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Talking to Google Geo’s vice president of sustainability, Yael Maguire.
While browsing Google Flights for an escape from the winter doldrums, I recently encountered a notification I hadn’t seen before. One particular return flight from Phoenix to New York was highlighted in light green as avoiding “as much CO2 as 1,400 trees absorb a day.”
I’d seen Google Flights’ emissions estimates before, of course — they’ve been around since 2021 — but this was the first time I’d seen it translate a number like “265 kg CO2e” into something I could actually understand. Suddenly, not picking the flight felt like it would have made me, well, kind of bad.
Yael Maguire, the vice president and general manager of the sustainability team at Google Geo — which includes Maps, Earth, and Project Sunroof, the company’s solar calculator — stressed that Google isn’t trying to take people’s agency away with these kinds of light-green guilt trips. “We want to make the sustainable choice the easy choice,” he told me, in reference to a slew of new tools the company has been rolling out, from fuel-efficient routing in Maps (which Google estimates has eliminated the emissions equivalent of 500,000 internal combustion cars from the road since 2021), to suggesting train routes to flight-shoppers, to nudging Europeans to ditch their cars when public transportation could get them to their destinations in a comparable amount of time.
Last week, I spoke to Maguire about the sustainability projects at Google Geo, including the team’s Solar API, which provides solar-planning data for millions of buildings worldwide. Our conversation has been lightly condensed for clarity and brevity.
Do you see your job at Google Geo as passively presenting sustainability information to users, or do you see it as actively nudging people toward making better choices for the planet?
We’re not trying to take agency away from anybody. We want to make sure — whether you’re a consumer choosing an eco-friendly route, or you’re a developer who’s thinking about trying to build more sustainably, or you’re a solar developer who wants to help with that — we want the choices to be in their hands. But we want to make it the easiest choice possible because, while it’s ultimately their decision, it will lead to carbon reductions over time.
That’s the idea behind fuel efficiency suggestions in Google Maps, where a route is prominently displayed with the little leaf, right?
Exactly. We launched a capability in Google Earth last year to help real estate developers do high-level planning and building development to make the sustainable choice the easy choice. As they’re saying, “We’re trying to get this many units with these kinds of amenities, etc., etc.,” we give them the tools to optimize for all the things they want to optimize for. But we can also say, “Hey, if you also care about sustainability, you can use different materials, we can get more sunlight in the area, and you have this much potential for solar.” And that just comes bundled with the tool itself.
We always try to find the co-benefits. I know for me personally, I always try to make the sustainable choice as much as I can. But I know that other people may not be as motivated by that, and having those co-benefits — like, it saves money, or it saves time, or it saves fuel, whatever it might be. We want to try to bring those together as much as possible.
When I was in Tbilisi, Georgia, a few months ago, I was using the ride-share app Bolt, and at the time it had a feature where if you tried to book a car to a location less than a 15-minute walk away, it would suggest you walk instead. I saw in a video from Google’s sustainability summit last fall that you’re rolling out something similar in some locations in Europe — France was one. Do you find these sorts of rollouts in the U.S. are stymied at all by how un-walkable most American cities are?
We are trying to make the most of cities as they are. They’re hard to change. But one of the things I find really encouraging is there’s definitely a long timeframe for this. Mayors and the folks in their departments of transportation recognize that they have to make more options available for people to commute and move around. They’re not necessarily going to be able to change things overnight. But there are major changes that are happening — for example, in the city of London, we were able to announce hundreds of miles of new bike lanes. So a lot of changes are happening over a relatively short amount of time, too.
Sometimes it’s hard to know what is going to be the impact of those decisions, though. And so, again, with these tools, city planners have the opportunity to scenario plan and say, “Okay, we’re thinking of trying to put bike lanes in this corridor in the city, what is going to be the impact on carbon?”
I wanted to ask a similar question in the context of a new feature that suggests train routes to Europeans looking for short-haul flights. How is Google thinking about promoting low-emissions transportation options like trains to Americans, eventually, when our infrastructure often isn’t there yet? Is this a challenge you talk about internally?
It is definitely something that is top of mind. But I do think even in the U.S., there are times when taking a train is actually faster. There are actually a lot of instances where walking, cycling, and public transportation are the most effective ways to get somewhere — and that’s not even considering the cost side of it, which is also something people might want to consider. I’m actually fairly optimistic — when I worked in San Francisco, I took public transportation, and I tried to walk as much as I can in all the cities that I’ve lived in, so I feel like I have lived experience in what the reality [in the U.S.] is. And some of these alternative options can be very effective. There’s more work to do, though, to make sure that we’re doing this globally.
Arguably, Google Maps could have a significant role to play in the success of the larger EV transition in terms of making charging stations and trip planning easy and handy for drivers. I’ve been working on planning my first EV road trip this summer and have been pretty intimidated, to be honest. Can you tell me what is in Google’s pipeline to help make this process easier for drivers?
I can’t talk about things that haven’t been announced yet, but I will say that, just as an overarching goal, we want to make that as easy as possible. I’m an EV owner, I have been for a number of years, and I know sometimes it can be a cognitive task to think about, “How am I going to charge and what is that experience going to be like?” So I would just say that we are really aware and trying to deeply understand the problem as much as possible, and our goal is to really address it.
Even when someone is thinking about purchasing a car, oftentimes people go to Google Search to look for vehicles, and we can help people understand what the potential is of a particular vehicle they’re considering. What typically concerns people is a long-distance trip. So we’ve made a tool where you can plug in a familiar destination — like for me, I live in San Francisco, it might be going to Tahoe— and for a given car you can see how many charges would you have to do on the way. Being able to make that info a little bit easier for people to see before they even buy the car is a thing that we’ve tried to do.
We’re also trying to make charging experiences as positive as possible. The first thing is, honestly, just getting as many chargers on the map as possible. There are a number of different providers who have charging infrastructure and sometimes all the data isn’t widely available so we’ve tried really, really hard to work with those partners. We have information on, I believe, 360,000 chargers worldwide and we’re constantly trying to grow that. On top of that — and I hope you don’t experience this — but not all the chargers work. You’ve probably seen on Google Maps, there are reviews, right? So there’s all kinds of work happening there.
My EV doesn’t have Google Maps integrated, unfortunately, but I’m really looking forward to one day having this feature where I can search for a charger along the route. We’d like to get to that point where you don’t actually have to do all this planning in advance and you can just get in your car and plan along the way like you would if it was another type of vehicle.
It’s one thing to have a tool like the Google Tree Canopy available for cities and organizers, and it’s another thing for people to actually use that tool and act on the information. How are you measuring your success?
We measure our success ultimately by what people do with our tools. So it’s not just about putting the tool out there. We actually try to understand what people are doing. In the case of what we did with eco-friendly routing, we worked with the National Renewable Energy Laboratory in the U.S., for example, to help validate our carbon emissions model. We’re going through that process for everything we do, whether it’s Project Sunroof or the Solar API, or other things like that.
You preempted my next question, but maybe you can talk about it in a more macro sense — Google has the goal of “collectively reducing 1 gigaton of carbon equivalent emissions annually by 2030” with tools like Solar API. Can you give me any sort of progress update?
This is a project that’s been going on for some time. We’ve been working with solar developers for a while, but we’ve been pleasantly surprised not only by the solar developer community engagement, but there’s actually other industries that have shown interest. So MyHEAT — they’re not a typical solar installer, but they’re finding this data really useful to go to cities and help them with the plans that they have.
So the gigaton goal itself, there is nothing to share now other than the progress on eco-friendly routing, but it is something that we hope we’ll be able to share progress on over time. But so far, we’re quite happy.
At a time when there’s a lot of nervousness around AI — and often for good reason — you’ve been pretty vocal in your excitement about how such tools can be used for the positive purposes of sustainability. Tell me why you’re an optimist.
Here’s why I’m an optimist: Because it’s where I put all of Google’s public goals in context. We talked about the gigaton goal, we talked about the Solar API — but I think this is also a question about energy usage and carbon intensity. We will continue to invest in the infrastructure that we need — and we need that infrastructure to be able to actually help solve some of these problems, by providing information to people — but at the same time, the company has been really focused on trying to minimize the carbon intensity of the energy we produce. So, since 2017, we’ve been operating off of 100% renewable energy; this is on an annualized basis. We also have an initiative to use carbon-free energy — so the source of the energy that ultimately goes where electrons are going to our data centers, we’re actively measuring what percentage of that is carbon-free on a 24/7 basis.
With our net-zero commitments, to be on a net basis by 2030, that includes all of our AI infrastructure. That’s where I would try to separate the energy use that’s required to operate AI from the carbon intensity, which I think is very different. Our data centers, we estimate, are one-and-a-half times more efficient than your average data center. And with AI workloads themselves, in some instances, we’ve been able to get the energy usage down by 100x, and the corresponding amount of carbon intensity down by 1,000x.
But to your point, at the same time, it is very much on our minds that the carbon intensity to run all of these AI workloads — how does that compare to the benefits that they’re able to provide? I think that’s where I am. I do have a lot of optimism about the efficiency work, about the trajectory of carbon-free energy and net zero. The upsides in terms of what it does for solar, what it does for transportation — yeah, I am a big believer.
The big reason why I’m so excited about this opportunity in the Maps and Geo space is I just think there’s so much opportunity for all kinds of organizations, including individual citizens, to make these choices and changes to their environment. And I think the role that AI has is enormous — obviously not the whole thing, because it doesn’t build cycling lanes. People have to go do that. People have to change policies around how buildings are going to have less carbon intensity when they’re built. There’s tons and tons of other work that is required to actually build the future that we want, that is lower carbon intensity — ideally zero. But I do think that AI plays an enormous role as decision support for all those choices that are needed in the future.
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A new report from the American Council for an Energy-Efficient Economy has some exciting data for anyone attempting to retrofit a multifamily building.
By now there’s plenty of evidence showing why heat pumps are such a promising solution for getting buildings off fossil fuels. But most of that research has focused on single-family homes. Larger apartment buildings with steam or hot water heating systems — i.e. most of the apartment buildings in the Northeast — are more difficult and expensive to retrofit.
A new report from the nonprofit American Council for an Energy-Efficient Economy, however, assesses a handful of new technologies designed to make that transition easier and finds they have the potential to significantly lower the cost of decarbonizing large buildings.
“Several new options make decarbonizing existing commercial and multifamily buildings much more feasible than a few years ago,” Steven Nadel, ACEEE’s executive director and one of the authors, told me. “The best option may vary from building to building, but there are some exciting new options.”
To date, big, multifamily buildings have generally had two flavors of heat pumps to consider. They can install a large central heat pump system that delivers heating and cooling throughout the structure, or they can go with a series of “mini-split” systems designed to serve each apartment individually. (Yes, there are geothermal heat pumps, too, but those are often even more expensive and complicated to install, especially in urban areas.)
While these options have proven to work, they often require a fair amount of construction work, including upgrading electrical systems, mounting equipment on interior and exterior walls, and running new refrigerant lines throughout the building. That means they cost a lot more than a simple boiler replacement, and that the retrofit process can be disruptive to residents.
In 2022, the New York City Housing Authority launched a contest to try and solve these problems by challenging manufacturers to develop heat pumps that can sit in a window just like an air conditioner. New designs from the two winners, Gradient Comfort and Midea, are just starting to come to market. But another emerging solution, central air-to-water heat pumps, also presents an appealing alternative. These systems avoid major construction because they can integrate with existing radiators or baseboard heaters in buildings that currently use hot water boilers. Instead of burning natural gas or oil to produce hot water, the heat pump warms the water using electricity.
The ACEEE report takes the cost and performance data for these emerging solutions and compares it to results from mini-splits, central heat pumps, geothermal heat pumps, packaged terminal heat pumps — all-in-one devices that sit inside a sleeve in the wall, commonly used in hotels — and traditional boilers fed by biogas or biodiesel.
While data on the newer technologies is limited, so far the results are extremely promising. The report found that window heat pumps are the most cost-effective of the bunch to fully decarbonize large apartment buildings, with an average installation cost of $9,300 per apartment. That’s significantly higher than the estimated $1,200 per apartment cost of a new boiler, but much lower than the $14,000 to $20,000 per apartment price tag of the other heat pump variations, although air-to-water heat pumps came in second. The report also found that window heat pumps could turn out to be the cheapest to operate, with a life cycle cost of about $14,500, compared to $22,000 to $30,000 for boilers using biodiesel or biogas or other heat pump options.
As someone who has followed this industry for several years with a keen interest in new solutions for boiler-heated buildings in the Northeast — where I grew up and currently reside — I was especially wowed by how well the new window heat pumps have performed. New York City installed units from both Midea and Gradient in 24 public housing apartments, placing one in each bedroom and living room, and monitored the results for a full heating season.
Preliminary data shows the units performed swimmingly on every metric.
On ease of installation: It took a total of eight days for maintenance workers to install the units in all 24 apartments, compared to about 10 days per apartment when the Housing Authority put split heat pump systems in another building.
On performance: During the winter, while other apartments in the building were baking in 90-degree Fahrenheit heat from the steam system, the window unit-heated apartments maintained a comfortable 75 to 80 degree range, even as outdoor temperatures dropped to as low as 20 degrees.
On energy and cost: The window unit-heated apartments used a whopping 87% less energy than the rest of the building’s steam-heated apartments did, cutting energy costs per household in half.
On customer satisfaction: A survey of 72 residents returned overwhelmingly positive feedback, with 93% reporting that the temperature was “just right” and 100% reporting they were either “neutral” or “satisfied” with the new units.
The Housing Authority found that the units also lowered energy used for cooling in peak summer since they were more efficient than the older window ACs residents had been using. Next, the agency plans to expand the pilot to two full buildings before deploying the units across its portfolio. The pilot was so successful that utilities in Massachusetts, Vermont, and elsewhere are purchasing units to do their own testing.
The ACEEE report looked at a handful of air-to-water heat pump projects in New York and Massachusetts, as well, only two of which have been completed. The average installation cost per apartment was around $13,500, with each of the buildings retaining a natural gas boiler as a backup, but none had published performance data yet.
Air-to-water heat pumps have only recently come to market in the U.S. after having taken off in Europe, and they don’t yet fit seamlessly into the housing stock here. Existing technology can only heat water to 130 to 140 degrees, which is hot enough for the more efficient hot water radiators common in Europe but too cold for the U.S. market, where hot water systems are designed to carry 160- to 180-degree water, or even steam.
These heat pumps can still work in U.S. buildings, but they require either new radiators to be installed or supplemental heat from a conventional boiler or electric resistance unit. The other downside to an air-to-water system is that it can’t provide cooling unless the building is already equipped with compatible air conditioning units.
One strength of these systems over the window units, however, is that they don’t push costs onto tenants in buildings where the landlord has historically paid for heat. They also may be cheaper to operate than more traditional heat pump options, although data is still extremely limited and depends on the use of supplemental heat.
It’s probably too soon to draw any major conclusions about air-to-water systems, anyway, because new, potentially more effective options are on the way. In 2023, New York State launched a contest challenging manufacturers to develop new decarbonized heating solutions for large buildings. Among the finalists announced last year, six companies were developing heat pumps that could generate higher-temperature hot water and/or steam. One of them is now installing its first demonstration system in an apartment building in Harlem, and two others have similar demonstrations in the works.
The ACEEE report also mentions a few other promising new heat pump formats, such as an all-in-one wall-mounted heat pump from Italian company Ephoca. It’s similar to the window heat pump in that it’s contained in a single device rather than split into an indoor and outdoor unit, so it doesn’t require mounting anything to the outside of the building or worrying about refrigerant lines, although it does require drilling two six-inch holes in the wall for vents. These may be a good option for those whose windows won’t accommodate a window heat pump or who don’t like the aesthetics. New York State is also funding product development for better packaged terminal heat pumps that could slot into wall cavities occupied by less-efficient packaged terminal air conditioners and heat pumps today.
Gradient and Midea are not yet selling their cold-climate window heat pumps to the general public. Gradient brought a version of its technology for more moderate climates to market in 2023, which was only suitable for heating at outdoor temperatures of 40 degrees and higher. But the company has discontinued that model and is focusing on an “all-weather” version designed for cold climates, which is the one that has been installed in the New York City apartments. Neither company responded to my inquiry about when their heat pumps would be available to consumers.
One big takeaway is that even the new school heat pumps designed to be easier and cheaper to install have higher capital costs than buying a boiler and air conditioners — a stubborn facet of many climate solutions, even when they save money in the long run. Canary Media previously reported that the Gradient product would start at $3,800 per unit and the Midea at $3,000. Experts expect the cost to come down as adoption and demand pick up, but the ACEEE report recommends that states develop incentives and financing to help with up-front costs.
“These are not just going to happen on their own. We do need some policy support for them,” Nadel said. In addition to incentives and building decarbonization standards, Nadel raised the idea of discounted electric rates for heat pump users, an idea that has started to gain traction among climate advocates that a few utilities have piloted.
“To oversimplify,” Nadel said, “in many jurisdictions, heat pumps subsidize other customers, and that probably needs to change if this is going to be viable.”
Current conditions: Two people are missing after torrential rains in Catalonia • The daily high will be over 115 degrees Fahrenheit every day this week in Baghdad, Iraq • The search for victims of the Texas floods is paused due to a new round of rains and flooding in the Hill Country.
Homeland Security Secretary Kristi Noem defended the Federal Emergency Management Agency after The New York Times reported it failed to answer nearly two-thirds of the calls placed to its disaster assistance line by victims of the Central Texas floods. Speaking on NBC’s Meet the Press on Sunday, Noem repudiated reports by the Times and Reuters that her requirement that she personally approve expenses over $100,000, as well as the deployment of other critical resources, created bottlenecks during the crucial hours after the floodwaters receded. “Those claims are absolutely false,” she said.
Noem additionally denied reports that FEMA’s failure to renew the contracts of call-center contractors created a slowdown at the agency. Per the Times’ reporting, FEMA allowed its call center contract extension to expire on the night of July 5, in the midst of the unfolding disaster. During the day on July 5, FEMA answered the calls of 99.7% of survivors seeking one-time assistance for their immediate needs, the Times’ reporting shows; after FEMA failed to renew the contracts and hundreds of contractors were fired, the answer rate dropped to just 35.8% on July 6, and 15.9% on July 7. “Those contracts were in place, no employees were off of work,” Noem told Meet the Press. (Reuters reports that an internal FEMA document shows Noem approved the call center contracts as of July 10.)
At least 120 people died in the flash floods in Texas’ Hill Country over the Fourth of July weekend, with more than 160 people still missing. FEMA has fired or bought out at least 2,000 full-time employees since the start of the year, though since the floods, the Trump administration has reframed its push to “abolish” FEMA as “rebranding” FEMA, instead.
The Trump administration last week fired the final handful of employees who worked at the Office of Global Change, the division of the State Department that focused on global climate negotiations. Per The Washington Post, the employees were the final group at the department working on issues of international climate policy, and were part of bigger cuts to the agency that will see nearly 3,000 staffers out of work. “The Department is undertaking a significant and historic reorganization to better align our workforce activities and programs with the America First foreign policy priorities,” the State Department told the Post in a statement about the shuttering of the office.
Grand Canyon Lodge employees pictured on July 20, 1930. NPS/George Grant
The historic Grand Canyon Lodge burned down in the nearly 6,000-acre Dragon Bravo Fire in Arizona over the weekend. The rustic lodge, located on the Canyon’s remote North Rim, had stood since 1937, when it was rebuilt after a kitchen fire, and was the only hotel located inside the boundaries of the national park.
Arizona Governor Katie Hobbs called for an investigation into the National Park Service’s handling of the fire, which destroyed an additional 50 to 80 structures on the park’s North Rim. “An incident of this magnitude demands intense oversight and scrutiny into the federal government’s emergency response,” she said, adding that “Arizonans deserve answers for how this fire was allowed to decimate the Grand Canyon National Park.” The Dragon Bravo Fire is one of two wildfires burning on the park’s north side and began after a lightning strike on July 4. The famous Phantom Ranch, located inside the canyon, and popular Bright Angel Trail and Havasupai Gardens, were also closed to hikers as of Sunday due to the fires.
Late last week, the local government of Nantucket reached a settlement with GE Vernova for $10.5 million to compensate for the tourism and business losses that resulted from the July 2024 turbine failure at Vineyard Wind 1. The town will use the money to establish a Community Claims Fund to provide compensation to affected parties.
The incident involved a 350-foot blade from a GE Vernova turbine that split off and fell into the water during construction of Vineyard Wind. Debris washed up onshore, temporarily closing some of the Massachusetts island’s iconic beaches during the height of tourist season. “The backlash was swift,” my colleague Emily Pontecorvo reported at the time. “Nantucket residents immediately wrote to Nantucket’s Select Board to ask the town to stop the construction of any additional offshore wind turbines.” Though significant errors like blade failures are incredibly rare, as my colleague Jael Holzman has also reported, the disaster could not have come at a worse time for Vineyard Wind, which subsequently saw its expansion efforts stymied by the Trump administration.
Nineteen states and the territory of Guam moved last week to intervene in a May lawsuit claiming the Trump administration has violated young people’s right to good health and a stable environment. The original complaint was filed in May by 22 plaintiffs represented by Our Children’s Trust — the same Oregon group that brought Held v. Montana, which successfully argued that the state violated young people’s constitutional right to a clean and healthful environment, as well as the groundbreaking climate case Juliana v. United States, which the Supreme Court declined to hear this spring.
In the new Montana-led move, the coalition of states represented by their respective attorneys general is seeking to join the lawsuit as defendants. Per Our Children’s Trust, the plaintiffs will file a formal response to the motion to intervene in the coming weeks.
More than half of all the soybean oil produced in the United States next year will be used to make biofuel, according to a new outlook by the U.S. Department of Agriculture.
Editor’s note: This story has been updated to reflect the current state of the youth climate lawsuit.
The multi-faceted investment is defense-oriented, but could also support domestic clean energy.
MP Materials is the national champion of American rare earths, and now the federal government is taking a stake.
The complex deal, announced Thursday, involves the federal government acting as a guaranteed purchaser of MP Materials’ output, a lender, and also an investor in the company. In addition, the Department of Defense agreed to a price floor for neodymium-praseodymium products of $110 per kilogram, about $50 above its current spot price.
MP Materials owns a rare earths mine and processing facility near the California-Nevada border on the edges of the Mojave National Preserve. It claims to be “the largest producer of rare earth materials in the Western Hemisphere,” with “the only rare earth mining and processing site of scale in North America.”
As part of the deal, the company will build a “10X Facility” to produce magnets, which the DOD has guaranteed will be able to sell 100% of its output to some combination of the Pentagon and commercial customers. The DOD is also kicking in $150 million worth of financing for MP Materials’ existing processing efforts in California, alongside $1 billion from Wall Street — specifically JPMorgan Chase and Goldman Sachs — for the new magnet facility. The company described the deal in total as “a multi-billion-dollar commitment to accelerate American rare earth supply chain independence.”
Finally, the DOD will buy $400 million worth of newly issued stock in MP Materials, giving it a stake in the future production that it’s also underwriting.
Between the equity investment, the lending, and the guaranteed purchasing, the Pentagon, and by extension the federal government, has taken on considerable financial risk in casting its lot with a company whose primary asset’s previous owner went bankrupt a decade ago. But at least so far, Wall Street is happy with the deal: MP Materials’ market capitalization soared to over $7 billion on Thursday after its share price jumped over 40%, from a market capitalization of around $5 billion on Wednesday and the company is valued at around $7.5 billion as of Friday afternoon.
Despite the risk, former Biden administration officials told me they would have loved to make a deal like this.
When I asked Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, whether he wished he could’ve overseen something like the DOD deal with MP Materials, he replied, “100%.” I put the same question to Ashley Zumwalt-Forbes, a former Department of Energy official who is now an investor; she said, “Absolutely.”
Rare earths and critical minerals were of intense interest to the Biden administration because of their use in renewable energy and energy storage. Magnets made with neodymium-praseodymium oxide are used in the electric motors found in EVs and wind turbines, as well as for various applications in the defense industry.
MP Materials will likely have to continue to rely on both sets of customers. Building up a real domestic market for the China-dominated industry will likely require both sets of buyers. According to a Commerce Department report issued in 2022, “despite their importance to national security, defense demand for … magnets is only a small portion of overall demand and insufficient to support an economically viable domestic industry.”
The Biden administration previously awarded MP Materials $58.5 million in 2024 through the Inflation Reduction Act’s 48C Advanced Energy Project tax credit to support the construction of a magnet facility in Fort Worth. While the deal did not come with the price guarantees and advanced commitment to purchase the facility’s output of the new agreement, GM agreed to come on as an initial buyer.
Matt Sloustcher, an MP Materials spokesperson, confirmed to me that the Texas magnet facility is on track to be fully up and running by the end of this year, and that other electric vehicle manufacturers could be customers of the new facility announced on Thursday.
At the time MP Materials received that tax credit award, the federal government was putting immense resources behind electric vehicles, which bolstered the overall supply supply chain and specifically demand for components like magnets. That support is now being slashed, however, thanks to the One Big Beautiful Bill Act, which will cancel consumer-side subsidies for electric vehicle purchases.
While the Biden tax credit deal and the DOD investment have different emphases, they both follow on years of bipartisan support for MP Materials. In 2020, the DOD used its authority under the Defense Production Act to award almost $10 million to MP Materials to support its investments in mineral refining. At the time, the company had been ailing in part due to retaliatory tariffs from China, cutting off the main market for its rare earths. The company was shipping its mined product to China to be refined, processed, and then used as a component in manufacturing.
“Currently, the Company sells the vast majority of its rare earth concentrate to Shenghe Resources,” MP Materials the company said in its 2024 annual report, referring to a Chinese rare earths company.
The Biden administration continued and deepened the federal government’s relationship with MP Materials, this time complementing the defense investments with climate-related projects. In 2022, the DOD awarded a contract worth $35 million to MP Materials for its processing project in order to “enable integration of [heavy rare earth elements] products into DoD and civilian applications, ensuring downstream [heavy rare earth elements] industries have access to a reliable feedstock supplier.”
While the DOD deal does not mean MP Materials is abandoning its energy customers or focus, the company does appear to be to the new political environment. In its February earnings release, the company mentioned “automaker” or “automotive-grade magnets” four times; in its May earnings release, that fell to zero times.
Former Biden administration officials who worked on critical minerals and energy policy are still impressed.
The deal is “a big win for the U.S. rare earths supply chain and an extremely sophisticated public-private structure giving not just capital, but strategic certainty. All the right levers are here: equity, debt, price floor, and offtake. A full-stack solution to scale a startup facility against a monopoly,” Zumwalt-Forbes, the former Department of Energy official, wrote on LinkedIn.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The issue with developing that “midstream” industry, Jacquez told me, is that China’s world-leading mining, processing, and refining capacity allows it to essentially crash the price of rare earths to see off foreign competitors and make future investment in non-Chinese mining or processing unprofitable. While rare earths are valuable strategically, China’s whip hand over the market makes them less financially valuable and deters investment.
“When they see a threat — and MP is a good example — they start ramping up production,” he said. Jacquez pointed to neodymium prices spiking in early 2022, right around when the Pentagon threw itself behind MP Materials’ processing efforts. At almost exactly the same time, several state-owned Chinese rare earth companies merged. Neodymium-praseodymium oxide prices fell throughout 2022 thanks to higher Chinese production quotas — and continued to fall for several years.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate out away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The combination of whipsawing prices and monopolistic Chinese capacity to process and refine rare earths makes the U.S.’s existing large rare earth reserves less commercially viable.
“In order to compete against that monopoly, the government needed to be fairly heavy handed in structuring a deal that would both get a magnet facility up and running and ensure that that magnet facility stays in operation and weathers the storm of Chinese price manipulation,” Zumwalt-Forbes said.
Beyond simply throwing money around, the federal government can also make long-term commitments that private companies and investors may not be willing or able to make.
“What this Department of Defense deal did is, yes, it provided much-needed cash. But it also gave them strategic certainty around getting that facility off the ground, which is almost more important,” Zumwalt-Forbes said.
“I think this won’t be the last creative critical mineral deal that we see coming out of the Department of Defense,” Zumwalt-Forbes added. They certainly are in pole position here, as opposed to the other agencies and prior administrations.”