September 2021 Cleantech Roundup: Illinois Goes Green | Battery Materials Supply Chain Evolves | What’s the SAF word? | Changing Climate Change Beliefs
This month, we’re highlighting big climate policy news in Illinois, how the battery materials supply chain is evolving, why sustainable aviation fuels may be a Goldilocks solution, and changing beliefs on climate change.
Illinois Commits to 100% Clean Energy
Illinois passed major climate policy in September, the first state in the Midwest to do so. The law will phase out fossil fuels in energy generation, provides additional funding for the construction of renewable energy projects, subsidizes some existing nuclear power plants in the state, and a host of other features.
With the (as-of-yet) lack of federal policy, the focus over the last half decade has been on what could be implemented at the state level. Illinois joins more than a dozen other states that have legislated targets for 100% carbon-free energy, with several others who have put goals in place via executive orders.
Ironically, the lack of federal energy policy activity, combined with the ComEd scandal and the poor economics of the nuclear fleet, helped to add urgency and reshuffle the cards in the state in a manner that paved the way for the passage of this law. Looking to the future, this bill also was explicit in prioritizing equity considerations, which will hopefully lead to a more diverse clean energy workforce in the state.
Battery Supply Chain Sustainability and Resilience
With the surge in new electric vehicle models and sales, there has been a huge amount of activity lately in the battery supply chain — specifically in recycling and reusing rare earth materials. Of note:
- Redwood Materials, a battery cathode supplier that is also getting active on battery materials recycling, signed a deal with Ford to recycle EV batteries
- Battery Resources recently raised $70 million to grow their closed loop battery supply chain
- American Battery Technology Company, a battery recycler and miner of critical materials for battery components, is developing a domestic supply chain for nickel and cobalt, in addition to the lithium it already supplies
- Ford announced an $11 billion investment in new battery supply chain investments with SK Innovation, to develop a battery manufacturing campus in Tennessee called Blue Oval City
To date, China has dominated the EV battery materials supply chain. These new investments will enable manufacturers to have a more circular supply chain, better project costs, and rely less on extractive industries.
As Americans buy more EVs, companies are also looking to source more supply domestically. As the industry scales and matures, it is in a position to make forward-looking new investments — if you are going to spend a bunch of money on a new thing, you’d like that new thing to be compatible with the future, and one aspect of that is more robust and sustainable supply chains.
SAF — A New Acronym to Remember
The Biden administration announced a goal for all flights to use 100% sustainable aviation fuel (SAF) by 2050. This includes a more ambitious interim goal (3B gallons by 2030) than Airlines for America (a trade group for big carriers) announced (2B by 2030), but they’ve since agreed to the new goal. Subsequently, the International Air Transport Association also agreed on a target to be net zero by 2050, in line with the Paris Agreement.
Meanwhile, Shayle Kann, Partner at Energy Impact Partners, pointed out two major U.S. airlines committed to purchase more than a billion dollars each worth of SAF: JetBlue will be buying from SG Preston, while Delta will buy from Aemetis. These follow United Airlines' earlier commitment to purchase 1.5 billion gallons of SAF from Alder Fuels.
What’s going on here? There’s actually an opportunity for industry and policy alignment. Airlines and manufacturers know that SAF is the most practical medium and long term solution to decarbonizing. But it is more expensive than jet fuel today.
The industry is immature and will need to scale dramatically, and there are currently blend limits, but SAF is a drop-in solution that doesn’t require the significant redesigns of aircraft or energy density tradeoffs that hydrogen and batteries would require.
Airlines understand where the world is headed, so they’re willing to buy into the long term vision — doing so allows them to pull up a seat to the table, and influence policy to be more focused on carrots than sticks.
This is a very different calculation than the coal industry made in decades past, where they tended to fight environmental regulation at all costs (and, in the United States, were very successful for many years).
Unlike coal, there aren’t great alternatives to jet fuel today. So, by getting on board now, folks in the industry can also help ensure that federal spending and prioritization is focused on solving the problem the way they would like to do so (swapping out the fuel, as opposed to changing out the plane).
Federal support, along with purchase commitments from airlines, will help the industry to scale up and start to work its way down the cost curve, which will make the airlines’ lives easier in the long run. SAF might just be the Goldilocks solution for flight emissions — just the right amount of new technology adoption.
Mo’ Climate Disasters, Mo’ Belief in Climate Change
There was real movement on Americans’ belief in climate change, ticking up noticeably this year.
The Yale Center on Climate Change Communication (YCCCC) is a treasure trove of information on this subject. One finding is that when climate-related natural disasters happen, the individuals impacted by the disasters are subsequently more likely to believe that climate change is happening.
Importantly, YCCCC also finds that it isn’t folks that were active deniers that suddenly see the light: they are folks who were open to the idea that climate change may well be a thing — they just didn’t think that it would happen in their lifetime or impact them personally. It is this increased salience of the present threats of climate change that appears to be moving the needle.
Other News
Numerous top medical journals banded together to emphasize “The greatest threat to global public health is the continued failure of world leaders to keep the global temperature rise below 1.5C and to restore nature.” Link
Extremely white paint invented at Purdue University could help reduce the need for air conditioning in the future (by painting the roof white, some solar rays reflect off the building). Link
Apple bought Chrysler’s old vehicle testing grounds (hat tip Reilly Brennan at Trucks VC). I wonder why? Link
Our friends over at Elemental Excelerator launched a new venture fund, Earthshot Ventures. Link
And, our friends at Energize Ventures just raised their second fund. Link
Storage developer Fluence announced plans for an IPO. Link
The grid in New Orleans was a mess after Hurricane Ida last month, resulting in terrible conditions and loss of life. Canary Media dove into the backstory of how the local utility helped set the stage for this disaster. Although Entergy is part of the MISO regional transmission organization, it is not well connected. In years past, the utility has focused on spending money on smaller system upgrades, which they didn’t have to put out to bid (i.e. they can allocate the money to their company to build). In the process, they continued to limit the interconnectivity to the larger regional transmission system that could have allowed more power to flow into their territory (but that would have also created more competition and pressure on energy prices in the process). Link
