their climate-related policies and activities weren’t aligned with its own position.

“We hope Valero will be moving in the direction of European energy companies,” said Mary Minette, director of shareholder advocacy at Mercy.

Granholm vs. GOP on lost fossil fuel jobs. Who’s right?

Energy Secretary Jennifer Granholm yesterday sought to dispel fears that a push for clean energy would jeopardize jobs as conservatives questioned the administration’s plan to tackle climate change.

At both a virtual conference for oil and gas executives and on ABC’s show “The View,” Granholm insisted there will be opportunities for workers as a result of a transition to low-carbon energy.

“There are so many jobs in this clean energy space that have skills that are commensurate with the skills that they used in previous jobs,” Granholm said as “The View” co-host Meghan McCain asked her what she’d say to worried workers. “We should be able to put people to work doing things that are similar to the skills they had.”

Earlier, Granholm told a conference audience at CERAWeek by IHS Markit that the drive to a net-zero economy by 2050 will create a “heck of an economic opportunity.” Appealing directly to oil, gas and coal sectors, she said “it would be great to have partners in making it a successful transition.”

The administration has faced criticism that its emphasis on green energy could cause job upheaval.

Earlier this year, White House climate envoy John Kerry spurred attacks from Republican lawmakers like Sen. Tom Cotton (R-Ark) when he suggested that oil and gas workers could turn to making solar panels. The comments also prompted a two-Pinocchio rating from a fact-checker in The Washington Post

Yesterday, Meghan McCain, the daughter of the late John McCain, brought up Kerry’s remarks and added that she thought Biden, too, “was a little tone-deaf when he told coal miners who will lose their jobs to simply ‘learn to code.'” Biden made the comments on the campaign trail in 2019.

Unions have noted that coal, oil and gas workers can make as much as $80,000 or $100,000 per year, with overtime. By contrast, the average solar installation job paid $45,000 a year in 2019, a bit less than the average salary for wind energy technicians, according to the Bureau of Labor Statistics.

The American Petroleum Institute also wrote on Twitter yesterday that while Granholm is a “way better messenger” than Kerry, “it’s weird how Admin surrogates can just casually promise to create millions of jobs & it’s simply accepted at face value.”

At CERAWeek, Granholm vowed that a move to low-carbon energy would bring “millions of jobs — union jobs, with good pay and good benefits for all.

“By scaling up these emerging technologies, we’re going to put people in construction, skilled trades, and engineering to work building a new American energy economy, and help those in the coal, oil, and gas industries translate their skills to new clean energy jobs,” she said.

She offered some alternatives, suggesting oil and gas workers could work on geothermal energy and coal workers could engage in the recovery of critical minerals used in batteries. She said there would also be work for electricians in installing electric vehicle charging stations and for workers in capturing methane, a powerful greenhouse gas.

Granholm, who was governor of Michigan as the state and auto industry were hammered by recession, added she wasn’t going to “sugarcoat how hard transitions are.”

“The bottom line is this particular growth of clean energy and reduction of carbon provides a huge opportunity and I’m extending a hand of partnership,” she said.

She noted Michigan’s auto industry turned out cars powered by fossil fuels, even as it began to see more demand for fuel efficient vehicles. But, she said, it wasn’t until the industry cratered that it began to embrace alternatives.

“We wanted to be the place that built that opportunity,” she said, adding that one-third of all North American electric battery production now takes place in the state. “In times where the market is raising its hand and saying, ‘We’re heading in a direction, you better come along or you’re going to be left behind,’ maybe we should listen.”

The department’s new Office of Energy Jobs will work with the department’s fossil fuel division to “ensure we leave no worker behind,” she said.

Reporter Carlos Anchondo contributed.

Biofuel supported bills introduced on Capitol Hill

House climate proposal includes RFS integrity provisions and Adopt GREET Act recognizes ethanol’s improved environmental benefits.

US capitol building in Washington DC against bright blue sky

Legislators are looking to expand access and acceptance of biofuels with the introduction of several bills this week on Capitol Hill.

On Wednesday, Rep. Dusty Johnson, R-S.D., introduced the Adopt GREET Act, a bill which would require the U.S. Environmental Protection Agency to update its greenhouse gas modeling for ethanol and biodiesel to more accurately reflect the environmental benefits of agriculture and biofuels. The GREET model is a tool which examines the lifecycle impacts of vehicle technologies, fuels, products, and energy systems.

“It’s time for the bureaucracy to catch up to science,” says Johnson. “We know biofuels are an integral part of protecting our environment and building up our economies in rural America. Including the entire lifecycle from a farmer’s field to the fuel pump will allow consumers across this country, and the world, to better understand the benefits biofuels offer.”

Specifically, this bill would require the EPA to adopt the Argonne National Lab’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model for both ethanol and biodiesel. EPA would also be required to update its modeling every five years or report to Congress to affirm its modeling is current or otherwise explain why no updates were made.

Johnson introduced this bill with fellow Biofuels Caucus Co-Chairs Reps. Rodney Davis, R-Ill., Mark Pocan, D-Wisc., Adrian Smith, R-Neb., and Angie Craig, D-Minn. The Senate companion, S. 193, is led by Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn.

This bipartisan, bicameral bill is also supported by POET, South Dakota Corn Growers Association, Growth Energy, American Coalition for Ethanol, National Corn Growers Association and the Renewable Fuels Association.

Expanding access to higher blends

Additionally, Johnson along with Reps. Cindy Axne, D-Iowa, and Davis led the introduction of the Renewable Fuels Infrastructure Investment and Market Expansion Act, which would expand access to higher blends of biofuels.

“Both the Adopt GREET Act and the Renewable Fuel Infrastructure Investment and Market Expansion Act encourage nationwide use of biofuels like ethanol and promote their proven environmental benefits as Congress and the Administration find ways to immediately decarbonize the transportation sector,” says Emily Skor, CEO of Growth Energy. “The bicameral and bipartisan support of each bill underscores the shared sentiment that biofuels’ role in reducing carbon emissions remains critical to some of today’s climate change challenges.”

“For more than a decade, EPA’s analysis of ethanol’s carbon footprint has relied on speculative theories and obsolete data,” says RFA President and CEO Geoff Cooper. “The legislation introduced today led by Congressman Johnson and the House Biofuels co-chairs will help ensure EPA’s renewable fuel regulations are based on sound science and current data. The Argonne National Laboratory’s GREET model is recognized globally as the gold standard for analyzing the lifecycle greenhouse gas impacts of low-carbon renewable fuels like ethanol, and the model is regularly updated to reflect efficiency improvements and technological advancements in the fuel production process. It’s time for EPA to replace its flawed analysis with the current GREET model, and this bill would bring scientific integrity and accuracy to the agency’s regulatory actions on renewable fuels.”

CLEAN Future Act

House Democrats introduced comprehensive legislation Tuesday to achieve net zero emissions no later than 2050 and included specific measures welcomed by the renewable fuels sector.

The CLEAN Future Act includes the text of the RFS Integrity Act, legislation introduced by Craig and Johnson, which would bring more certainty into the renewable fuel marketplace by setting an annual deadline of June 1st for oil refineries to submit small refinery exemption (SRE) petitions and requiring public disclosures for facilities seeking small refinery exemptions.

It also includes text of legislation to reduce delays at the EPA in approving advanced and cellulosic biofuel production pathways under the Renewable Fuel Standard.

“The inclusion of biofuels in the CLEAN Future Act is a nod to their effectiveness in our country’s climate efforts and their critical role in decarbonizing the transportation sector,” says Skor.

Cooper adds, “The RFS-related provisions in the CLEAN Future Act draft take a step toward maximizing the program’s ability to drive innovation and reduce GHG emissions, but more work remains to be done to fully capitalize on ethanol’s potential to fight climate change.”

As the Energy and Commerce Committee continues to discuss and refine the CLEAN Future Act, Cooper says RFA will continue to promote the climate and environmental justice benefits that renewable fuels bring to the table.

“We look forward to continuing our engagement and interaction with the Committee and other members of Congress as the next steps are taken toward addressing carbon emissions from the transportation sector,” he says. “In particular, we are eager to discuss the importance of fuel- and vehicle-neutral carbon performance standards that can aggressively and immediately reduce GHG emissions from the transportation sector.”

How Farmers Could Fight Climate Change (and Make a Profit)

Carbon markets for agriculture are an idea whose time has come.

Green in more ways than one.

Green in more ways than one. Photographer: Daniel Acker/Bloomberg

Agriculture has never been a principal focus of efforts to reduce greenhouse gases. But farm emissions — which make up about 10% of the U.S. total — are coming under increasing scrutiny as Democrats take the reins of agricultural policy and farmers themselves awaken to the threats of climate change. One strategy in particular is getting attention this year: encouraging farmers to view emissions reduction and carbon sequestration as potential sources of income.

The idea is fairly straightforward. Farmers would take steps to reduce their carbon output, such as reducing tillage to avoid releasing soil carbon, planting cover crops to hold carbon in the soil, applying manure treatments and “digesters” to limit emissions of methane, and using nitrogen fertilizer more precisely to lower nitrous-oxide emissions. In return, they could sell credits to companies looking to reduce their own climate footprint. Private markets for such credits are already springing up, and Congress took measures to encourage similar exchanges in the 2008 Farm Bill.

But much about this concept has yet to be worked out, notably the basic question of how to measure the climate value of various farming practices. Here the U.S. Department of Agriculture could help. A Senate bill introduced last year would direct the USDA to create standards for measuring the effectiveness of climate-protection measures on farms, certify people to help farmers take such measurements and verify their value, and work with the Environmental Protection Agency to monitor private carbon-credit markets.

Such exchanges could go a long way toward encouraging farmers to reduce emissions and sequester carbon. But they won’t work unless regulators can ensure that they’ll actually bring substantial climate benefits. The danger is that a carbon-credit system might instead mainly enable airlines, investment funds, energy firms, agribusinesses and other companies to excuse their own greenhouse-gas emissions by purchasing inexpensive and largely meaningless offsets.

By setting standards for measurement and verification, and monitoring the private markets, the USDA can maximize the potential of “carbon farming.” It can also extend the benefits beyond the big operations, which can most easily demonstrate emissions reductions, to smaller farms — by helping them participate in collective efforts. If such measurements proved reliable, the Biden administration’s proposal to create a government “carbon bank” — which would buy credits from farmers for a guaranteed price per ton — might act as a powerful incentive for farmers big and small.

Carbon credits won’t be enough on their own; they should be thought of as a complement to other efforts to encourage climate-friendly agriculture, including existing USDA programs that help farmers finance conservation efforts (which also improve soil health and crop yields), and Energy Department research on soil carbon capture. Congress should also make possible improved terms on loans and reduced premiums on crop insurance for farmers who limit emissions (and water pollution) and conserve carbon.

That said, carbon trading does hold significant promise for limiting emissions on the farm — so long as it’s based on verifiable practices that will allow markets to accurately value the credits. The first step is to get the right data.

To contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at davidshipley@bloomberg.net .

EVs Could Make Dealerships a Thing of the Past, Too

When cars don’t need repairs or in-person updates, it changes the whole sales model.

There’s auto news out of Sweden: Volvo Cars says that it will be fully electric by 2030. No more internal combustion, no more hybrids. It’s batteries or bust.

In making this commitment, Volvo is betting on a trend: that as EVs are becoming cheaper and new conventional cars are being priced higher, consumers’ math on electric-versus-internal combustion will soon come out in electrics’ favor.

But there’s more to Volvo’s position on EVs than just changing the powertrain. The carmaker says its pure electric models will only be available for sale online, and that its first fully electric car is now receiving over-the-air software updates. (Tesla has been doing this for years.) That first plan has implications for the built environment; the second, for emissions and the global climate.

I’ve talked before about what increasing electrification means for the gas station, an icon of the American landscape. There are more than 100,000 of them, they employ more than 900,000 people, and not all of them will survive a world with many more electric vehicles. We can apply that same lens to the auto dealer landscape — and when we do, the numbers are even bigger.

There are almost 118,000 car and parts dealers in the U.S. — fewer now than before the global financial crisis, but more than the low in 2011.

Those dealerships employ nearly 2 million people — more than twice as many as filling stations employ — after a dramatic drop-and-recovery in 2020. Prior to Covid-19, that number was at an all-time high after rising for nearly a decade.

Back on Track

More than half of those employees work in sales, and another 30% are technicians and mechanics. That’s a different distribution than gas stations, where almost everyone works as a clerk or prepares food, and it also gives an indication of what’s at stake for dealers with electrification.

Volvo says that its retail partners will still take part in “selling, preparing, delivering, and servicing cars,” but that it “will radically simplify the process for, and reduce the number of steps involved in, signing up for an electric Volvo.” Just about anyone reading that would bet that means fewer people involved, too.

A digital sales channel changes not only the number of people needed to sell a car, but also the nature of their jobs and where they work. It means no one waiting in a showroom for people to drop in, no office managers, no janitors. EVs also have far fewer moving parts than internal combustion engine vehicles, and therefore are far less likely to need the same level of service. That’s part of the logic behind a Michigan bill that would have banned privately held electric vehicle companies from selling directly to consumers. (The bill died quietly at the end of last year.)

And then there are the updates. Modern cars contain dozens of software-embedded electronic-control units, i.e. the sort of things that could be updated over-the-air. Cars that can be remotely updated aren’t driving pointless miles to fix something that actually prevents them from being safely driven. That could also help cut down on costly recalls — last year, Toyota recalled 2.9 million cars in January for an issue with one of its electronic-control units.

But perhaps more important than avoiding millions of miles of driving for recalls — and therefore millions of miles worth of unnecessary emissions — is the promise of vehicles that improve over time. Here again, Tesla is setting the standard, doing not just over-the-air updates but also upgrades. These aren’t just patches or fixes; they’re permanent enhancements, which will keep cars on the road longer with — you guessed it — less maintenance. That’s another blow to dealers, but a boon to consumers, and to the climate.

Nathaniel Bullard is a BloombergNEF analyst who writes the Sparklines newsletter about the global transition to renewable energy.

House climate bill would uncover refinery waivers

The biofuel industry claimed a big win from climate legislation introduced by House Democrats, after the bill’s writers included language to reveal which companies EPA allows to skirt biofuel-blending requirements.

The “CLEAN Future Act,” proposed by Chairman Frank Pallone (D-N.J.) and other Democrats on the Energy and Commerce Committee, would end EPA’s practice of withholding names of companies that receive small-refinery exemptions under the renewable fuel standard.

Secrecy behind the exemptions — which grew dramatically in number during the Trump administration — has been a major sore point for the ethanol industry, which complains that some of the biggest, thriving petroleum companies have been able to receive them.

The waivers are reserved for refineries that would face economic harm if forced to comply with RFS requirements, but a struggling refinery that’s part of a company with big profits could conceivably fit the definition.

The climate bill contains other language promoting biofuel interests, including setting June 1 each year as a deadline for refineries to submit waiver petitions, which groups say would allow EPA to account for them in setting annual biofuel-blending requirements.

The bill’s authors included the text of a measure called the “RFS Integrity Act,” by Reps. Angie Craig (D-Minn.) and Dusty Johnson (R-S.D.), which includes the small refinery language. The legislation also includes a requirement that EPA disclose the number of gallons of biofuel exempted for refineries requesting waivers.

“The inclusion of biofuels in the CLEAN Future Act is a nod to their effectiveness in our country’s climate efforts and their critical role in decarbonizing the transportation sector,” said Emily Skor, CEO of Growth Energy, in a statement.

Biofuels’ inclusion reflects that industry’s position that ethanol, biodiesel and similar products are an environmentally friendly alternative to petroleum and deserve to play a big role in reducing carbon emissions.

But plenty of critics take a different view, warning that biofuel production involves its own environmental risks such as converting land from grasses to a more intensive crop like corn that requires fertilizer and pesticides.

The petroleum industry has fought to protect RFS exemptions and says companies shouldn’t have to reveal confidential business information when they apply for them. In some cases, petroleum industry groups say, the cost of renewable fuel credits to meet RFS mandates is a top expense at a refinery, rivaling labor.

The industry continues to oppose further requirements for transparency in the small refinery waivers, in light of recent decisions at EPA to report regularly on how many waivers are requested, granted and denied annually, said the American Fuel and Petrochemical Manufacturers, an industry group. The agency updates the information on its website regularly.

“EPA has already appropriately enhanced its process to be transparent about the number of small refinery relief petitions it receives. AFPM opposes provisions intended to chill companies seeking needed regulatory relief,” said Geoff Moody, AFPM vice president of government relations, in a statement to E&E News.

The climate bill also includes a provision requiring EPA to act on petitions for new “pathways” under the RFS — such as new uses for biofuel feedstocks — if 90 days or more have passed since a related petition was submitted to the agency.

In other biofuel developments, lawmakers introduced bills yesterday to expand access to higher-ethanol blends and to direct EPA to update its greenhouse gas modeling on ethanol and biodiesel.

The higher-blend bill, by Reps. Cindy Axne (D-Iowa) and Rodney Davis (R-Ill.), is called the “Renewable Fuels Infrastructure Investment and Market Expansion Act.” The greenhouse gas modeling bill, by Johnson, is called the “Adopt GREET Act.”

The higher-blends bill is a companion to Senate legislation, S. 227, by Sens. Amy Klobuchar (D-Minn.) and Joni Ernst (R-Iowa).

The House “Adopt GREET Act” is a companion to a bill, S. 193, by Sens. John Thune (R-S.D.) and Klobuchar.

Biden faces steep challenges to reach renewable energy goals

PORTLAND, Maine (AP) — President Joe Biden wants to change the way the U.S. uses energy by expanding renewables, but he will need to navigate a host of challenges — including the coronavirus pandemic and restoring hundreds of thousands of lost jobs — to get it done.

The wind and solar industries have managed to grow despite a less-than-supportive Trump administration, which favored fossil fuels such as coal. They have a new ally in the White House in Biden, who has set a goal of 100% renewable energy in the power sector by 2035. Now comes the hard part — making it happen.

Disruption from the pandemic has cost the renewable energy industry, which relies heavily on labor, about 450,000 jobs. The pandemic has also made it more difficult to build wind and solar infrastructure and has redirected federal resources away from the energy sector. There’s the additional challenge of getting pro-environment legislation through a deeply divided U.S. Senate where Democrats hold the narrowest margin possible and have some key members in fossil fuel states.

To reach Biden’s 100% renewable energy goal will require a massive buildout of grid infrastructure to get energy from the windy plains or offshore wind farms over long distances to cities where electricity is needed. About a sixth of today’s U.S. electricity generation is from renewable sources, the U.S. Energy Information Administration has said.

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Michael Mann, an American climatologist and geophysicist who directs the Earth System Science Center at Pennsylvania State University, said Biden “campaigned on and has a mandate to act on climate,” and that boosts his prospects of getting tough changes through. However, he said, it’s going to be a fight, and compromises will need to be made.

“We must recognize that Green New Deal-like legislation probably cannot pass in a divided Congress and climate advocates may need to make some concessions if we are to see climate legislation in the U.S. over the next couple years,” Mann said.

Still, the industry is optimistic Biden’s ambitious goal can be reached.

“It’s doable, but it won’t be easy,” said Larry Gasteiger, executive director of WIRES, the transmission industry trade group.

It takes about a decade to get transmission lines planned, sited and built, he said, so 2035 “may sound like it’s a ways off, but it’s really not when you think about all of the infrastructure that’s going to need to be built.”

It could cost $30 billion to $90 billion over the next decade to build the transmission infrastructure necessary to connect all the new generation resources and maintain reliability, according to WIRES.

Biden’s presidency — along with the rise of Democrats in the Senate — is widely viewed as a potential boon to a renewables industry that’s already growing, despite the Trump administration’s focus on fossil fuels and the pandemic’s challenges to new utility-scale operations. Last year was a record year for wind and solar power installations.

Some state-level politicians, such as Democratic Maine Gov. Janet Mills, started making moves in favor of offshore wind around the time of Biden’s victory. Mills announced in November that the state is planning to help develop the first floating offshore wind research farm in U.S. history.

And the federal Bureau of Ocean Energy Management announced on Feb. 3 that it’s resuming an environmental review of a proposed offshore wind project off Martha’s Vineyard in Massachusetts. BOEM Director Amanda Lefton said offshore wind “has the potential to help our nation combat climate change, improve resilience through reliable power and spur economic development to create good-paying jobs.”

The Biden administration is in a position to accelerate trends toward renewable energy and away from fossil fuel power, said Dave Reidmiller, a Maine-based scientist who assisted Biden’s transition team in the Office of Science and Technology Policy.

“Utilities and others kind of see the writing on the wall of where this is going,” Reidmiller said. “I suspect it’s no surprise that the Biden administration has fairly ambitious de-carbonization goals for American society.”

The U.S. has just two working offshore wind farms — off Block Island in Rhode Island and off Virginia — but more than two dozen others are in various stages of development. The wind power industry and clean energy advocates say the new administration can make the country an offshore wind power leader.

One way Biden could boost the offshore wind industry would be accelerating permit procedures. Jeff Berman, manager of emissions and clean energy analytics at S&P Global Platts, said that would help encourage growth “of a resource that there isn’t very much of in this country.”

But one of the clean energy industry’s first priorities is to regrow and even expand jobs, said Matthew Davis, legislative director of the League of Conservation Voters.

Estimates of employment in the U.S. clean energy sector range from about 700,000 to 3 million jobs. Biden pledged to create 10 million jobs.

“Biden says we need millions more solar roofs, tens of thousands more wind turbines, getting offshore wind industry off the ground,” Davis said. “It’s doable but aggressive, and we’re going to be pushing right along the administration and our allies in Congress to make this happen.”

Industry representatives also believe Biden’s focus on climate change and new environmental regulations will make wind and solar more competitive by reducing their cost relative to fossil fuels.

East Providence, Rhode Island-based ISM Solar, is planning six to eight new community solar projects in Maine over the next few years, totaling about 30 megawatts — enough to power more than 10,000 homes.

“The more you clamp down on emissions, the more that will help renewables,” said the company’s vice president, Mike Lucini.

Under Biden, the industry is also banking on more certainty about tax credits, which analysts say have been major drivers of renewables growth. Tax credits for wind and solar were extended in the December stimulus bill — with Trump’s approval — and wind and solar interests are hopeful they can rely on long-term extensions in the coming years.

In addition, the industry wants an end of tariffs that cause the U.S. to pay some of the world’s highest equipment prices.

Tariffs on solar components are set to expire in 2022. While it’s unclear if Biden could end those tariffs earlier, Berman of S&P Global Platts said his administration probably won’t extend them — unlike the Trump administration which was looking to increase those tariffs as recently as a few months ago.

In Maine, Dirigo Solar co-founder Bob Cleaves said “there’s no question the Trump tariff on solar panels that we’ve already purchased really slowed down our projects.”

Biden’s administration raised the industry’s hopes with a set of executive actions aimed at tackling climate change on Jan. 27.

“Justice for disadvantaged communities and welcoming legacy energy workers into the clean power workforce are vital aspects of the success of the clean energy transition,” said Heather Zichal, chief executive officer of the American Clean Power Association.

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Bussewitz reported from New York.

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