Net Zero

1. The end of ‘hard to abate’
2. Nuclear rebuild
3. Fisker’s Hail Mary
4. Nuclear restart
5. Hydrogen head-butting

BlackRock has ‘self-serving pragmatism,’ but loses $13.3 billion.

The end of ‘hard to abate’

The U.S. Department of Energy announced this week it will dole out $6 billion in grants to cut emissions from three dozen factories across a wide range of industries — including steel, cement, aluminum, even whiskey and pasta.

The Biden administration’s climate strategy up to now has focused primarily on cutting emissions from the power and transportation sectors, particularly via wind and solar energy and electric vehicles. The new funding targets heavy industry, which accounts for one-third of the country’s carbon footprint but has seen much slower progress on decarbonization because the technologies involved are mostly new and have rarely been tried at commercial scale.

The combined emissions savings from all 33 projects would be equivalent to taking three million gas-fueled cars off the road, Kelly Cummins, acting director for the DOE’s Office of Clean Energy Demonstrations, told Semafor. And if all goes according to plan, that’s just a down payment on bigger cuts in the future.

“We want to make sure these are not just one-off projects,” she said. “The only way we’re going to meet our long-term climate goals is if we get replication from these demonstration projects.”

It may be time to retire a climate cliché: Emissions from the sectors targeted in this program are sometimes called “hard to abate,” because many industrial processes require high temperatures from burning coal and natural gas that aren’t easily replaced by low-carbon electricity. But research and innovation over the past few years have delivered a range of technological solutions for high-carbon industries. Now, the biggest obstacle is getting factory owners, their customers, and their financiers to take a gamble on bringing those from the lab to commercial scale. The new round of DOE funding is meant to lower the stakes.

Nuclear rebuild

Ukraine is aiming to put nuclear power and renewables at the center of its energy system once it starts to rebuild from Russia’s invasion, energy minister German Galushchenko told reporters this week. Galushchenko hosted a press briefing in the basement of his Kyiv office on Monday after a meeting with his Swedish counterpart, speaking over the clamor of air raid sirens and outgoing defensive missile launches. Over the last week, Russia has carried out its biggest attacks on energy infrastructure of the war so far, Galushchenko said, leaving more than one million Ukrainians without power and knocking out at least one-fifth of the country’s electricity generation capacity.

Rebuilding under fire is extremely difficult, he said, but Ukraine is already speaking to European governments and foreign energy companies about what that might entail. “Because it’s decentralized, renewable energy is very important from the perspective of military strategy,” he said, “but to make the system strong we need baseload generation,” including a mix of fossil fuels and nuclear power. A challenge for Ukraine’s nuclear ambitions is that much of the world’s uranium fuel supply comes from Russia. In the meantime, Galushchenko said, the most important priority for the energy system is restocking its air defense capabilities with the help of the EU and U.S.

Fisker’s Hail Mary

The electric-vehicle startup Fisker slashed prices in a bid to stay afloat after the New York Stock Exchange delisted it over its collapsing share price. The company cut the list price of its highest-end model by 39%, or $24,000, after its stock fell by more than a quarter to below 9 cents a share. Though Fisker suffers from many of the same challenges as other EV rivals — EV growth has been slower than expected, hybrids are mounting significant competition, and Chinese brands are making inroads against U.S. carmakers abroad — it also has two fatal problems: Its car is not very good (the reviewer Marques Brownlee called the Fisker Ocean “the worst car I’ve ever reviewed” in a video with 4.8 million views on YouTube) and it can’t actually sell many, delivering fewer than 5,000 all of last year.

Nuclear restart

Loan announced today by the Biden administration to reopen a shuttered nuclear power plant in Michigan. If completed, the project would be the first U.S. nuclear plant to reopen after being fully closed, a major milestone in the transformation of nuclear power from environmental pariah to climate hero. The plant is expected to produce enough zero-carbon power for 800,000 homes — if its operators can secure a supply of uranium and train hundreds of engineers.

Hydrogen head-butting

Energy companies and NGOs squared off in hearings at the U.S. Treasury Department this week over the fate of tax credits for low-carbon hydrogen. Although the substance of the debate is arcane and highly technical — revolving largely around how to account for the energy used to manufacture hydrogen — it’s one of the most consequential decisions on climate that the Biden administration will need to make. An early iteration of the tax credit rules was far too restrictive, Dan Ammann, president of Exxon’s low-carbon solutions division, told Semafor this week. The company announced on Monday that it’s pursuing a deal with Japan’s largest power company to sell hydrogen-based products from a plant in Texas. But that deal will likely be scuttled, Ammann said, unless Treasury expands the tax credit to go toward hydrogen made from natural gas, provided it can prove to be done with low emissions. “All we’re looking for is a level playing field, and for the credits to reflect the carbon intensity of the hydrogen that we produce,” he said. But meanwhile, other hydrogen producers are perfectly happy with how the credit guidelines are written: “If we can do it, so can others,” Eric Guter, vice president for hydrogen at the chemical company Air Products, testified at the Treasury hearings.

New Energy

• Raylyst Solar, a Czech wholesaler of Chinese solar panels, is Europe’s fastest growing company, according to an analysis by the Financial Times. The company’s growth highlights “China’s dominance of the sector and the failure of local manufacturers to compete,” the FT reported.
• The Biden administration approved plans by Ørsted to build a 1-gigawatt offshore wind farm near Martha’s Vineyard. The project, which could begin supplying power in New York by 2026, is a positive sign for an industry that has been “bogged down by inflation, higher borrowing costs and supply-chain woes,” Bloomberg reported.

Finance

• U.S. investment funds pulled $13.3 billion from BlackRock as part of a campaign to punish the world’s biggest asset manager for insisting that climate change carries financial risk. The figure, however, represents roughly 0.1% of BlackRock’s assets under management, which increased by $138 billion last year.

Politics & Policy

• While at CERAWeek, oil and gas executives disparaged Biden administration regulations on their greenhouse gas emissions and its pause on new gas export permits. Despite the U.S. producing more oil and gas than any other country ever has, industry executives still skew heavily toward the GOP.

EVs

• Top U.S. automakers lose $6,000 on each EV they sell on average, an analysis by consulting firm BCG found. Despite electric car sales increasing by 50% last year, companies across the supply chain have slashed production targets and delayed product launches as a glut sent prices crashing. But according to BCG, as many as 70% of consumers in the U.S. are considering buying an EV, with more than half of them waiting for improvements in range and charging speeds before making their purchase.
• Solid-state batteries for electric cars, a much-hyped technology that could enable greater driving range, remain years away from commercialization, the head of CATL, the biggest EV battery maker, told the Financial Times. Despite progress, the batteries did not work well enough, lacked durability and still had safety problems, the FT reported.

James Vaccaro, executive director of the Climate Safe Lending Network.

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