Net Zero

1. Green on the ballot
2. Not quite two-to-one
3. The cost of tariffs
4. Disappointment ahead?
5. Patent battles

NYC’s traffic plan gets jammed.

Green on the ballot

Elections for the European Parliament this weekend will be a referendum on the EU’s climate leadership. The bloc has long held one of the world’s most aggressive greenhouse gas reduction targets, and accelerated its transition to renewable energy after Russia’s invasion of Ukraine. But with trade tensions and energy costs rising, the Green party, which is currently the parliament’s fourth largest group, could lose a third of its seats, polling suggests. If so, the next few years could set a very different tone on climate. Regulations to curb emissions from the agriculture industry, which were already crumbling against massive farmer protests, will likely vanish. And the bloc could give up on trying to outspend the US Inflation Reduction Act on clean energy. But it seems likely to leave an open door for Chinese clean tech exporters.

Not quite two-to-one

Global public and private investors are putting about $1.79 into clean energy for every dollar they invest in fossil fuels.

That’s about seven cents more than the ratio last year, and puts total global energy investment over $3 trillion for the first time, according to the International Energy Agency. That’s a big change from the 2010s, when fossil fuels were still on top. Although high interest rates are still holding back some renewables projects, “the impact on project economics has been partially offset by easing supply chain pressures and falling prices,” the IEA reported. But the growth is very uneven, mostly concentrated in China and the US — and is still short of what’s needed to be on track for net zero by 2050.

US climate tech can’t thrive without confronting China

A giant wind farm set to be built in Egypt is showcasing how the future of climate tech is increasingly controlled by China.

Infinity Power — by some definitions Africa’s biggest renewables company — has an ambitious target of growing its clean-power portfolio nearly tenfold to 10 gigawatts by 2030. Key to its plan will be the country supplying the turbines to generate that electricity: China.

“For our 2030 goal, basically, we will, to be honest with you, rely on Chinese products,” Mohamed Mansour, Infinity’s chair said in an interview. “What happened in the solar industry — China versus the West — is happening today in a big way in the wind industry. In a big way.”

Turbines from Chinese companies such as Goldwind and Envision aren’t just vastly cheaper than their European rivals, he says; they’re better products, and their manufacturers offer better after-sales service, and are more attentive to African customers.

Infinity’s experience in the renewable energy sector holds a lesson for Western manufacturers of all stripes — but US automakers in particular: The biggest threat they face from Chinese companies isn’t just that their products are cheaper, but that they’re better. And the more they protect themselves from competition in the US, the greater the risk that they never sufficiently improve their own products to compete with China’s on the global stage.

In this episode of Mixed Signals from Semafor Media, presented by Think With Google, Ben and Nayeema dissect the battle brewing between American newsrooms and President Biden, wondering whether the Brits are to blame. Then they call up Richard Linklater, famed director of films including Boyhood, Dazed and Confused and, his latest, Hit Man, to contemplate whether it was Marvel, #MeToo or something else that took sex out of the cinema. Finally, Max opens our eyes and hearts to the world of faith-based news.

Listen wherever you get your podcasts.

Disappointment ahead?

Claudia Sheinbaum swept to power in Mexico’s presidential election on Sunday, a win that could herald a drastic shift in the country’s energy sector. A climate scientist by training — she was part of the United Nations panel of climate scientists that won the 2007 Nobel Peace Prize — Sheinbaum vowed throughout the campaign to ramp up Mexico’s green transition. According to her project, renewables could make up as much as 50% of electricity generation by 2030, when her mandate finishes. However her plans remain unclear, as she also promised to continue building on the agenda of President Andrés Manuel López Obrador, who spent heavily propping up Mexico’s fossil-fuel industry. Billions of dollars in potential nearshoring investments hinge on the country producing enough energy, regardless of its source. But the state’s investment capacity may be limited as Mexico’s government deficit grows, Duncan Wood, the Vice President of the Wilson Center, told Semafor. “For sure Mexico will grow, but it will disappoint,” Wood said.

Clean tech patent wars

The next major battleground over global climate tech will be in patent court.

Tech entrepreneurs routinely obtain patents to protect both the hardware and manufacturing processes they invent. Clean energy is no different. But until recently, the industry was small enough that costly, complex lawsuits to stop IP infringement rarely made sense. That’s changing now that billions of dollars of investment and tax benefits are on the line. A tidal wave of patent lawsuits is coming for the renewable energy and EV industries, said Hilary Preston, vice chair of the law firm Vinson & Elkins.

Preston should know: She’s leading the charge as counsel for the Singapore-based solar manufacturer Maxeon, which filed suit in Texas in April against three of its competitors, alleging that they violated US patents held by Maxeon protecting specific aspects of its solar cell design. In a court filing last week, one defendant, Canadian Solar, argued that Maxeon “has no legal basis for filing this lawsuit” because the two companies’ technologies are “fundamentally different.” Qcells and REC Solar, the other defendants, did not return requests for comment. The Maxeon suits follow several recent IP-related lawsuits involving clean tech companies, including one last week by a German engineering firm against a Texas solar producer, and another this year filed by the geothermal startup Fervo Energy.

All this litigation could have a chilling effect on the clean tech revolution. But Preston believes it will have the opposite impact: “No one enjoys litigation, but when companies know the results of their decades-long R&D efforts will be protected in court, that actually incentivizes more innovation and pushes progress forward,” she said.

New Energy

• US solar panel manufacturing capacity nearly doubled in the first quarter of 2024, reaching 26.6 gigawatts. And it may get another boost moving forward, as the Biden administration reinstates tariffs on imports of panels from some Southeast Asian countries.
• China’s clean tech manufacturing capacity is also continuing to boom far beyond what the global market can absorb, especially in the solar industry, crashing profit margins and export prices.

• Westinghouse is racing to prop up Ukraine’s aging nuclear power fleet, the country’s last bastion for electricity production after nearly all its other power infrastructure has been damaged or destroyed.

Fossil Fuels

• A Dallas billionaire who believes “it’s a whole lot easier, and a whole lot safer, to try to find ways to decarbonize fossil fuels than it is to move away from them” thinks he has a way to make zero-carbon electricity from natural gas.

Finance

• Climate-related extreme weather is bad for homeowners and insurers, but is driving up stock prices for roofing companies.

Politics & Policy

• Weapons, fashion, and high-tech chips are among the items that policymakers in developing countries want to tax to raise money for climate finance.
• UN chief António Guterres called for a global ban on fossil fuel advertising.

EVs

• EV sales are booming in Nepal, helped along by the country’s abundant low-cost hydropower and helping to alleviate its terrible urban smog.
• General Motors had its best-ever month for EV sales in May, selling 9,000 vehicles in the US and Canada even after shelving its best-selling Bolt.
• Several long-range EVs sold in the US are now cheaper than the average fuel-powered car, including options from Tesla, Hyundai, and GM.

Food & Agriculture

• Need protein without the carbon footprint? Swap out beef with mushrooms, oysters, insects, and lentils.

Gernot Wagner, climate economist at the Columbia University Business School.

• US climate tech can’t thrive without confronting China.
• Western allies near deal to fund Ukraine with Russian assets.
• The strange tale of a $457 million deposit, 100 million masks, and one tiny bank.