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Climate

2 Climate Removal Deals, 1 Final Tax Credit Rule

On ocean-based CO2, Grizzly 399, and the 45X tax credit.

2 Climate Removal Deals, 1 Final Tax Credit Rule
Heatmap Illustration/Getty Images

Current conditions:Tropical Storm Trami brought widespread flooding to the Philippines, killing at least 24 people • The Southwestern U.S. is experiencing a heatwave, with temperatures as high as 25 degrees Fahrenheit above normal • The three NASA astronauts stuck at the International Space Station due to inclement weather are finally on their way home.

THE TOP FIVE

1. Climeworks 🤝 Morgan Stanley

The Swiss direct air capture company Climeworks has found a new, deep-pocketed partner in Morgan Stanley. The financial services company will pay an undisclosed amount to Climeworks to suck 40,000 tons of CO2 from the air and store the greenhouse gas underground on its behalf. This is the second largest deal Climeworks has secured to date, following an 80,000-ton sale to Boston Consulting Group, and the company says the purchase will help accelerate progress on its first project in the United States, a direct air capture hub in Louisiana called Project Cypress.

2. Microsoft goes big on ocean CDR

Meanwhile, Microsoft is rounding out its already extensive carbon removal portfolio with its first major investment in ocean-based technology. The tech giant agreed to buy up to 350,000 tons of CO2 removal from a startup called Ebb Carbon over the next 10 years, slightly more than its deal with the direct air capture company Heirloom.

Ebb uses electricity to separate seawater into acidic and basic streams, then returns the basic stream back to the ocean, where it reacts with carbon in the water and promotes faster CO2 absorption from the air. The company must achieve and verify an initial 1,300 tons of CO2 removal before Microsoft commits to buying the remainder. The company has a small pilot project up and running at the Pacific Northwest National Laboratory in Washington, and is working with federal scientists and the University of Washington to measure and model the results.

3. The IRA’s X-Factor is in full effect

The Treasury Department issued final rules this morning for the Advanced Manufacturing Production Tax Credit, also known as 45X. The program is the backbone of the Inflation Reduction Act, offering incentives for domestic manufacturing of the components of solar panels, wind turbines, and batteries, subsidizing every step of the supply chain for these technologies. During a call with reporters on Wednesday, Deputy Secretary of the Treasury Wally Adeyemo said the tax credit has already driven more than $126 billion in private sector clean energy manufacturing investments.

The biggest change introduced in the final rule that the administration highlighted was allowing critical mineral extraction — separately and in addition to mineral processing — to qualify for a 10% tax credit. “The U.S. has major deposits of critical minerals like lithium and palladium. Extracting and processing them here in America, as opposed to relying on China, Russia, and other countries with weak worker and environmental protection, is an economic and national security priority for us,” Adeyemo said.

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  • 4. An update on Vineyard Wind

    Engineers at GE Vernova, the manufacturer of the Vineyard Wind offshore turbine blade that crashed into the ocean this summer, have been poring over ultrasound images of its other blades and conducting physical inspections with drones to figure out whether the fiasco was a one-off or a more widespread issue. During an earnings call on Wednesday, CEO Scott Strazik revealed that the company did, in fact, find a similar “manufacturing deviation” in “a very small proportion, low single-digit proportion” of the blades. The company now intends to “remove some blades from the Vineyard Wind farm while strengthening other blades as needed,” according to an update from Vineyard Wind.

    5. Another (potential) nuclear revival

    The 600 megawatt Duane Arnold Energy Center just outside Cedar Rapids, Iowa could be the next shuttered nuclear plant to come back from the dead. The plant’s owner, NextEra, is evaluating a restart, CEO John Ketchum told investors on an earnings call yesterday. “It goes without saying, there’s very strong interest from customers, data-center customers in particular, in that site,” Ketchum said. “We’re in a period of substantial power demand.”

    THE KICKER

    Grizzly 399, the world-renowned, 400-pound bear that roamed Grand Teton National Park for nearly 30 years, died tragically on Tuesday after being hit by a Subaru on the highway. She leaves behind more than a dozen offspring, including a cub born just last year that fans have nicknamed “Spirit.”

    Jonathan Steele/Getty Images

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    Economy

    AM Briefing: Liberation Day

    On trade turbulence, special election results, and HHS cuts

    Trump’s ‘Liberation Day’ Tariffs Loom
    Heatmap Illustration/Getty Images

    Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.

    THE TOP FIVE

    1. Trump to roll out broad new tariffs

    President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.

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    Podcast

    The Least-Noticed Climate Scandal of the Trump Administration

    Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.

    Lee Zeldin.
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    The Inflation Reduction Act dedicated $27 billion to build a new kind of climate institution in America — a network of national green banks that could lend money to companies, states, schools, churches, and housing developers to build more clean energy and deploy more next-generation energy technology around the country.

    It was an innovative and untested program. And the Trump administration is desperately trying to block it. Since February, Trump’s criminal justice appointees — led by Ed Martin, the interim U.S. attorney for the District of Columbia — have tried to use criminal law to undo the program. After failing to get the FBI and Justice Department to block the flow of funds, Trump officials have successfully gotten the program’s bank partner to freeze relevant money. The new green banks have sued to gain access to the money.

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    Funding Cuts Are Killing Small Farmers’ Trust in Climate Policy

    That trust was hard won — and it won’t be easily regained.

    A barn.
    Heatmap Illustration/Getty Images

    Spring — as even children know — is the season for planting. But across the country, tens of thousands of farmers who bought seeds with the help of Department of Agriculture grants are hesitating over whether or not to put them in the ground. Their contractually owed payments, processed through programs created under the Biden administration, have been put on pause by the Trump administration, leaving the farmers anxious about how to proceed.

    Also anxious are staff at the sustainability and conservation-focused nonprofits that provided technical support and enrollment assistance for these grants, many of whom worry that the USDA grant pause could undermine the trust they’ve carefully built with farmers over years of outreach. Though enrollment in the programs was voluntary, the grants were formulated to serve the Biden administration’s Justice40 priority of investing in underserved and minority communities. Those same communities tend to be wary of collaborating with the USDA due to its history of overlooking small and family farms, which make up 90% of the farms in the U.S. and are more likely to be women- or minority-owned, in favor of large operations, as well as its pattern of disproportionately denying loans to Black farmers. The Biden administration had counted on nonprofits to leverage their relationships with farmers in order to bring them onto the projects.

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