April 2021 Cleantech Roundup: Policy Blueprints | EV Battery Supply Chain | Do Net Zero Goals Matter?
This month, we highlighted a couple of policy moves that could serve as a blueprint for others, talked a bit more about the EV battery supply chain, and highlighted some human rights issues in the solar supply chain.
Also: charging networks, zero-emission fossil power, and a new media organization rises from GTM’s ashes.
One More Reason the Tour de France doesn’t happen on aircraft
France is moving to ban short-haul domestic flights (which could be served by a train trip of 2.5 hours or less). This is a good example of how attitude and policy changes can lead to dramatic, non-linear changes on the regulatory environment; once implemented, it may also be contagious for other geographies. Hopefully, they will include a sensible exclusion for low emissions aircraft (like electrified flying taxis) in the final version. Link
Washington State Puts a Cap on Carbon
Washington state is on its way to having the most comprehensive climate policy in the United States. The legislatures there recently passed a bill, which would put a cap on carbon emissions, ratcheting down over time to reduce emissions 95% by 2050 (the state had already previously committed to a zero-emissions power sector by 2030 and to eventually electrify buildings).
Of note, this bill includes an escalating price on carbon — a policy that had been debated in the state for the last couple of years but struggled to pass. In our federalist system, states frequently borrow from one another, tweaking things along the way to address issues. This was true here, as this legislation sought to improve on related laws passed in California, and is likely to serve as a blueprint for other states in the future. Link
One Charging Network to Rule them All
As it rolls out new EVs, GM is also creating a charging station network, branded GM Ultium Charge 360, to make owning an EV as easy as possible.
However, unlike some of its competitors, it is opting for partnerships with existing networks rather than its own private infrastructure — this will include the chargers of Blink Charging, ChargePoint, EV Connect, EVgo, FLO, Greenlots, and SemaConnect (all the big players except Volkswagen’s Electrify America). In this model, a GM vehicle owner can have one app and interface that has details and payment information connected to all of the charging partners.
While GM gives up some level of control in this relationship, I think it makes sense — it’s much cheaper than actually building a network from the ground up, and these charging networks are somewhat interchangeable and so won’t have too much leverage on them (presumably enabling the automaker to partner at a reasonable cost). Link
Do New Net Zero Goals Matter?
A report from Moody’s argues that 2050 Net Zero goals matter, even if they don’t have teeth or are vague. The mechanism they cite is that as there continues to be a push towards decarbonization, the credit risk for carbon-intensive industries will increase over time.
This sounds about right to me — If everyone believes 2050 is the date that matters to hit net zero, it doesn’t actually matter much what the forcing mechanism is. It’s a little bit like how inflation expectations can be anchored and have a real impact on inflation. Link
What Does Solar Have to do with Human Rights?
China produces a large portion of polysilicon, a key commodity input of solar panels. Unfortunately, as Bloomberg recently highlighted, there are big questions as to whether the people who work at these production facilities in the Xinjiang region do so willingly.
This has the potential to become a problem for the solar industry in the near future, as US companies need to be careful about tracking their supply chain. The Bloomberg article also has a great series of Sankey diagrams showing where different steps in the solar supply chain take place and how that has changed over time. Link
Trade Resolution = Ample Battery Supply
Battery makers SK Innovation and LG reached a last minute settlement agreement in a trade secrets case (SK Innovation will be paying LG $1.8 billion).
This is fantastic news for the electric vehicle supply chain in the United States. SK Innovation will be supplying a large share of the EV batteries that are not already under contract (with, say, GM or Tesla) — If the settlement had not occurred, it would have created supply challenges for numerous manufacturers, potentially delaying the date they introduce new EV models in the United States. Link
Homebrewing Car Batteries
Ford is thinking about making its own batteries, launching a new battery research facility in Michigan. This comes about 6 months after Ford's leadership said they weren’t going to move in this direction.
While they haven’t made the large capital investments of Tesla or VW (which we discussed last month), they appear to be keeping their options open to make their own batteries if the economics and supply chain considerations push them in that direction (for the time being, they are sourcing their batteries from SK Innovation, mentioned above). Link
Skateboards, Top Hats, and the Future of EV Manufacturing
E&E News has a good read exploring how the new paradigm of skateboard / top hat for EVs may scramble manufacturing, and what it means to be an automaker (more on this “skateboard” / top hat paradigm in the October 2020 Cleantech Roundup). Link
Is Venture Capital Worth It?
Contrary to the popular wisdom that only a small subset of venture funds perform well, a new paper from the National Bureau of Economic Research suggests that half of venture funds outperform their benchmark (stock market returns). Link
Other News
Congrats to Congruent Ventures, who raised a $175 million second fund to make climate tech investments. Congruent Managing Partner Josh Posamentier also sits on Clean Energy Trust’s Investment Committee. Link
For those who were mourning the shutdown of Greentech Media, you didn’t need to mourn long — the media team there was reborn into Canary Media, now part of RMI. Link
Orocobre and Galaxy merge to become the 5th largest lithium producer in the world. Link
The Biden Administration is expected to release updated passenger vehicle fuel economy standards in late July. The question is when they do, will it include a pathway to moving to 100% zero-emission vehicles? Link
Temasek and BlackRock launched the Decarbonization Investment Partnership, which will consist of funds that invest in decarbonization solutions. Link
Zero-emissions natural gas power company Net Power is building a 280MW commercial facility in Illinois (with ADM in Decatur) and another in Colorado. Link
SPACs face new hurdles with incoming regulation from the U.S. Securities and Exchange Commission (SEC)(likely the first of several). Link
Chicago-based Hazel Technologies raised a $70 million Series C. Hazel makes a solution that helps extend the shelf-life of agricultural produce. Link
The Global Cooling Prize awarded $1 million to a pair of new air conditioning designs. Link
The White House warns the United States is falling behind China when it comes to developing clean energy technologies. Link
