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The vehicles are part of a pilot project aimed at trouble-shooting EV trucking.
Deep in the Inland Empire, the vast sprawl of suburbia that extends eastward from Los Angeles, the battery-powered semi trucks are about to start their run. They navigate the congested freeways of L.A. County to the ports of Long Beach and Los Angeles, load or unload, and then complete the round trip to trucking company NFI’s warehouse in Ontario, California. When the day’s run is done, the truck adjourns to the brand-new charging depot next door to fill up its battery for tomorrow’s trip.
These trucks are part of a project called the Joint Electric Truck Scaling Initiative, or JETSI. Funded by a handful of state sustainability agencies, the project aims to prove that electric power really can replace dirty diesel for trucking, at least for regional runs. Soon, about 100 electric trucks divided between two shipping companies will be driving around Southern California, delivering cargo while discovering just how challenging it will be for American trucking to run on battery power.
JETSI took a big leap toward its goal this week as NFI, one of two companies that will operate the electric semis, opened a 50-stall high-power charging depot next to its Ontario warehouse.
Jim O’Leary, vice president of fleet services at NFI, told me his company had already installed a handful of chargers and run a few EV semis as part of early initiatives such as the Daimler Innovation Fleet, a recent test project in which Freightliner EV semi drive hundreds of thousands of test miles. When California wanted a more ambitious test of electric trucking, he said, he thought NFI’s operations were an ideal match.
Electric semis still have a relatively short range and long recharge times, so battery power may not work for long-haul trucking — not for a while anyway. One of NFI’s core businesses, however, is “drayage,” or moving shipping containers on the back of semi trucks between a port and a warehouse. The current slate of EV trucks can make this 110- to 120-mile round trip before needing to recharge. Once they’re done, it takes 90 to 120 minutes to power up again.
“What we realized was going to be the sweet spot for electrification was this short haul, returning to the home base,” O’Leary said. “Electrification would be kind of perfect for that application.”
To streamline the operation, NFI was able to buy the plot of land next to its warehouse for the charging depot, negating the hassle of trucks making a separate trip to plug in. O’Leary said the company plans to install 1 megawatt of solar generating capacity on site. That’s not enough to charge the trucks on sun power, but it is enough to fill up the on-site batteries during the day when the trucks are out working, and then use the saved juice to help charge the vehicles later in the day when the sun has gone down.
While that sounds rosy, the purpose of a pilot project is to discover the pain points. With EV trucking, there are plenty. First: weight. The huge batteries needed to power a semi impart a serious weight penalty. Even though the state gives an extra allowance for zero-emission vehicles, O’Leary said (they may exceed the state’s weight limits by 2,000 lbs), they’re just not a great choice for carrying heavy cargo. That means shippers have to be careful about what they say they can move. “You can't really haul beverage like you would a diesel,” he said.
Maintenance is a question mark. As Heatmap has noted before, passenger EVs don’t need the same kind of basic upkeep as gasoline cars — no oil changes, no spark plug swaps. But because today’s EVs haven’t gotten old yet, we don’t know for sure how their components will age over a decade or two. The same is true for EV tractor-trailers. “We know that some of the wearables go away — the oil changes and the need to grease,” O’Leary said. But no one can be sure whether electric semis will save money on maintenance in the long term.
Then there’s the question of who’s going to fix them. A trucking company has enough certified mechanics on hand to repair run-down trucks and get them back on the road. Finding enough mechanics with the proper electrical safety certifications and know-how to repair EVs is no easy task.
The big one, of course, is the cost. NFI’s JETSI project cost $45 million all-in, O’Leary said, counting the land purchase, the chargers from Electrify America, the solar power equipment and backup batteries, the trucks, and everything else. California state agencies including California Air Resources Board, California Energy Commission, and South Coast Air Quality Management District gave money to fund this proof-of-concept, and California cap-and-trade dollars could contribute to electrifying the trucking industry in the future. But JETSI shows just how many hurdles are involved.
“I don’t want to say we were shortsighted, because I think you can’t be shortsighted when you undertake a project like this, and you're obviously looking to the future in some ways,” he said. “But I don’t think any of us, or our partners, realized the complexities that this project is going to have. Not only the complexities, but the capital investment that it takes to actually make a project like this work. And that’s where I think we are still a ways away from this being the norm.”
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Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.
The Fed on Wednesday issued a report showing substantial increases in the price of eggs, used cars, and auto insurance — data that could spell bad news for the renewables economy.
Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.
Renewable energy development is especially sensitive to higher interest rates. That’s because renewables projects, like wind turbines and solar panels, have to incur the overwhelming majority of their lifetime costs before they start operating and generating revenue. Developers then often fund much of the project through borrowed money that’s secured against an agreement to buy the resulting power. When the cost of borrowing money goes up, projects become less viable, with lower prospective returns sometimes causing investors not to go forward .
High interest rates have plagued the renewables economy for years. “As interest rates rise, all of a sudden, solar assets that are effectively bonds become less valuable,” Quinn Pasloske, a managing director at Greenbacker, a renewable investor and operating company, told me on Tuesday, describing how the stream of payments from a solar project becomes less valuable as rates rise because investors can get more from risk-free government bonds.
The new inflation data is “consistent with our call of an extended Fed pause, with only one rate cut in 2025, happening in June,” Morgan Stanley economists wrote in a note to clients. Bond traders are also projecting just a single cut for the rest of the year — but not until December.
Federal Reserve Chair Jerome Powell told the Senate Banking committee Tuesday, “We think our policy rate is in a good place, and we don’t see any reason to be in a hurry to reduce it further.”
The yield for the 10-year Treasury bond, often used as a benchmark for the cost of credit, is up 0.09% today, to 4.63%. While this is below where yields peaked in mid-January, it’s a level still well above where yields have been for almost all of the last year. When Treasury yields rise, the cost of credit throughout the economy goes up.
Clean energy stocks were down this morning — but so is the overall market. Because while high interest rates are especially bad for renewables, they’re not exactly great for anyone else.
Current conditions: Los Angeles is bracing for a massive rain storm that could trigger landslides in areas recently charred by severe wildfires • About 90% of districts in India have received little or no rainfall since the start of the year • Schools are closed in Kansas City, Missouri, where up to 6 inches of snow is expected today.
California’s state-backed insurance plan of last resort is short on funds to pay out claims from the Los Angeles wildfires. As a result, California Insurance Commissioner Ricardo Lara is asking private insurers that operate in the state to give the program, known as the FAIR Plan, $1 billion. The FAIR Plan is for people who can’t get private insurance coverage because their properties are considered high risk. As weather disasters get worse and private insurers pull back from the state, more people are relying on the FAIR Plan, and its policy load has doubled since 2020 to more than 452,000. The plan has received some 4,700 claims related to last month’s devastating fires, and paid out more than $914 million. But that’s not enough. The program expects a loss of $4 billion from the fires. This is the first time in 30 years that the program has needed to ask for more money. The fee will be divided between the private companies according to market share, and they’ll have 30 days to pay. Up to half of the cost can be passed on to their own policyholders. Even so, there are concerns that this will push private insurers to leave California to avoid further losses, exacerbating the state’s insurance crisis. State Farm, the state’s largest insurer, recently asked regulators to approve a 22% rate increase.
The U.S. added nearly 50% more clean energy capacity last year than in 2023, according to a new report from energy data company Cleanview. Most of the 48.2 gigawatts of new capacity came in the form of batteries and solar, with solar additions rising by 65%, mostly in southern states like Texas and Florida. As for battery storage, four states (California, Texas, Arizona, and Nevada) accounted for 70% of new capacity. Meanwhile, wind power missed out on growth, with capacity additions dropping by nearly a quarter year-over-year. The report says solar growth will likely slow down in 2025, battery storage could grow by nearly 70%, and wind capacity could grow by 80% if all planned projects manage to reach completion. One interesting tidbit is that Indiana is emerging as a solar hot spot. It ranks third on the list of states with the most solar additions planned for 2025, below Texas and California, but above Arizona. Of course, a lot will depend on the Trump administration.
Cleanview
Global air traffic rose by 10% to an all-time high last year, according to recent data from the International Air Transport Association. This means more aviation pollution. Air travel already accounts for 2.5% of global energy-related carbon dioxide emissions, and has contributed an estimated 4% to global warming. As Ben Elgin at Bloombergnoted, the rise in air travel comes as airlines fail to adopt “sustainable” aviation fuel at meaningful levels, with SAF accounting for a paltry 0.3% of commercial jet fuel production in 2024. “SAF volumes are increasing, but disappointingly slowly,” the IATA said in December. “Governments are sending mixed signals to oil companies which continue to receive subsidies for their exploration and production of fossil oil and gas.” Airlines are relying on SAF to curb their emissions, with many pledging to consume 10% SAF by 2030. But “even if airlines can somehow replace 10% of their fuel with lower-emitting alternatives by the end of the decade, those climate benefits would be wiped out by the industry’s expected growth,” wrote Elgin. Yesterday the Trump administration released a $782 million loan for a plant in Montana to turn waste fats into biofuel. The loan was originally finalized under the Biden administration.
The CEO of Ford Motor yesterday warned that the company could be forced to lay off workers if President Trump raises tariffs on Mexico and Canada, and guts Biden-era legislation that supported electric vehicle production. “A 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen,” Jim Farley said at a conference. He added that ending loans and subsidies for EV manufacturing projects would also put many Ford jobs at risk. The New York Times noted that his comments “offered a rare example of a corporate executive calling into question Mr. Trump’s policies or statements.”
Sales of electric vehicles were up 18% in January compared to the same time in 2024, but growth is slowing, according to research firm Rho Motion. Last month, 1.3 million EVs were sold worldwide. That’s down 35% from December’s numbers, and marks the third month in a row of slowing growth. China’s sales were down last month because of the Chinese New Year. Meanwhile, sales were up in Europe as new emissions standards came into effect. And in the U.S. and Canada, sales rose 22%. Rho Motion expects more than 20 million EVs will be sold this year.
$160 million – The amount raised in a Series B funding round by Chestnut Carbon. The startup focuses on planting trees and vegetation, and improving forest management practices to better remove carbon from the atmosphere. Chestnut will use this latest funding to build out afforestation projects — that is, planting trees in areas where, at least in modern times, forests have not existed.
Editor’s note: This story has been updated to clarify the nature of the Trump administration’s actions on funding for a Montana biofuels plant.
Chestnut Carbon announces a major new funding round on the heels of its deal with Microsoft.
The embattled nature-based carbon removal market got a significant show of support today as Chestnut Carbon announced a whopping $160 million Series B funding round, led by the Canada Pension Plan Investment Board. The startup focuses on planting trees and vegetation as well as on improving forest management practices to better remove carbon from the atmosphere.
This announcement comes on the heels of the company’s recent deal with Microsoft to remove over 7 million tons of carbon dioxide from the atmosphere over a 25-year period. That involves planting about 35 million native trees over about 60,000 acres. It’s Microsoft’s largest carbon removal contract in the U.S., and one of the largest domestic carbon removal projects period — including those that rely on engineered solutions such as direct air capture.
Chestnut aims to fill a void in the forest carbon removal space by employing a rigorous measurement, reporting, and verification framework that it claims leaves little room for accounting errors and greenwashing, offering a solution that, hopefully, the market can finally trust. So far it seems, investors are buying it.
Chestnut will use this latest funding to build out afforestation projects — that is, planting trees in areas where, at least in modern times, forests have not existed. “We’re buying this farmland — this is marginal pasture land — and we are turning that back into a native forest,” Chestnut’s chief financial officer, Greg Adams, told me. The company buys land that is ill-suited for farming due to factors such as acidic, alkaline, or nutrient-poor soil or a climate that’s hostile to food crops but works for certain tree species.
The startup began planting native tree species in Arkansas and Alabama in 2022, and has since expanded into Mississippi, Louisiana, Texas, and Oklahoma. There are a number of benefits to planting in the Southeast, Adams told me. For one, the region’s climate allows trees to grow particularly fast, leading to more immediate carbon benefits. Also, the area isn’t very wildfire-prone, but is extremely biodiverse — so if one species of tree falls victim to disease or blight, much of the forest is likely to remain unscathed. “We look to build a forest that, if you had a time machine and you went back 100 years, would look very similar to what was there 100 years ago,” Adams told me.
While planting trees isn’t particularly expensive, land acquisition is, and that’s what the majority of Chestnut’s Series B funding will go towards. Adams told me that owning the land also helps to “reinforce the permanent nature” of Chestnut’s carbon removals, since the company has 100% control over land management decisions.
Forest-based carbon offsets are famously prone to fraud and other accounting improprieties. A 2023 investigation showed that many rainforest carbon credits approved by Verra, a leading credit certifier, for instance, were essentially bogus.
Chestnut is well aware that past scandals have eroded trust in nature-based removal efforts and aims to counteract the industry’s dubious reputation. While Verra does certify Chestnut Carbon’s “improved forest management” credits, another entity called Gold Standard certifies the company’s afforestation credits.
In addition to aligning with Gold Standard’s methodology, Adams told me the team uses a number of tools to verify the amount of carbon that its trees remove, including one that the company invented itself, which has plotted every parcel of land in the lower 48 states. This tool uses public and private data to inform Chestnut whether a plot of land is suitable for afforestation. Then, given a hypothetical mix of trees and their space relative to each other, an algorithm determines how much CO2 they would capture and sequester over a 50-year period. After the digital work is done, foresters visit the proposed site and develop a more nuanced analysis that takes into account factors such as expected yield over a given period of time and various mortality risks.
“We sell carbon credits, but we ultimately sell reputational risk insurance, because these are voluntary,” Adams told me, saying he recognizes the fragile nature of the market at this stage. “I want to make sure that what we do is seen differently, in a positive way, and ultimately it’s not going to blow back in our customers’ faces.”