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On changes at the EPA, New York’s climate superfund, and a failed merger
Current conditions: Winter storm Garnett could drop up to 9 inches of snow on parts of New England this weekend • A blast of warm air is breaking temperature records in Texas, New Mexico, and Colorado • Two people were killed in Tennessee by a possible tornado. If confirmed, this would be the first deadly tornado of 2025.
The Federal Highway Administration issued a letter to state Departments of Transportation on Thursday declaring that states were no longer authorized to spend billions of dollars previously approved for electric vehicle charging networks. The decree pertains to the National Electric Vehicle Infrastructure Program, or NEVI, a program created in 2021 under the Bipartisan Infrastructure Law, which allocated $5 billion to states to strategically build electric vehicle charging networks along major roads. As Heatmap’s Emily Pontecorvo explains, advocates believed the NEVI program was untouchable because money that’s already been allocated can’t be recalled, but the FHWA apparently thinks it has found a workaround. Under NEVI, states are each allocated a certain amount of money every year for five years, and they have to submit an annual plan for how they intend to use the funds. Those plans must align with overall program guidance published by the secretary of transportation. The new leadership at the Department of Transportation has decided to rescind the previously issued guidance. That means the state plans that were previously approved are no longer valid. The letter says states will still be able to get reimbursed for expenses related to previously awarded projects, “in order to not disrupt current financial commitments.” But the more than $2.6 billion that has not been awarded will be frozen.
The Environmental Protection Agency put 168 employees on administrative leave yesterday evening. The workers focused on “environmental justice,” specifically addressing pollution in underserved communities. Molly Vaseliou, an EPA spokeswoman, said these employees “did not relate to the agency’s statutory duties or grant work.” As The New York Times reported, the agency cannot put employees on leave for more than 10 days in a year, so “observers said they interpret the administrative leave notices as a first step toward the eventual shuttering the office.” Meanwhile, new U.S. attorney general Pam Bondi told the Justice Department to get rid of its environmental justice and diversity, equity, and inclusion programs, and identify basically anyone connected to these initiatives or who might have received federal funding to advance their causes.
New York is being sued by 22 other states and a handful of fossil fuel companies hoping to block its Climate Change Superfund Act, which requires major polluters to pay for their emissions. Starting in 2028, the companies would end up paying $3 billion each for 25 years – amounting to some $75 billion total – and the money would go towards climate adaptation and mitigation projects. The states challenging the law say only the federal government can regulate air quality. In other legal news, the Supreme Court yesterday denied the Trump administration’s request to pause a case weighing whether California should be able to set its own vehicle emissions standards.
Norwegian clean tech company Freyr Battery has canceled its plans to build a $2.6 billion lithium-ion battery plant in Georgia. The project was expected to bring more than 700 new jobs to the state. In a letter to the Coweta County Development Authority, Freyr said the decision “was made reluctantly, as the Company has realigned its near-term strategic goals.”
The Nissan/Honda merger is reportedly dead, and Nissan is looking for new partners. The two companies had been in talks to create the world’s third-largest automaker by sales, but the negotiations fell apart after Honda pushed for Nissan to become a subsidiary of Honda, instead of creating a joint holding company. Both companies were hoping the merger would allow them to share resources to produce electric vehicles to compete with market leaders like Tesla and BYD. Back in December, when the merger was first reported, one consultant toldThe New York Times that “if Nissan and Honda are not able to achieve this, they will not survive. Times are truly that tough.”
“The overall trend in cost reductions is so strong that nobody, not even President Trump, will be able to halt it.”
–Matthias Kimmel, head of Energy Economics at BloombergNEF. A new report from BNEF says the costs of renewables will continue to fall quickly in 2025, with production costs for new wind and solar farms already undercutting those of new fossil fuel plants.
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It’s the largest facility of its kind of Europe and will immediately make the lithium-sulfur battery startup a major player.
Lyten, the domestic lithium-sulfur battery company, has officially expanded into the European market, announcing that it has acquired yet another shuttered Northvolt facility. Located in Gdansk, Poland, this acquisition represents a new direction for the company: Rather than producing battery cells — as Lyten’s other U.S.-based facilities will do — this 270,000 square foot plant is designed to produce complete battery energy storage systems for the grid. Currently, it’s the largest energy storage manufacturing facility in Europe, with enough equipment to ramp up to 6 gigawatt-hours of capacity. This gives Lyten the ability to become — practically immediately — a major player in energy storage.
“We were very convinced that we needed to be able to build our own battery energy storage systems, so the full system with electronics and switch gear and safety systems and everything for our batteries to go into,” Keith Norman, Lyten’s chief sustainability and marketing officer, told me. “So this opportunity became very, very well aligned with our strategy.”
The well-funded startup has been negotiating this transaction — which is expected to close in the third quarter — since Northvolt’s bankruptcy proceedings got underway at the end of last year. It marks the second time the company has snatched up an old Northvolt asset, the first being a Bay Area-based plant capable of producing 200 megawatt-hours of batteries that’s expected to begin operations late this year.
Lithium-sulfur batteries are an emerging technology yet to be deployed at scale. This chemistry — if perfected — has the potential to be much higher energy-density than lithium-ion, and doesn’t require costly critical minerals prone to supply chain volatility such as nickel, manganese, cobalt, and graphite. These are all key elements of lithium-ion batteries and are primarily refined in China, whereas sulfur — the key material in lithium-sulfur batteries — is cheap and abundant around the world. Right now, the Poland facility is set up to produce lithium-ion energy storage systems, but once it starts switching over production lines, it will become likely the first in the world to manufacture lithium-sulfur systems at scale.
Until now, Lyten has only owned assets in the U.S., touting that it sources “well over 80%” of its core battery components domestically. But according to Norman, the startup has always looked to Europe as another key market, as its focus revolves around building local supply chains, not just a U.S.-centric one. “We have a vision to be able to have both battery manufacturing and energy storage manufacturing in the U.S. and in Europe, so that we can localize both supply chains,” he explained to me.
In the short-term, however, the company will continue to build its battery capacity in the U.S., including a a gigafactory in Reno planned for 2027, while it focuses on energy storage in Europe. U.S.-made batteries will supply the Poland facility until Lyten’s hypothetical future Europe-based battery factories can ramp, Norman explained.
Immediately after the deal closes, Lyten will restart manufacturing in order to meet Northvolt’s preexisting contracts for lithium-ion systems. Then throughout this year and next, the startup will work to integrate its own lithium-sulfur production lines, ultimately offering customers both lithium-sulfur and lithium-ion energy storage options. The goal is to produce a gigawatt-hour of system capacity by sometime next year.
Offering two distinct energy storage systems reliant on different battery chemistries will work to Lyten’s advantage, Norman told me via email, giving the company “an incredible amount of flexibility to navigate market uncertainty, supply chain uncertainty, geopolitical uncertainty, and varied customer demands.”
The company’s eagerness to acquire shuttered facilities isn’t driven by turbulence in the current political climate, Norman said, but rather by “opportunistic” market circumstances. Yet I also can’t help but notice that this would be a promising way for Lyten to cost-effectively scale at a time when, Norman said, it’s still taking a “wait and see” approach to tariffs and other fluctuating policies that stand to impact the domestic buildout of energy infrastructure.
When I spoke with Norman back in April, right after Trump’s “Liberation Day” tariffs came into effect, he expressed concern over how they could lead to spiraling construction costs. Levies on steel and aluminum, for example, now stand at 50%, while imports from China are still subject to cumulative tariffs of at least 54%. As Norman told me then, “the energy transition is a manufacturing transition,” and Lyten itself is “a hard tech company that needs to build a lot of infrastructure.”
So while the finances of the Poland factory acquisition aren’t public, it’s probably safe to assume that scooping up prebuilt infrastructure from a defunct business, taking over production of tried-and-true lithium-ion-based technologies, and expanding into international markets are all cheap and prudent options in this economy.
In terms of demand for energy storage, Norman also mentioned that the market is hotter in Europe right now than in the U.S., making it an optimal place to kick off its new product line. The company expects to sell storage systems from the Poland plant into a variety of other international markets, as well. In December of last year, Lyten announced that it had received letters of interest from the U.S. Export-Import Bank totalling $650 million in financing to deploy lithium-sulfur energy storage systems in the Caribbean and other developing economies.
As the company expands, it’s on the hunt for even more facilities to grab. “We continue to see assets becoming available or potential capital investments that have already been made in battery manufacturing assets that are potentially coming on the market,” Norman told me. He’s got his eyes on all of it. “That’s a real big priority for us.”
Removing the subsidies would be bad enough, but the chaos it would cause in the market is way worse.
In their efforts to persuade Republicans in Congress not to throw wind and solar off a tax credit cliff, clean energy advocates have sometimes made what would appear to be a counterproductive argument: They’ve emphasized that renewables are cheap and easily obtainable.
Take this statement published by Advanced Energy United over the weekend: “By effectively removing tax credits for some of the most affordable and easy-to-build energy resources, Congress is all but guaranteeing that consumers will be burdened with paying more for a less reliable electric grid.”
If I were a fiscal hawk, a fossil fuel lobbyist, or even an average non-climate specialist, I’d take this as further evidence that renewables don’t need tax credits. The problem is that there’s a lot more nuance to the “cheapness” of renewables than snappy statements like this convey.
“Renewables are cheap and they’ve gotten cheaper, but that doesn’t mean they are always the cheapest thing, unsubsidized,” Robbie Orvis, the senior director of modeling and analysis at Energy Innovation, told me back in May at the start of the reconciliation process. Natural gas is still competitive with renewables in a lot of markets — either where it’s less windy or sunny, where natural gas is particularly cheap, or where there are transmission constraints, for example.
Just because natural gas plants might be cheaper to build in those places, however, doesn’t mean they will save customers money in the long run. Utilities pass fuel costs through to customers, and fuel costs can swing dramatically. That’s what happened in 2022 after Russia invaded Ukraine, Europe swore off Russian gas, and the U.S. rushed to fill the supply gap, spiking U.S. natural gas prices and contributing to the largest annual increase in residential electricity spending in decades. Winter storms can also reduce natural gas production, causing prices to shoot up. Wind and solar, of course, do not use conventional fuels. The biggest factor influencing the price of power from renewables is the up-front cost of building them.
That’s not the only benefit that’s not reflected in the price tags of these resources. The Biden administration and previous Congress supported tax credits for wind and solar to achieve the policy goal of reducing planet-warming emissions and pollution that endangers human health. But Orvis argued you don’t even need to talk about climate change or the environment to justify the tax credits.
“We’re not saying let’s go tomorrow to wind, water, and solar,” Orvis said. “We’re saying these bring a lot of benefitsonto the system, and so more of them delivers more of those benefits, and incentives are a good way to do that.” Another benefit Orvis mentioned is energy security — because again, wind and solar don’t rely on globally-traded fuels, which means they’re not subject to the actions of potentially adversarial governments.
Orvis’ colleague, Mike O’Boyle, also raised the point that fossil fuels receive subsidies, too, both inside and outside the tax code. There’s the “intangible drilling costs” deduction, allowing companies to deduct most costs associated with drilling, like labor and site preparation. Smaller producers can also take a “depletion deduction” as they draw down their oil or gas resources. Oil and gas developers also benefit from low royalty rates for drilling on public lands, and frequently evade responsibility to clean up abandoned wells. “I think in many ways, these incentives level the playing field,” O’Boyle said.
When I reached out to some of the clean energy trade groups trying to negotiate a better deal in Trump’s tax bill, many stressed that they were most worried about upending existing deals and were not, in fact, calling for wind and solar to be subsidized indefinitely. “The primary issue here is about the chaos this bill will cause by ripping away current policy overnight,” Abigail Ross Hopper, the CEO of the Solar Energy Industries Association, told me by text message.
The latest version of the bill, introduced late Friday night, would require projects to start construction by 2027 and come online by 2028 to get any credit at all. Projects would also be subject to convoluted foreign sourcing rules that will make them more difficult, if not impossible, to finance. Those that fail the foreign sourcing test would also be taxed.
Harry Godfrey, managing director for Advanced Energy United, emphasized the need for “an orderly phase-out on which businesses can follow through on sound investments that they’ve already made.” The group supports an amendment introduced by Senators Joni Ernst, Lisa Murkowski, and Chuck Grassley on Monday that would phase down the tax credit over the next two years and safe harbor any project that starts construction during that period to enable them to claim the credit regardless of when they begin operating.
“Without these changes, the bill as drafted will retroactively change tax policy on projects in active development and construction, stranding billions in private investment, killing tens of thousands of jobs, and shrinking the supply of new generation precisely when we need it the most,” Advanced Energy United posted on social media.
In the near term, wind and solar may not need tax credits to win over natural gas. Energy demand is rising rapidly, and natural gas turbines are in short supply. Wind and solar may get built simply because they can be deployed more quickly. But without the tax credits, whatever does get built is going to be more expensive, experts say. Trade groups and clean energy experts have also warned that upending the clean energy pipeline will mean ceding the race for AI and advanced manufacturing to China.
Godfrey compared the reconciliation bill’s rapid termination of tax credits to puncturing the hull of a ship making a cross-ocean voyage. You’ll either need a big fix, or a new ship, but “the delay will mean we’re not getting electrons on to the grid as quickly as we need, and the company that was counting on that first ship is left in dire straits, or worse.”
A new subsidy for metallurgical coal won’t help Trump’s energy dominance agenda, but it would help India and China.
Crammed into the Senate’s reconciliation bill alongside more attention-grabbing measures that could cripple the renewables industry in the U.S. is a new provision to amend the Inflation Reduction Act to support metallurgical coal, allowing producers to claim the advanced manufacturing tax credit through 2029. That extension alone could be worth up to $150 million a year for the “beautiful clean coal” industry (as President Trump likes to call it), according to one lobbyist following the bill.
Putting aside the perversity of using a tax credit from a climate change bill to support coal, the provision is a strange one. The Trump administration has made support for coal one of the centerpieces of its “energy dominance” strategy, ordering coal-fired power plants to stay open and issuing a raft of executive orders to bolster the industry. President Trump at one point even suggested that the elite law firms that have signed settlements with the White House over alleged political favoritism could take on coal clients pro bono.
But metallurgical coal is not used for electricity generation, it’s used for steel-making. Moreover, most of the metallurgical coal the U.S. produces gets exported overseas. In other words, cheaper metallurgical coal would do nothing for American energy dominance, but it would help other countries pump up their production of steel, which would then compete with American producers.
The new provision “has American taxpayers pay to send metallurgical coal to China so they can make more dirty steel and dump it on the global market,” Jane Flegal, the former senior director for industrial emissions in the Biden White House, told me.
The U.S. produced 67 million short tons of metallurgical coal in 2023, according to data from the U.S. Energy Information Administration, more than three-quarters of which was shipped abroad. Looking at more recent EIA data, the U.S. exported 57 million tons of metallurgical coal through the first nine months of 2024. The largest recipient was India, the final destination for over 10 million short tons of U.S. metallurgical coal, with almost 9 million going to China. Almost 7 million short tons were exported to Brazil, and over 5 million to the Netherlands.
“Metallurgical coal accounts for approximately 10% of U.S. coal output, and nearly all of it is exported. Thermal coal produced in the United States, by contrast, mostly is consumed domestically,”according to the EIA.
The tax credit comes at a trying time for the metallurgical coal sector. After export prices spiked at $344 per short ton in the second quarter of 2022 following Russia’s invasion of Ukraine (much of Ukraine’s metallurgical coal production occurs in one of its most hotly contested regions), prices fell to $145 at the end of 2024, according to EIA data.
In their most recent quarterly reports, a number of major metallurgical coal producers told investors they wanted to reduce costs “as the industry awaits a reversal of the currently weak metallurgical coal market,” according to S&P Global Commodities Insights, citing low global demand for steel and economic uncertainty.
There was “not a whisper” of the provision before the Senate’s bill was released, according to the lobbyist, who was not authorized to speak publicly. “No one had any inkling this was coming,” they told me.
But it’s been a pleasant surprise to the metallurgical coal industry and its investors.
Alabama-based Warrior Met Coal, which exports nearly all the coal it produces, reported a loss in the first quarter of 2025,blaming “the combination of broad economic uncertainty around global trade, seasonal demand weakness, and ample spot supply is expected to result in continued pressure on steelmaking coal prices.” Its shares were up almost 6% in afternoon trading Monday.
Tennessee-based Alpha Metallurgical Resources reported a $34 million first quarter loss in May, citing “poor market conditions and economic uncertainty caused by shifting tariff and trade policies,” and said it planned to reduce capital expenditures from its previous forecast. Its shares were up almost 7%.
While environmentalists have kept a hawk’s eye on the hefty donations from the oil and gas industry to Trump and other Republicans’ campaign coffers, it appears that the coal industry is the fossil fuel sector getting specific special treatment, despite being far, far smaller. The largest coal companies are worth a few billion dollars; the largest oil and gas companies are worth a few hundred billion.
But coal is very important to a few states — and very important to Donald Trump.
The bituminous coal that has metallurgical properties tends to be mined in Appalachia, with some of the major producers and exporters based in Tennessee and Alabama, or larger companies with mining operations in West Virginia.
One of those, Alliance Resource Partners, shipped almost 6 million tons of coal overseas. Its chief executive, Joseph Craft, andhis wife, Kelly, the former ambassador to the United Nations, are generous Republican donors. Craft was a guest at the White House during the signing ceremony for the coal executive orders.
Representatives of Warrior, Alpha Metallurgical, and Alliance Resources did not respond to a requests for comment.
While coal companies and their employees tend to be loyal Republican donors, the relative small size of the industry puts its financial clout well south of the oil and gas industry, where a single donor like Continental Resources’s Harold Hamm can give over $4 million and the sector as a whole can donate $75 million. This suggests that Trump and the Senate’s attachment to coal has more to do with coal’s specific regional clout, or even the aesthetics of coal mining and burning compared to solar panels and wind turbines.
After all, anyone can donate money, but in Trump’s Washington, only one resource can be beautiful and clean.