You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
If the U.S. wants to compete on EVs, it will have to catch up to the rest of the world.
On Wednesday, the Biden administration finalized sweeping new rules that will sharply limit how much carbon pollution new cars and trucks can emit into the atmosphere. The rules — which rank as one of Biden’s most important climate moves — are aimed at accelerating the country’s transition to electric vehicles and plug-in hybrids, requiring most new cars sold in 2032 to burn little gasoline or none at all.
My colleague Emily Pontecorvo has an excellent explainer on how the new rules work. But I want to focus on one more aspect: Why they are able to do so much more than previous tailpipe regulations.
The new rules are not the Environmental Protection Agency’s first foray into regulating climate-warming pollution from vehicle tailpipes. Since 2010, the EPA has periodically tightened new limits on the amount of climate-warming pollution that cars and light-duty trucks can emit. The new rules are in some ways merely the next evolution of that approach.
But they also go much further than the agency ever has before. Where previous regulations essentially required automakers only to sell some conventional hybrids and electric vehicles, by the beginning of next decade, the lion’s share of cars sold in the United States must be electric vehicles or hybrids, the EPA now says.
Why is that ambition possible? One reason is that the United States has a more aggressive climate law on the books now than it has had during past rulemakings. Biden’s climate law, the Inflation Reduction Act, will subsidize the purchase, leasing, and manufacturing of electric vehicles. Because of how the EPA calculates the costs and benefits of its proposals, these subsidies will significantly cut the projected cost of even an ambitious rule — in this case by as much as $65 billion. (The agency calculates that consumers will save even more money — up to a staggering $230 billion — by paying less gasoline tax because they will be buying less fuel.)
Yet the IRA is not the only reason — or even the main reason — these rules can go so much further than what was previously imagined. If the United States can pursue such an ambitious standard now, that’s because it’s following on the heels of electric vehicle policy passed in other jurisdictions: China, California, and the European Union. These state and national policies have set the pace for the EV transition around the world, setting new market expectations or significantly cutting the costs of building an electric car.
They also created a sense of inevitability around electric vehicles. “The future is electric. Automakers are committed to the EV transition,” John Bozella, the president and CEO of the Alliance for Automotive Innovation, a car-industry trade group in Washington, said in a statement Wednesday on the EPA rules.
Corey Cantor, an analyst at the market research firm BNEF, summed it all up. “What is different this time — compared to say, where the world was in 2016 — is that there is now a thriving global EV market, versus a nascent one,” he said. There are also a handful of global companies poised to profit from a global EV transition, regardless of what Ford, Toyota, General Motors, and other legacy auto brands do.
Even before Biden asked the EPA to issue new regulations, in other words, these policies had changed the metaphorical game board — and changed how far the agency could push the rules.
These global policies don’t all take the same form. California and the European Union already require that all new cars sold in 2035 must be electric vehicles or plug-in hybrids, although the EU has carved out an exception for a theoretical zero-carbon gasoline replacement.
Due to a longstanding provision in the Clean Air Act, other U.S. states can opt into California’s stricter air pollution laws. So far, 14 in total — making up more than 40% of America’s light-duty car market — have adopted California’s 2035 zero-emissions vehicle mandate.
China, meanwhile, has not set a requirement that all cars must plug in by a certain year. Instead, it will require that “new energy vehicles” — a category that can include EVs and plug-in hybrids, but also conventional hybrids — must make up half of all car sales by 2035. But Chinese companies have raced ahead of this target. Wang Chuanfu, the CEO of the massive Chinese automaker BYD, estimated this weekend that 50% of China’s car sales could be new energy vehicles as soon as June.
All together, these mandates added up to a strong market signal. By last year, more than half of the global auto market was already covered by some form of clean vehicle rule — even before the EPA did anything final. Now, if the new EPA rules are enforced as written, then more than 60% of the world’s car market will be subject to some kind of emissions mandate.
This reflects, at least in part, a recognition that the global car market is changing beyond the ability of Washington politicians to influence it. “If we’re talking 10 years from now, policy probably won’t be needed, at least in leading markets. EVs will have just naturally taken over the market,” Stephanie Searle, who leads research programs at the International Council on Clean Transportation, told me.
Over the past year, a parade of cheap new EVs from Chinese automakers — including the BYD Seagull, a sub-$10,000 hatchback that gets up to 251 miles of range — have stunned the automotive industry. Jim Farley, the CEO of Ford, told investors last month that the company was reorienting its strategy to combat the rise of Chinese electric-car makers, such as BYD and Geely.
“If you cannot compete fair and square with the Chinese around the world, then 20% to 30% of your revenue is at risk,” Farley said at an industry conference last month. He disclosed that Ford had set up a secret internal “skunkworks” engineering team to make an affordable electric vehicle that could compete head-to-head with Chinese models on cost. The company has delayed the release of a new electric three-row SUV in order to produce three roughly $25,000 models, according to a Bloomberg report last week.
“Automakers see the future is electrified, and they see that Chinese companies will eat their lunch if they don’t get going,” Searle, the clean transportation researcher, said. “There’s no putting the genie back in the bottle.”
But China’s dominance was not inevitable — it was itself the result of ambitious industrial policies. Roughly 15 years ago, China identified the electric vehicle industry as a sector where it could eventually become a global leader in export markets, Benjamin Bradlow, a Princeton professor of sociology and international affairs, told me.
Since then, the country’s leaders have targeted the EV sector with generous subsidies far beyond what Americans lawmakers considered for the IRA, he said. They have also encouraged the EV industry’s geographic spread across China and required automakers to sell a certain percentage of EVs across their vehicle fleet.
“It’s a very different style of policymaking” from what America has done with the IRA, Bradlow said, although like that law it also aimed to lower the cost of technologies. “[China] is targeting a sector and it’s being very specific about being at the technological and price frontier — it’s very export-oriented.”
These policies have succeeded beyond imagining. China is now the world’s largest exporter of cars, and it has become a goliath in the EV industry. The country has achieved what hippies and renegades have long claimed is possible: a thriving and cutthroat electric vehicle industry, where consumers are willing to buy EVs without significant subsidies. (Indeed, China’s electric-car makers have been locked in a price war over the past year, driving even greater adoption as prices fall.)
These Chinese industrial policies — along with American and European-funded R&D — have cut tens of thousands of dollars from EV prices. Over the past three decades, the cost of manufacturing a battery has fallen by 97%, and by 2027 manufacturing a new EV battery is projected to cost less than $100 a kilowatt-hour, a long-theorized benchmark at which an electric vehicle will be competitive with a gasoline vehicle.
In the United States, mandates and subsidies in achieving mass EV adoption have not been quite as enthusiastically received. Some 7% of new cars sold in the United States last year were EVs, an all-time high. Plug-in and conventional hybrids made up an additional 8% of new car sales, according to the U.S. Energy Information Administration.
Those sales shares will need to double repeatedly in the years ahead for American automakers to meet the EPA’s new standards. And they point to at least one form of success that has alluded American policymakers so far: creating a robust, popular EV industry that can win over consumers on its own terms.
“The ultimate success of the policy and transition overall is a mix between policy, consumer adoption, and the automakers themselves,” Cantor, the BNEF analyst, told me.
For the first time ever, in other words, “automakers who fall behind may pay a far higher cost for failure to transition,” Cantor said. And that — above anything else — is what makes these EPA rules different from any that have come before.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
The Trump administration appears to be advancing solar projects through the permitting process now.
After a temporary halt to permitting for solar projects, the Bureau of Land Management told me a few weeks ago that it had lifted the pause, but I had told you I would wait for confirmation to see whether projects could actually move through government permitting. On Friday, the Bureau of Land Management publicly confirmed that federal solar permitting can happen again, formally approving the Leeward Renewable’s Elisabeth solar project in Yuma County, Arizona – what appears to be the first utility-scale solar facility on federal acreage approved by the Trump administration.
The Elisabeth project is located in a remote part of southwestern Arizona in the Agua Caliente Solar Energy Zone, an area designated for solar energy leasing that has existed for more than a decade, and is adjacent to other large solar projects that have been previously approved according to BLM.
On the same day, BLM released a draft environmental review of a separate solar project in Arizona that the agency segregated land for late last year at the same time as Elisabeth: the Avantus’ Pinyon solar-plus-storage project, which is open for public comment through late May. Tucked on page 37 of that draft document was a list of other solar projects in the nearby vicinity on federal lands that have yet to enter the federal permitting process under the National Environmental Policy Act, which BLM dubbed as “reasonably foreseeable” impacts to the cumulative environment.
The fact BLM is willing to admit other solar projects could advance later on is significant after the sputtering seen in the earliest days of the Trump administration. We’d seen hints of progress seeping through updates to BLM webpages. In mid April, we reported the agency quietly updated the timetable for the Esmerelda 7 mega-solar project in Nevada to say the agency would issue a final decision on the project this summer. I took a peek through the BLM data and found other examples of the same thing, including the Bonanza solar farm, which is now expected to receive its final environmental impact statement in June according to the project website.
BLM has also moved forward with transmission lines on federal lands that would go to solar projects off federal lands, indicating a level of agnosticism about connecting solar farms to the grid if the energy is generated on private property.
It’s still not clear whether solar permits will be a steady trickle for the foreseeable future or if this form of renewable energy could benefit from the Trump administration’s desires to maximize energy generation. Take all of this with a grain of salt because at any moment, a news cycle or disgruntled legislator could steal the president’s ear and make him angry at solar power.
But in times as chaotic as these for U.S. renewables developers, we’ll take this ray of sunshine.
Let’s play out what could happen as the House Ways and Means Committee does its work.
One of the most important fights over the Inflation Reduction Act’s survival has finally arrived. But it’s not playing out in the open. It’s happening behind the closed doors of a powerful House committee in charge of tax policy.
The House Ways and Means Committee is writing its version of Republicans’ budget reconciliation bill, the centerpiece of President Donald Trump’s legislative agenda. The committee could release that text as soon as mid-May. And other than a few broad outlines — the text will extend Trump’s tax cuts for the wealthy, and it will increase the deficit by no more than $2.8 trillion — nobody has any idea what it will say.
Whatever the final text, though, will give us the first real sense of how likely the Inflation Reduction Act’s tax credits are to survive in the Trump tax bill. After months of speculation and tea leaf-reading, the House Ways and Means Committee’s draft will represent an opening position of sorts for Republican leadership — and illustrate just how close to repeal the majority is willing to get.
The committee could take a scorched-earth approach, cutting essentially every IRA tax credit in order to force members to fight to get policies back into the final bill. Or it could reform some tax credits so significantly that it effectively repeals the IRA, even if many policies remain on the books.
It could also reform some credits — such as the electric vehicle and clean electricity tax credits — while leaving most others untouched.
The most important suggestion of what will be in the final version came on Thursday in a new letter addressed to Jason Smith, the Ways and Means Committee chairman, and signed by 38 House Republicans. The letter demands the IRA’s full repeal — essentially heralding a potential new “anti-IRA” caucus within the GOP.
“We are deeply concerned that President Trump’s commitment to restoring American energy dominance and ending what he calls the ’‘green new scam’ is being undermined by parochial interests and short-sighted political calculations,” the letter says.
The letter writers focus their ire on subsidies for “wind and biofuel[s] … carbon capture and hydrogen … [and] solar and electric vehicles” that they say form the backbone of the bill.
So far, House Republicans have largely written letters about the IRA to call for its preservation. Last summer, 18 House Republicans wrote to Speaker of the House Mike Johnson to ask him to move gingerly around any “repeal or reform” of the tax credits should Republicans win the November election.
“We must reverse the policies which refine American families while protecting and refining those that are making our country more energy independent and America more energy secure,” the letter said.
Since then, the number of pro-IRA voices in the GOP has risen. Last month, 21 House Republicans wrote to Johnson again in support of the law. But their language was slightly changed, advising that any reforms proceed in a “targeted and pragmatic fashion.” They did, however, oppose “premature credit phase outs” or restrictions on transferability.
Speaking earlier this week at a Semafor event, the Illinois Republican and Ways and Means member Darin LaHood imagined phasing out some of the energy tax credits earlier.
“The approach we’'re looking at now is how you have an appropriate ramp-down [of IRA tax credits] that allows for businesses and companies to continue to be active in this space, but also saves money," LaHood said.
He added that there is a “bullseye” on the clean energy law, and said that “we’ll see” whether any of its provisions are preserved.
Whatever form the final law takes, this legislative vehicle will likely determine the fate of the IRA’s energy tax credits and other climate spending. Trump has lambasted the IRA, and some Republicans believe that its tax credits should be repealed to pay for their tax cuts for wealthy earners.
Ways and Means will not automatically control the final product. Ultimately, they will have to reconcile their version of the text with what’s written by their counterpart, the Senate Finance Committee. Other committees will oversee the IRA’s environmental grants and loans. (My colleague Emily Pontecorvo wrote about the first markup — from the House Transportation and Infrastructure Committee — on Tuesday.) But the Senate has a more forgiving budget target than the House does, which means the Ways and Means Committee is where the IRA could go to die. That’s because it oversees tax policy — and therefore manages the IRA’s all-important tax credits.
The committee also has a spending problem. The legislative process Republicans have chosen to pass their budget bill, known as reconciliation, begins with establishing binding spending limits for committees in both the House and the Senate. That process wrapped up last month.
Under the guidelines passed by the House earlier this year, the Ways and Means Committee can expand the deficit by as much as $4.5 trillion. But simply extending the 2017 tax cuts’ expiring provisions will cost $4.4 trillion — and the committee wants to do more besides, including expanding the deductions that people can claim for their local and state taxes. The committee will struggle to pay for everything it wants to do — and it could look to repealing parts of the IRA to fix it.
It doesn’t help that Representative Jason Smith of Missouri, the Ways and Means chairman, has called the IRA “welfare for the wealthy and well-connected.”
The committee’s conservative bent — and the fact that GOP lawmakers broadly want to stay on track to pass a bill by the end of the summer — mean that the IRA tax cuts are especially vulnerable during this period.
Most of the IRA’s tax credits are due to sunset in 2032. But one measure — a technology-neutral credit to support new clean electricity generation — could run for much longer than that.
Under the law as it stands today, that credit is supposed to last until the United States eliminates much of the greenhouse gas emissions produced by its power grid as compared to 2022 levels. Even if the credit remains in place, that could take another 30 or 40 years to happen, by one estimate — making the tech-neutral tax credit one of the most important climate policies in the law. The IRA’s power sector policies are responsible for more than 80% of the law’s emissions-reducing impact.
That also makes it among the most expensive policies in the law. When Republicans talk about ending tax credits early, the tech-neutral tax credit is an obvious target. Two lawmakers from North Dakota — Representative Julie Fedorchak and Senator Kevin Cramer — are working on language to phase out some tax credits in five years, Axios Pro has reported.
That would shut down the credit by 2030. But ending the credit by then could reshape what kind of energy technologies the law supports. Republicans tend not to see all zero-carbon electricity equally — while they often champion nuclear and advanced geothermal generation, many look less favorably on wind and solar power.
But by terminating the tech-neutral tax credit at the end of the decade, Republicans could help essentially the very technologies they don’t want. There are no new nuclear or geothermal projects in the development pipeline across the country, and new ones are unlikely to crop up until the late 2020s at the earliest. Under the law, energy projects must be “placed in service” by the time a tax credit expires, meaning that virtually no new nuclear or geothermal projects could qualify.
New nuclear projects will face especially serious trouble if the Trump administration guts the Department of Energy’s in-house bank, the Loan Programs Office, as now seems likely.
At the same time, there are plenty of new solar and battery projects planned across the country. Developers of these projects could rush to get them into service before a potential 2029 sunset date. The industry even has experience hurrying projects to completion: It often had to do so during the 2010s, when the solar investment tax credit faced repeated expirations.
Other Republicans have suggested terminating the law’s transferability clause. Under the IRA as it stands today, companies can sell their tax credits to other firms that can better use the subsidy. Depending on how it’s implemented, that reform could hurt the IRA by reducing the value of its tax credits, because companies will have to adopt more complicated financial structures in order to claim a given subsidy. Historically, solar and wind developers have more experience adopting these arcane structures than the nuclear or geothermal industries, which have fewer projects under their belt.
Speaking at a Heatmap event on Thursday, Republican Senator John Curtis of Utah said he was still hopeful that the IRA would survive without significant cuts.
“I don’t think that makes it through the House,” he said when asked if the Ways and Means Committee could slash the IRA tax credits outright. “There’s a lot of insecurities in the Republican Party about not cutting and about where the boundaries are.”
We’ll have a much better sense of where those boundaries are soon.
Editor’s note: Updates to reflect Ways and Means delaying its markup.
And more of the week’s top news in renewable energy conflicts.
1. Hampden County, Massachusetts – Disgruntled residents in the small city of Westfield have won their fight against a Jupiter Power battery storage project.
2. Staten Island, New York – Speaking of people booing battery storage, the battle over BESS on Staten Island is potentially turning into major litigation.
3. Montgomery County, Maryland – County planners have approved a small solar farm on agricultural lands in the small D.C. exurb of Rockville surprising even the project’s developer Chaberton Energy.
4. Mecklenburg County, Virginia – A 90-acre RWE solar project has been rejected for the second time by county officials despite the developer slimming down the project size in response to local complaints.
5. Licking County, Ohio – The Ohio Supreme Court is allowing Open Road Renewables’ utility-scale Harvey Solar project to proceed over objections from angry neighbors.
6. Adams County, Illinois – It’s not all sunshine and roses in the Midwest though, as even a relatively tiny solar farm is struggling to get approval in rural Illinois.
7. Pierce County, Wisconsin – An AES utility-scale solar farm is getting significant pushback from surrounding residents over farmland impacts.
8. Dickinson County, Iowa – Invenergy has removed some turbines from its Red Rock Wind Energy Center in a bid to try and overcome a vocal contingent of opposition in the county.
9. Cedar County, Iowa – Elsewhere in the Hawkeye State, an Iowa farmer is suing Nordex claiming that a wind turbine fire damaged his wheat crop.
10. Lincoln County, Oklahoma – A battery storage facility proposed by Black Mountain is the subject of an investigative news article about opposition to BESS in Oklahoma.
11. Santa Barbara County, California – The backlash to the Moss Landing battery fire has now led the central coast city of Santa Maria to ban new battery storage facilities.