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CHINA DOMINATES ELECTRIC VEHICLE SALES: We wrote earlier this week of the Chinese energy paradox, reflected in its massive solar deployments. Its hot vehicle market tells the same story of dominance with a different technology.
The International Energy Agency updated its Global EV Outlook report this morning with new estimates showing new EV sales in China were nearly six times higher in 2022 than sales in the United States.
Some key numbers: China’s share of total global sales rose compared to 2021, reaching 60% of total sales globally in 2022.
Europe, where more than one in every five cars sold was electric last year, represented the second largest market.
The United States came in at third, accounting for 8% of global sales. In the U.S., less than a million new battery EVs and plug-in hybrid EVs were sold, compared to nearly 6 million in China.
The numbers show the Biden administration is chasing the Chinese, not only to take over the EV supply chain, but to emulate the strength of EV sales in that country, which according to IEA has already blown past its own 2025 target for new energy vehicle sales.
Biden’s multi-pronged approach: The administration is using a number of avenues to increase new sales from their current levels (~6% of total sales in 2022) to make up half of new sales by 2030.
The new proposed vehicle pollution regulations are another, and still another is its proposed eRIN program under the RFS.
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GOP DEBT CEILING BILL AMENDED TO KEEP BIOFUEL CREDITS: The House Rules Committee approved a Republican amendment to strike language in the Limit, Save, Grow Act that sought to repeal tax credits for carbon sequestration and biofuel production alongside the rest of the Inflation Reduction Act’s clean energy tax credits.
A pair of Midwestern lawmakers representing corn states where ethanol and biofuel production are big, including Republican Rep. Derrick Van Orden of Wisconsin, proposed the changes.
Van Orden’s amendment sought also to keep incentives for nuclear power and sustainable aviation fuel, but the final amendment spared only the 45(Q) carbon capture incentive and the biofuel incentives.
Leadership’s approach was more or less to throw out all the IRA’s energy and climate change-related tax provisions, which passed on a party-line vote, rather than pick and choose what some members deem to be the good items.
Other activity: The committee also advanced the bipartisan joint resolution of disapproval targeting Biden’s solar emergency. The House is expected to take up the measure on Friday.
EPW ADVANCES EPA AIR NOMINEE: The Environment and Public Works Committee advanced the nomination of Joseph Goffman to lead the Environmental Protection Agency’s Office of Air and Radiation.
Goffman, who helped author the Obama-era Clean Power Plan, was put up for the role during the last Congress but his nomination stalled after the vote tied in committee.
Democrats’ bigger margin this Congress, and the return of Sen. John Fetterman from hospitalization, was the difference maker in the 10-9 party-line vote this morning.
E&C REPUBLICANS TARGET EPA’S NOVEL E-RIN PROPOSAL: Republicans on the House Energy and Commerce Committee took aim at the Environmental Protection Agency’s eRIN, proposed as an addition to the Renewable Fuel Standard in December as a way to boost electric vehicles.
Republican members said in a letter to EPA that the proposal strays from congressional intent and that the RFS was not designed to be a “tool to electrify transportation.”
“It could create new economic opportunities for parties that service the electricity distribution sector and certain renewable fuels producers, or it could create regulatory barriers that would negatively impact American companies and complicate consumer’s ability to access the fuels they need for the lives they live,” the members said.
The proposed eRIN program would allow participants to generate eRINs where, for example, qualifying renewable biomass is used to generate electricity and then used as a transportation fuel, whereas RIN generation has been restricted to liquid biofuels during the RFS’s life.
An eRIN program would give participants, such as biomass producers or, potentially, vehicle manufacturers, another regulatory revenue stream.
Hyundai asked EPA to finalize the program to allow manufacturers to generate the credits.
Tesla has also pushed for the finalization of an eRIN program for years and argued in comments to the agency that Congress has “repeatedly endorsed” EPA’s power to implement the eRINs program. For example, Congress appropriated $500,000 in 2020 in order for the agency to process applications to make use of a renewable electricity pathway under the RFS.
The proposal has received pushback from some refinery interests as well, especially small players.
“The RFS essentially already forces merchant and small refiners to subsidize the world’s biggest oil companies through the RIN system. And so, as if that wasn’t bad enough, now the administration wants [small refiners] to subsidize Tesla” with the eRIN program, one industry source, who’s lobbied against the RFS, told Jeremy.
COMER DANGLES SUBPOENA TO GET INFO ON KERRY’S ENVOY ROLE: House Oversight Chairman James Comer is threatening to subpoena the Biden administration to obtain information on John Kerry’s role as climate envoy, especially his negotiations around climate change mitigation with the Chinese government, the Washington Examiner‘s Cami Mondeaux reported.
Comer, in a letter addressed to Secretary of State Antony Blinken, said two information requests issued to Kerry’s office last Congress yielded no response.
The committee is concerned that Kerry occupies a “cabinet-level position that does not require Senate confirmation despite his apparent ability to bind the United States to international agreements.”
Comer’s request is the “final letter” requesting communications and documents, he said, before the committee resorts to compulsion.
The issue marries multiple Republican priorities in investigating the Biden administration’s international climate negotiations and taking it to the Chinese, which they are doing in a new way in their campaign to dismantle the Inflation Reduction Act on the grounds that it subsidizes China and Chinese dominance in the various targeted energy sectors.
Kerry has been negotiating with China as part of his circuit as the White House’s climate diplomat, announcing an agreement with the Chinese to “raise climate ambition.” But China has not backed away from its lighter approach to cutting greenhouse gas emissions.
Coal-fired power capacity is growing at a large scale, and the country’s 2060 net-zero target is a full decade behind the Paris agreement’s timeline.
GROUPS SUE INTERIOR OVER OIL AND GAS PHASEOUT PETITION: Environmental groups sued the Biden administration for not responding to an administrative petition they filed earlier this year requesting the administration put together a plan to phase out oil and gas production on public lands.
The petition, led by Center for Biological Diversity, was filed in January under the Administrative Procedure Act, which allows interested parties to petition for the issuance, amendment, or repeal of a rule.
Plaintiff groups, which also include Wildearth Guardians and Friends of the Earth, argued the Interior Department failed to comply with its regulations for “prompt consideration” of the petition and asked the court to compel the department’s response.
Their petition included a recommended schedule for phasing down production to 50% of its 2020 baseline in 2026. By 2035, the schedule provides for production levels to be only 2% of 2020 levels.
The Biden administration has moved forward with planning and scheduling new lease sales more steadily since the Inflation Reduction Act passed. Lease sales in several states are scheduled to take place next month, and the Bureau of Land Management has begun scoping for Q3 sales.
REPUBLICANS GO AFTER BIDEN’S CLEAN ENERGY TARGETS: The Subcommittee on Environment, Manufacturing, and Critical Materials held a hearing this morning to probe the Biden administration’s clean energy targets, which Republicans argued could threaten human rights and national security.
Republicans used the hearing to push for an “all of the above” energy policy, as opposed to the strict timelines for renewable energy the Biden administration has adopted, arguing that such an abrupt transition will cause the U.S. to rely heavily on China and the Congo for critical minerals and other clean energy development as it builds out its domestic supply chain.
Manhattan Institute senior fellow Mark Mills said renewable resources like wind and solar power have a very low energy density compared to hydrocarbons–occupying “roughly 10 times as much of the Earth’s surface to deliver the same amount of energy to society” – and thus present new challenges for the U.S. as it looks to build out renewable energy at a massive scale. There are also many uncertainties when it comes to waste and how to recycle these materials.
Others pointed out China’s outsized role in the critical minerals space—noting that it processes between 35% and 85% of the world’s supply of copper, nickel, cobalt, and lithium, commanding an outsized share of dominance in this sector compared to other energy sources. (For context, all 13 OPEC members produce a combined 40% of the world’s oil supply.)
CLIMATE ACTIVISTS SHUT DOWN GEORGE WASHINGTON PARKWAY: The climate activist group Declare Emergency took credit this morning for a shutdown of the GW Parkway around 9 a.m. The protestors were reportedly cleared by police by 9:50.
The Rundown
Bloomberg For minivan lovers, there’s only one EV eligible for US tax credits
Financial Times South Korean battery groups’ domination of EV market in US faces China challenge
