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A little-known grant program in the Inflation Reduction Act is spurring almost every state to make a climate plan.
To date, less than half of all states have set forth targets to reduce their greenhouse gas emissions. Within two years, almost all of them will have official climate goals. Even Texas, even West Virginia, even Wyoming.
It’s already been a big year for climate action in states where the issue has been a nonstarter politically. The Inflation Reduction Act, the historic climate package that Biden signed last year, has brought billions of dollars in investment and tens of thousands of new jobs in clean energy manufacturing to places like Georgia. But that state’s governor, Brian Kemp, has managed to champion the economic opportunity without mentioning climate change. Now, his administration is gearing up for its first-ever climate plan.
That’s thanks to a program in the IRA that has flown mostly under the radar called the Climate Pollution Reduction Grants. It earmarked $3 million each for all 50 states, plus Washington, D.C. and Puerto Rico, to produce a comprehensive climate action plan.
The grants are noncompetitive, and states could access the funding simply by opting in. All but four — South Dakota, Kentucky, Florida, and Iowa — said yes, please.
By taking the money, the states agreed to produce an inventory of their greenhouse gas emissions and a list of actions they might take to reduce them, due to the Environmental Protection Agency by March. This is already a meaningful change — many states don’t regularly track or publish data about where their emissions are coming from. Then, in 2025, recipients will have to follow up with a much more detailed plan that includes projections of future emissions if the plan is followed, an analysis of benefits for disadvantaged communities, and workforce planning needs. Their plans will also have to include greenhouse gas reduction goals in line with the Biden administration’s commitment to reduce emissions 50% from 2005 levels by 2030.
For many states, that extra funding could go a long way. While some like California and New York have hundreds of staffers working on emission reduction plans, others may have a dozen or fewer. They haven’t had the capacity to do the data collection, modeling, and community engagement work that emissions inventorying, climate goal-setting, and action planning require. Now, fiscally constrained state environmental agencies will be able to hire extra staff and consultants. That extra support can also help states develop strategies to unlock more federal funding from the dozens of other programs in the IRA.
“A lot of the federal policy conversation is shaped by what happens in states,” Justin Balik, the state program director for the advocacy group Evergreen Action, which fought for this program to be included in the IRA, told me. “And so we saw this opportunity to continue to cement this role that states can play in continuing to drive the ball forward.”
Balik pointed out the funding is especially meaningful in states like Wisconsin, North Carolina, and Pennsylvania, where the governors in office want to be climate champions and have already made substantial climate plans but are hamstrung by conservative legislatures unwilling to fund them.
North Carolina, for example, recently completed a report modeling pathways it could take to achieve Gov. Roy Cooper’s goal of cutting emissions in half by 2030, and reaching net-zero by 2050. Bailey Recktenwald, the climate change policy advisor for the North Carolina governor’s office, told me that the state will use the new grant to do additional analysis of the solutions identified in that report, weighing factors like environmental justice, to determine “which of these recommendations we’ve already put together will get the most bang for our buck.”
Of course, a plan is meaningless without the willpower and funding to act on it, and there’s no requirement for states to fulfill their plans or achieve their goals. A number of states that accepted the planning grants, including Montana and New Hampshire, have made climate action plans in the past, only to let them sit on a shelf. And this could all be moot if a Republican wins in 2024 and shifts priorities at the EPA.
But the EPA’s program dangles a carrot for states to treat the planning process as a starting point — additional funding. Once they’ve submitted their priority plans, states can apply for a second round of grants for implementation. Unlike the planning grants, these are competitive. The EPA has $4.6 billion to hand out in chunks of between $2 million and $500 million for projects that reduce emissions.
That could mean — almost literally — anything. The grants could go toward a one-off project, like replacing a coal plant, or installing carbon capture on a cement plant. They could go toward programs designed to achieve sector-wide goals, like rebates for electric vehicles. Or they could be used for regional partnerships. States in the Northeast, for instance, could go in together on a program to subsidize the beleaguered offshore wind industry. Or they could work together to fund interstate transmission lines that will free up more room for renewables on the grid.
Recktenwald told me one opportunity for North Carolina might be to create incentives to cut emissions from trucks and buses. Cooper had hoped to enact clean truck regulations this year, which a number of other states have adopted, but the legislature prohibited him from doing so. “Now we’re looking for other creative ways to still move that industry and market forward,” Recktenwald said.
The grants’ flexibility leaves room for a range of outcomes — for better and for worse. The think tank RMI is encouraging states and the EPA to consider the timescales required to cut emissions from different sources. “When states are awarded money, it should be based upon how quickly they can move — how relevant a state’s suggested plan of action is to its unique situation,” Drew Veysey, a senior associate at RMI, told me.
It would be more effective for states with a lot of coal plants to use the funding to replace them than to create incentive programs for electric vehicles or heat pumps, for example. When you shut down a coal plant and replace it with clean power, those emissions stop immediately. But if a state starts encouraging the adoption of EVs, it will still have millions of previously sold gas cars driving around for the next 15 years or more. Scientific modeling efforts agree that most, if not all coal plants will have to shut down in the next decade in order to achieve Biden’s 2030 goal.
That may not be on the table in a coal-reliant state like West Virginia or Wyoming; states where climate change is still controversial are already being careful in their public messaging around the program. Montana’s Department of Environmental Quality, for one, has stressed that it’s looking at “non-regulatory, innovative, voluntary” approaches for the program. The Tennessee Department of Environment and Conservation created a video about the program that doesn’t once mention climate change. Good luck trying to avoid it forever, though — the program is literally titled “climate pollution reduction grants.”
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The delayed vote on a net-zero standard for the International Maritime Organization throws some of the industry’s grandest plans into chaos.
Today, members of the International Maritime Organization decided to postpone a major vote on the world’s first truly global carbon pricing scheme. The yearlong delay came in response to a pressure campaign led by the U.S.
The Net-Zero Framework — initially approved in April by an overwhelming margin and long expected to be formally adopted today — would establish a legally binding requirement for the shipping industry to cut its emissions intensity, with interim steps leading to net zero by 2050.
In the intervening months, however, U.S. opposition has gotten much louder. On Thursday, Trump posted on Truth Social that he’s “outraged that the International Maritime Organization is voting in London this week to pass a global Carbon Tax.” He also took the extraordinary step of threatening not to comply with the rules. “The United States will NOT stand for this Global Green New Scam Tax on Shipping, and will not adhere to it in any way, shape, or form.” If the framework ever does pass, noncompliance could subject U.S. vessels to fines or even denial of entry at the ports of IMO member countries, potentially setting off a cycle of retaliatory measures from all sides.
No specific date has yet been scheduled for the forthcoming vote, which will be taken again a year from now. That throws plans for the world’s largest shipping companies — some of which have already taken expensive measures to decarbonize their fleets — into turmoil. The framework would have marked a major turning point for a sector that’s responsible for 3% of global emissions, of course. But even more importantly, it would have made a range of decarbonization technologies — from advanced batteries and clean fuels to wind-assisted propulsion and onboard carbon capture — far more viable and attractive to investors.
Kate Danaher, managing director of the oceans team at S2G Investments, has a vested interest in the frameworks’ eventual passage. “Over the past two years people have really started investing around the anticipation of something like the Net-Zero Framework being adopted,” Danaher told me. For its part, S2G has invested in Sofar Ocean, which focuses on fuel savings through route optimization, battery company Echandia which is aiming to electrify smaller vessels, and ocean data and monitoring companies Xocean and Apeiron Lab.
The new rules were originally set to take effect in 2028, and would apply to large vessels — ships of 5,000 gross tonnage or more — involved in international voyages. Qualifying ships would be assigned a base target for emissions intensity and a stricter “direct compliance target.” For every metric ton of CO2 equivalent that exceeds the compliance target but falls below the base target, ships must pay $100. For all emissions that exceed the base target, ships must pay $380 per metric ton. Noncompliant ships would pay these penalties by purchasing so-called “remedial units” from a central IMO registry, while the cleanest vessels — those performing better than their compliance targets — would earn surplus units they can sell to others or bank for future use.
Green shipping fuels such as e-methanol, e-hydrogen, and e-ammonia — all produced from green hydrogen using renewable electricity — stand to be the biggest winners, she said. “A new fuel would completely decarbonize the industry. That is 10 years out, and is completely contingent on the IMO,” Danaher said, explaining that if the framework ultimately fails, there’s no economic incentive to adopt these more expensive fuels, which also require costly retrofits for existing fleets. But the framework would effectively cause the cost of conventional fuel to rise just as alternative fuels are scaling up, which would allow them to reach parity around 2035, she said.
A specialized agency within the United Nations, the IMO gets its power to set global regulations from the vastness of the ocean itself. Most of the world’s waters exist outside the jurisdiction of any national government. Because of that, IMO member states — which represent the vast majority of global shipping tonnage — have ratified treaties that empower the organization to set safety, security, and environmental standards on the high seas, which members then implement and enforce through their own national laws. Only member states have a stake in IMO policy. Furthermore, vessels that aren’t IMO-compliant face penalties such as fees and even possible detentions when entering the ports of IMO countries.
While IMO decisions are typically made via negotiated consensus, the contentious nature of these new regulations necessitates a vote. U.S. officials celebrated the delay. U.S. Secretary of State Marco Rubio posted on X that the postponement represents “another HUGE win for @POTUS,” going on to say that “the United States prevented a massive UN tax hike on American consumers that would have funded progressive climate pet projects.”
Along with Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy, Rubio last week issued a statement threatening to punish nations that voted in favor of these “activist-driven climate policies” with actions such as banning their ships from U.S. ports, imposing vessel fees, and even leveling sanctions on officials supportive of the regulations.
Saudi Arabia — the world’s second largest oil producer after the U.S. — also strongly opposed the framework, as did a host of other oil-producing Middle Eastern countries, Indonesia, Malaysia, Pakistan, Thailand, Russia and Venezuela. Singapore ultimately put forth the motion to delay the adoption vote for a full year and Saudi Arabia called it to a vote. It passed with a simple majority, with 57 countries approving and 49 opposed.
When it comes to costs, Trump officials might actually have a point, Danaher conceded. “Once alternative fuels come online and people are actively paying penalties, it gets a lot more expensive,” she told me. “I don’t see how this isn’t incredibly inflationary to the global market in 10 years.”
Today’s standard low-sulfur fuel, she explained, costs about $500 per metric ton. But reaching the same energy density with e-methanol, for example, could push the price to around $2,000 a metric ton. “That is all going to get passed on, essentially, to the consumer,” she said.
Even so, the framework has the backing of major shipping trade organizations and industry giants alike, from the International Chamber of Shipping to Maersk. As a group of leading international maritime associations put it in an open letter last week, “Only global rules will decarbonise a global industry. Without the Framework, shipping would risk a growing patchwork of unilateral regulations, increasing costs without effectively contributing to decarbonisation.”
Indeed, a universal set of coherent rules is what many in the sector want most, Danaher affirmed. Some voting bodies, such as the EU and Singapore, have already set their own shipping-related emissions requirements, creating a regulatory patchwork that’s both costly and confusing for companies to comply with. “I think most people are like, let’s just do this. Let’s rip the Band-Aid off, and let’s get clarity,” Danaher told me.
In a statement released after the vote’s delay and the conclusion of the IMO’s days-long meeting in London, Thomas A. Kazakos, the shipping chamber’s secretary general, said, “We are disappointed that member states have not been able to agree a way forward at this meeting. Industry needs clarity to be able to make the investments needed to decarbonise the maritime sector, in line with the goals set out in the IMO GHG strategy.”
The delay also risks delegitimizing the power of the IMO as a whole, something the organization’s Secretary-General, Arsenio Dominguez, warned about in the meeting’s opening remarks on Tuesday, when he stated that “Prolonged uncertainty will put off investments and diminish confidence in IMO.”
There would be other ways for shippers to comply with the framework besides switching to e-fuels, Danaher told me. For example, S2G’s portfolio company Sofar Ocean operates a network of ocean sensors designed to improve marine weather predictions and power a route optimization platform that can help ships save time, fuel, and ultimately, emissions.
Software solutions have a pretty low barrier to adoption. But a step up in complexity — and cost — would involve a technology such as wind-assisted propulsion. The companies Norsepower and Anemoi, for example, use a cylindrical “rotor sail” that creates a powerful thrust as it spins, which they say allows for up to 25% to 30% fuel savings. Another approach is the “rigid wing sail,” such as that developed by Bar Technologies. This generates lift in the direction of the ship’s movement with less drag than a normal sail — similar to how an airplane wing works.
Pairing route optimization with wind-assisted propulsion will generate even greater emissions savings, as the software can direct ships towards areas with the most advantageous winds. Given the obvious co-benefits and cost savings stemming from lower fuel use, Danaher thinks this tech could gain traction even if the regulations ultimately fail to pass next year. “I think the adoption curve will still continue without IMO [Net-Zero Framework], but I think it'll be slower,” she told me.
One approach she doesn’t think will be economically viable without the framework is onboard carbon capture. This tech, which traps carbon dioxide from a ship’s exhaust system before it’s released into the atmosphere, is being explored by startups including Seabound — which I reported on last year — and Value Maritime, as well as more established companies such as Mitsubishi and Wartsila. “A lot of the carbon capture technologies have not yet solved for how to turn that captured carbon into a valuable resource, and how to get it off the boat, put it in a pipeline, and sell it,” Danaher told me.”The economic incentive just isn't there without the IMO.”
At the same time, when I talked to one of Seabound’s backers — Clea Kolster, of Lowercarbon Capital — last year, she told me that when it comes to cargo shipping, “carbon capture is probably the only way that you can get a meaningful amount of emissions reductions in any near term way.” And it’s true that alternative fuels will take a while to scale up, so if the framework is ultimately adopted, carbon capture may still have an important role to play — at least that’s what investors and startups alike are banking on. “Everybody's talking about carbon capture in anticipation of this getting adopted,” Danaher told me. “All these vessels are going to be old, they’re going to need to comply, and they’re not going to be able to comply fast enough,” she said.
Amidst the turmoil, one silver lining is that interest in maritime innovation and efficiency appears to be increasing regardless of global frameworks. For one, the surge in global military spending has underscored this tech’s potential for dual-use applications. “A lot of wars happen in and around the oceans, because that’s where we intersect each other the most.” Danaher told me. Many of S2G’s investments in ocean tech have received additional backing from governments and defense agencies looking to make their fleets more efficient, energy resilient, and secure. “Every single one of our ocean tech companies, one of their customers is the government, or many governments,” she said.
It’s an important reminder that there are many practical reasons for investors and states alike to support a decarbonization agenda, regardless of whether the U.S. is on board or not. But a global system of carrots and sticks sure wouldn’t hurt either. And now, we face the uneasy prospect of waiting another year to see whether the shipping industry will resist the Trump-era pushback or abandon its collective ambitions for a decarbonized future.
Amarillo-area residents successfully beat back a $600 million project from Xcel Energy that would have provided useful tax revenue.
Power giant Xcel Energy just suffered a major public relations flap in the Texas Panhandle, scrubbing plans for a solar project amidst harsh backlash from local residents.
On Friday, Xcel Energy withdrew plans to build a $600 million solar project right outside of Rolling Hills, a small, relatively isolated residential neighborhood just north of the city of Amarillo, Texas. The project was part of several solar farms it had proposed to the Texas Public Utilities Commission to meet the load growth created by the state’s AI data center boom. As we’ve covered in The Fight, Texas should’ve been an easier place to do this, and there were few if any legal obstacles standing in the way of the project, dubbed Oneida 2. It was sited on private lands, and Texas counties lack the sort of authority to veto projects you’re used to seeing in, say, Ohio or California.
But a full-on revolt from homeowners and realtors apparently created a public relations crisis.
Mere weeks ago, shortly after word of the project made its way through the small community that is Rolling Hills, more than 60 complaints were filed to the Texas Public Utilities Commission in protest. When Xcel organized a public forum to try and educate the public about the project’s potential benefits, at least 150 residents turned out, overwhelmingly to oppose its construction. This led the Minnesota-based power company to say it would scrap the project entirely.
Xcel has tried to put a happy face on the situation. “We are grateful that so many people from the Rolling Hills neighborhood shared their concerns about this project because it gives us an opportunity to better serve our communities,” the company said in a statement to me. “Moving forward, we will ask for regulatory approval to build more generation sources to meet the needs of our growing economy, but we are taking the lessons from this project seriously.”
But what lessons, exactly, could Xcel have learned? What seems to have happened is that it simply tried to put a solar project in the wrong place, prizing convenience and proximity to an existing electrical grid over the risk of backlash in an area with a conservative, older population that is resistant to change.
Just ask John Coffee, one of the commissioners for Potter County, which includes Amarillo, Rolling Hills, and a lot of characteristically barren Texas landscape. As he told me over the phone this week, this solar farm would’ve been the first utility-scale project in the county. For years, he said, renewable energy developers have explored potentially building a project in the area. He’s entertained those conversations for two big reasons – the potential tax revenue benefits he’s seen elsewhere in Texas; and because ordinarily, a project like Oneida 2 would’ve been welcomed in any of the pockets of brush and plain where people don’t actually live.
“We’re struggling with tax rates and increases and stuff. In the proper location, it would be well-received,” he told me. “The issue is, it’s right next to a residential area.”
Indeed, Oneida 2 would’ve been smack dab up against Rolling Hills, occupying what project maps show would be the land surrounding the neighborhood’s southeast perimeter – truly the sort of encompassing adjacency that anti-solar advocates like to describe as a bogeyman.
Cotton also told me he wasn’t notified about the project’s existence until a few weeks ago, at the same time resident complaints began to reach a fever pitch. He recalled hearing from homeowners who were worried that they’d no longer be able to sell their properties. When I asked him if there was any data backing up the solar farm’s potential damage to home prices, he said he didn’t have hard numbers, but that the concerns he heard directly from the head of Amarillo’s Realtors Association should be evidence enough.
Many of the complaints against Oneida 2 were the sort of stuff we’re used to at The Fight, including fears of fires and stormwater runoff. But Cotton said it really boiled down to property values – and the likelihood that the solar farm would change the cultural fabric in Rolling Hills.
“This is a rural area. There are about 300 homes out there. Everybody sitting out there has half an acre, an acre, two acres, and they like to enjoy the quiet, look out their windows and doors, and see some distance,” he said.
Ironically, Cotton opposed the project on the urging of his constituents, but is now publicly asking Xcel to continue to develop solar in the county. “Hopefully they’ll look at other areas in Potter County,” he told me, adding that at least one resident has already come to him with potential properties the company could acquire. “We could really use the tax money from it. But you just can’t harm a community for tax dollars. That’s not what I’m about.”
I asked Xcel how all this happened and what their plans are next. A spokesperson repeatedly denied my requests to discuss Oneida 2 in any capacity. In a statement, the company told me it “will provide updates if the project is moved to another site,” and that “the company will continue to evaluate whether there is another location within Potter County, or elsewhere, to locate the solar project.”
Meanwhile, Amarillo may be about to welcome data center development because of course, and there’s speculation the first AI Stargate facility may be sited near Amarillo, as well.
City officials will decide in the coming weeks on whether to finalize a key water agreement with a 5,600-acre private “hypergrid” project from Fermi America, a new company cofounded by former Texas governor Rick Perry, says will provide upwards of 11 gigawatts to help fuel artificial intelligence services. Fermi claims that at least 1 gigawatt of power will be available by the end of next year – a lot of power.
The company promises that its “hypergrid” AI campus will use on-site gas and nuclear generation, as well as contracted gas and solar capacity. One thing’s for sure – it definitely won’t be benefiting from a large solar farm nearby anytime soon.
And more of the most important news about renewable projects fighting it out this week.
1. Racine County, Wisconsin – Microsoft is scrapping plans for a data center after fierce opposition from a host community in Wisconsin.
2. Rockingham County, Virginia – Another day, another chokepoint in Dominion Energy’s effort to build more solar energy to power surging load growth in the state, this time in the quaint town of Timberville.
3. Clark County, Ohio – This county is one step closer to its first utility-scale solar project, despite the local government restricting development of new projects.
4. Coles County, Illinois – Speaking of good news, this county reaffirmed the special use permit for Earthrise Energy’s Glacier Moraine solar project, rebuffing loud criticisms from surrounding households.
5. Lee County, Mississippi – It’s full steam ahead for the Jugfork solar project in Mississippi, a Competitive Power Ventures proposal that is expected to feed electricity to the Tennessee Valley Authority.