Save for later Print Download Share LinkedIn Twitter As the White House and congressional lawmakers form major infrastructure and economic recovery plans worth potentially trillions of dollars, policies aimed at accelerating the US transition to a lower-carbon economy are front and center. Having lost the race on solar photovoltaics early in the century to China, US policymakers argue they have an opportunity to better position domestic manufacturers for the energy transition. But partisanship in Washington runs high and presents a big obstacle. Some Republicans argue that putting the government's thumb on the scale of low-carbon technologies costs the US economy rather than enhances it, undercutting competitiveness on the global stage. US President Joe Biden's administration is making a play for the future of automobiles with investment in the electric vehicle (EV) sector, and the automobile industry is on board -- a stark difference to the first push for greater vehicle fuel economy under former President Barack Obama nearly a decade ago (PIW Feb.5'21). China -- despite an early domestic strategy for EVs -- doesn't dominate the international market, which has plenty of room for growth. Biden's Energy Secretary Jennifer Granholm said earlier this month the government is planning "billions of dollars" in direct or subsidized funding for EV manufacturing. The White House infrastructure plan, which could cost $3 trillion or more, is expected to include programs for a network of EV charging stations, something lawmakers have also added incentives for in the Clean Future Act in the House of Representatives. US policymakers are prioritizing the manufacture of battery packs that fuel EVs and the minerals needed to make them. Chinese firms largely control the minerals market -- and Beijing has a history of imposing export restrictions. Biden's policies may not be as flashy as former President Donald Trump's professed interest in buying Greenland for its minerals potential, but Granholm is touting plans to push battery costs down so EVs can reach parity with conventional internal combustion engine vehicles. The minerals are not rare in a geological sense, but China dominates what mining and manufacturing there is: Between 2015 and 2018, the US imported 80% of rare earth elements from China, and most of the remaining imports from other countries included Chinese components, according to the Congressional Research Service. "America is in a race against economic competitors like China to win the EV market -- and the supply chains for critical materials like lithium and cobalt will determine whether we win or lose," Granholm said. The Energy Department later announced $30 million in research funding to support a domestic supply chain for critical minerals such as lithium, cobalt and nickel. Existing legislation would extend tax breaks to miners in the US. Government incentives matter, but so does private-sector action: GM and LG are currently building a new battery cell plant in Ohio, with the former considering another in Tennessee. The Biden administration is also supporting carbon capture, which remains too expensive for commercial deployment but is necessary to keep greenhouse gas emissions within targets absent a sweeping electrification beyond what many analysts currently believe possible (PIW Mar.12'21). While progress on large-scale networked projects has been made in Europe, the technology remains nascent. The recently proposed bipartisan Scale Act in the US could see $4.9 billion invested in carbon capture over the next five years, and could be part of an infrastructure package. When it comes to competing internationally on building renewable power generation, US companies remain relatively quiet. Europe's oil majors have made forays into renewables, but US counterparts are less interested (PIW Oct.9'20). US utilities, meanwhile, are smaller relative to their European and Chinese counterparts, and often focused on regional plays at home. Washington supports overseas power generation in other ways, extending funding to contracting companies through the US International Development Finance Corp. and the Export-Import Bank.
