NY Gov. Kathy Hochul last month vetoed a bill that could have expedited a huge wind farm in the Atlantic Ocean off Long Island. Her veto imperils not just the project, called Empire Wind, but New York State’s hopes to decarbonize its electric grid and validate its claim to national climate leadership.
I’ll argue here that a state or federal carbon price — one more substantial than the relative pittance of $15 per ton now being charged for electricity sector emissions under the RGGI compact — could have helped the developers beat back the NIMBYs whose rabble-rousing helped force Hochul’s hand. Let’s review the project and then explain how its difficulties are connected to the absence of robust carbon pricing.
Empire Wind Will Be Large
There will be 138 turbines, identical and gigantic. At 387 feet, each turbine blade will be the length of a football field including the end zones. The distance from water surface to blade tip at full height will be 886 feet, roughly the extent of two celebrated Manhattan towers that a century ago were the world’s tallest buildings: the 792-foot Woolworth Building (#1 from 1913 to 1930) and the 1,046-foot Chrysler Building (1930-1931). An even funner fact, from the developer’s spec sheet, is this: just one complete rotation by one turbine’s three blades will “power a New York home for about 1.5 days.”
The anticipated annual electrical generation from Empire Wind 1 and 2 combined is 7.25 TWh (or, if it’s easier, 7,250,000,000 kilowatt-hours),assuming a 40% yearly capacity factor. Here are four alternative ways of visualizing the significance of that output:
- Empire Wind’s 7.25 TWh is half again as great (i.e., 1.5x as large) as the entire production by New York State wind turbines in 2022 (that figure was 4.8 TWh);
- 7.25 TWh is 5 to 6 percent as great as all electricity generated from all state sources in 2022 (130.5 TWh);
- 7.25 TWh is one-sixtieth (1/60) as much as all U.S. wind-generated electricity last year (435 TWh), a figure that itself constituted a tenth of U.S. electricity production from all sources;
- 7.25 TWh is close to (12 percent less than) the average annual 2010-2019 output of either of the twin Indian Point reactors in suburban Westchester County that until their recent forced retirement were downstate New York’s lone large-scale source of carbon-free electricity. (The entire Indian Point station’s average annual output over its final decade, 2010-2019, was 16.5 TWh.)
Putting aside that last benchmark — which is intended as a reminder of the carbon disaster of shutting Indian Point (and a cautionary tale against shutting its West Coast doppelganger, Diablo Canyon) — Empire Wind looms large in New York state’s goal of attaining a 70 percent carbon-free grid in 2030.
The state’s 2022 carbon-free electricity share was just 48 to 49 percent, down from 60 percent in 2019, before Indian Point’s closure commenced. If Empire Wind’s output were available today, the statewide share would stand at 54 percent, indicating that this single (albeit two-part) project can close a quarter of the gap from the current clean percentage to the 2030 target.
Hochul and the NIMBYs
Along with infusing the grid with billions of clean kilowatt-hours, building and servicing Empire Wind 1 and 2 is expected to create 1,300 permanent onshore jobs — 300 to manufacture turbine components at the Port of Albany, and 1,000 in operation and maintenance at the South Brooklyn Marine Terminal, according to Equinor, the developer. These numbers, along with the clean electricity, ought to be catnip for any Democratic politician.
Why, then, did Hochul on Oct. 20 veto a bill that could have cleared the path for the Empire Wind 2 power cable to run under Long Beach and connect to the electric grid in Oceanside?
There’s no shortage of possible rationales. Long Island flipped from shaky blue to all red a year ago, as Democrats lost all four Congressional races and a number of state legislative seats while Hochul herself was outvoted there in her unnervingly close re-election. She may be seeking to preserve political capital for a possible renewed push to undo exclusionary zoning that that keeps housing in Nassau and Suffolk counties unaffordable for newcomers or those without generational wealth. Moreover, Empire Wind itself has faced financial headwinds due to supposed supply chain bottlenecks and spiraling financing costs, with the latter due in no small part to the regulatory delays.
Whatever the reasons, Hochul went all NIMBY-friendly. Her veto message faulted Equinor for running roughshod over Long Beach residents (see pull quote at left) rather than calling out the obstructionists for teeing up a replay of 2012’s Superstorm Sandy that devastated the very communities that now are clamoring for the wind project to go away.
In her message, the governor ignored the tinfoil-hat essence of most anti-wind opposition, which one observer, a former New York City chief climate policy advisor, characterized as combining “propaganda from the fossil fuel industry, rumor mongering in local communities, and basic nimbyism.” As NY Focus helpfully reported in Long Island Politicians Claim Victory for Hochul Wind Power Veto, objections to the Empire Wind farm and cables run the gamut from shopworn (ocean views sullied by turbines 15 miles offshore) to debunked (health-harming electromagnetic radiation from the power cables) to chronologically impaired (“We’ve had a huge number of [dead] whales that are showing up on our beaches,” a state senator fretted, yet not even a single offshore wind turbine has begun operating on the Atlantic Coast).
Entire cable route through Long Beach is underground. Yet NIMBYs are holding hostage a not-quite-in-their-backyard project that would more than double NY wind power production. Incidentally, I was born and grew up in a house on Washington Blvd, just a few blocks past the left edge of the map. Equinor map adapted by CTC.
Hochul and her staff seem unaware that there is no placating NIMBYs, whether their sights are trained on giant offshore wind projects or small-bore items like transit-friendly higher-rise housing or bike lanes. To the naysayers, any palpable change in their way of life is either Armageddon in itself or a pathway to purgatory. The only way to deal with them is to give pro-development, pro-change forces the strength to vanquish the NIMBYs outright — which is where carbon pricing comes in.
Would You Like $240 Million in (Annual) Carbon Benefits With Your Order?
Offshore wind’s chief virtue — in some respects, its true raison d’être — is its ability to take the place of dirty, fossil-fuel electricity generation in the grid. This asset is particularly salient in the case of Empire Wind, insofar as the downstate New York grid, with only modest interconnections to greener grids upstate or elsewhere, obtains more than 90 percent of its annual electricity by burning methane (“natural”) gas.
As a result, nearly every kilowatt-hour from Empire Wind will directly displace a kWh from burning fracked gas. And though the 90% share will decline when the new Champlain-Hudson Power Express transmission line enters service, perhaps in 2026, nearly all of the “incremental,” hour-by-hour power production actually avoided by generation from Empire Wind will still be gas-fired when the project’s two parts come on line in 2028 and 2029.
Now picture a federal or state carbon tax — or “price” if you prefer. Set it at $100 per metric ton (“tonne”) of CO2, which is both a round number and the level the Carbon Tax Center has been advocating since our inception, to be reached after a ramp-up taking half-a-dozen years. Now apply the carbon tax to the CO2 emitted from one kWh generated by burning gas. You’ll find that the carbon tax associated with each such kilowatt-hour is 3.9 cents.
Calculations: 659 x 10^6 tonnes (CO2 emissions from 2022 U.S. gas-fired electricity) divided by 1.689 x 10^12 kWh (U.S. electricity generated with gas in 2022) multiplied by 10^4 ¢ charged per tonne yields 3.90¢/kWh.
Let’s bring that figure down to earth: With a $100/ton (okay, tonne) carbon tax, each gas-fired kWh in competition with Empire’s offshore wind would cost 3.9 cents more to generate than at present. (To keep the discussion simple, I’ve refrained from counting an additional tax on methane.) We trim that to 3.3¢/kWh because the Regional Greenhouse Gas Initiative (RGGI) already charges a carbon price on fuels used to generate electricity in New York and neighboring states; in the most recent (September) quarterly auction, that price reached $13.85 per short ton, equivalent to $15.25 per metric ton, which we deduct from our aspirational $100/tonne carbon price to avoid double-counting, reducing it by just over 15 percent.
The hypothetical 3.3¢/kWh additional carbon charge for gas-generated electricity (stemming from the $100 carbon price) multiplied by Empire Wind’s 7.25 TWh annual output yields $240 million per year. Those dollars represent a first estimate of the additional annual revenue Equinor could have sought in its 2018 and 2020 bids responding to NYSERDA’s solicitations to prospective developers of offshore wind projects. With a robust NY carbon price, in other words, Equinor’s Empire Wind venture would enjoy a far higher profit margin.
Offshore Wind’s Missing Carbon Price
Imagine what Equinor might have done with $240 million a year in additional Empire Wind revenue. It could have banked, say, half that amount to offset the price escalation and higher interest costs that this year lowered its prospective profit margins and compelled it to appeal to NY State to grant a higher price for its production. (Incidentally, the NY Public Service Commission’s Oct. 12 order denying Equinor’s petition seeking renegotiation of its power contract with NYSERDA provides a good capsule summary of NY state offshore wind activity; it can be found via this link; search for Cases 15-E-0302 and 18-E-0071.)
The other $120 million, or a good chunk of it, could have been used — and might still be — to provide economic benefits to Long Beach and other communities that consider themselves “affected” by Empire Wind’s turbines or cables.
Empire Wind website paragraph about Taxes makes no mention of payments — voluntary or mandatory — to Long Beach and other communities.
As a thought-experiment, consider that $120 million distributed equally to Long Beach’s 11,700 households (assuming the city’s 35k population resides 3 per household) could provide recurring yearly dividends of around $10,000 per household, once the electricity began to flow. Perhaps more practical would be to set aside $75 million as a one-time payment to retire the so-called Haberman Judgment holding Long Beach financially responsible for blocking a proposed real-estate venture near the boardwalk and ocean beach several decades ago (see City of Long Beach 2023-2024 adopted budget, pages ii-iii).
Of course there are any number of other “improvements” that Long Beach, Island Park and Oceanside might elect to be funded by Equinor “payments in lieu of taxes.” I was surprised that Empire Wind’s online materials do not mention any such payments.
The idea is not to “win over” the NIMBYs — I consider that a fool’s errand — but to neutralize and politically overpower them by appealing to the larger community’s enlightened self-interest. Not so much the members of the Long Beach city council — who apparently (and astoundingly) went from 5-0 in favor of permitting the cable route to 0-5 between spring and fall of 2023 — but the citizenry that holds sway over them.
This isn’t the first time I’ve written about linking carbon pricing to big, hence potentially intrusive, green-energy projects. I struck that note in 2006, in Whither Wind, a long-form piece on wind and other green power for Orion magazine:
[I]if carbon fuels were taxed for their damage to the climate, wind power’s profit margins would widen, and surrounding communities could extract bigger tax revenues from wind farms. Then some of that bread upon the waters would indeed come back — in the form of a new high school, or land acquired for a nature preserve.
The urgency now is far greater. Today, as I was wrapping this post, the New York Times reported that the Danish offshore wind company Orsted is pulling out of a giant wind farm it was developing off New Jersey’s Atlantic coast, citing the same combination of faltering economics and local opposition (which of course weakens the economics further through delays) that is besetting Equinor and Empire Wind. Note too that even though Empire Wind 1’s interconnection to the grid, also under the seabed but through Brooklyn, is not (now) threatened, the economics will almost certainly kill Part 1 if Empire Wind 2 through Long Beach goes down.
Long-time CTC followers will recall my standing frustration over wind and solar entrepreneurs’ lack of interest in pushing carbon pricing. Efficiency gains, cost reductions and the magical appeal of green power would carry them over any and every threshold, they imagined. Will today’s NJ offshore wind defeat and the one looming in NY be enough to convince clean-power developers that they need a carbon tax every bit as much as the climate does?
Recycling helps recover valuable materials, cut waste, and support clean energy. With stricter sustainability rules, governments are pushing for greener solutions. EV companies are also focusing on battery recycling. This helps lower supply chain emissions and cut their carbon footprint.
Thus, battery recycling has become essential for a greener future. We have studied the Lithium-ion battery recycling report by the Chemical Abstracts Service aka CAS (a division of the American Chemical Society) and Deloitte. It provides insights into key growth drivers, emissions impact, and the current and future outlook of the market. Let’s dive in!
What’s Driving the EV Battery Recycling Market?
EV batteries have valuable metals, such as lithium, cobalt, and nickel. However, getting rid of them is difficult and this is where recycling comes in use. Thus, the rising need for these energy metals is the key driver for the EV battery recycling market.
This approach reduces waste, conserves resources, and supports a more sustainable supply chain. As demand for EVs grows, so does the need for efficient battery recycling to lessen reliance on mining.
Notably, strict environmental rules are also driving manufacturers to adopt greener practices. Advancements in recycling technology are helping recover more metal. This makes the process cheaper and better for businesses. On a global scale, many countries are promoting a circular economy.
Supply and demand gap for critical minerals
Asia-Pacific Leads in Battery Recycling
In 2023, Asia-Pacific led the battery recycling market. High EV adoption in China, Japan, and South Korea increased demand for recycling. The region produces many end-of-life batteries as a major EV and battery manufacturer.
Strong government support, incentives, and environmental awareness are driving growth. Investments in recycling technology and infrastructure further strengthen the region’s lead. This is evident from more patents than research papers.
Geographical distribution of publications in the field of lithium-ion battery (LIB) recycling
The Top Player: Brunp Recycling Technology
China’s Brunp Recycling Technology, a subsidiary of CATL, is a top player in battery recycling. The company focuses on four major areas of battery material development:
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Ultra-High Nickel: Increases nickel content while reducing cobalt to boost battery capacity.
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High Voltage: Raises the charging voltage limit while maintaining safety and performance.
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Intelligent Management: Uses digital tools and smart systems for efficient operations.
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Emerging Materials: Develop new materials for various applications, continuously improving energy density.
These advancements help improve battery performance, efficiency, and sustainability. Notably, Japan’s Sumitomo Metal Mining follows as another key company in this field.
Global Regulations Powering Battery Recycling
Governments are tightening laws to improve battery recycling. Policies like Extended Producer Responsibility (EPR) require manufacturers to handle waste management. EPR makes producers responsible for collecting and recycling their lithium-ion batteries. This encourages sustainable manufacturing and proper disposal.
New rules in the EU, U.S., and Asia are shaping the industry:
China’s Leadership
China introduced key recycling laws as early as 2016. In 2018, the Ministry of Industry and Information Technology (MIIT) set strict rules for battery handling, recycling traceability, and technical standards. The 2020 Solid Waste Pollution Law stopped waste imports and boosted recycling. Also, the Circular Economy Development Plan (2021-2025) prioritizes battery reuse. In 2024, MIIT suggested new standards for recycling waste batteries. They are now being reviewed.
EU Regulations
In 2023, the EU launched New Battery Regulations. These rules address the whole lifecycle of batteries, from design to end-of-life. By 2027, manufacturers must recover 50% of lithium from old batteries and 80% by 2031. Companies need to track their batteries’ carbon footprint and meet recycling content targets by 2025. Additionally, by 2027, a digital battery passport will improve transparency and traceability.
U.S. Policies
The Environmental Protection Agency (EPA) regulates lithium-ion battery (LIB) recycling under the Resource Conservation and Recovery Act (RCRA). In 2023, the U.S. issued federal guidelines clarifying how hazardous waste laws apply to LIBs. The EPA plans to introduce a dedicated LIB recycling policy by mid-2025.
India and South Korea are working on policies to support LIB recycling.
Making EVs Greener: Decarbonizing the Battery Supply Chains
The report has highlighted the most critical information on EVs. EVs have no tailpipe emissions. However, making their batteries does create a lot of carbon emissions.
- Lithium-ion battery production accounts for 40-60% of an EV’s total emissions.
Top automakers are now focusing on sustainable sourcing and recycling. As EV demand rises, battery recycling will be crucial for cutting carbon footprints and securing raw materials. And this is why regulators and investors are also pushing for cleaner supply chains.
Slashing Emissions and Saving Resources
Recycling lithium-ion batteries is much better for the environment than mining new metals. A study from Stanford University, published in Nature Communications, found that recycling creates less than half the emissions of traditional mining. It also uses only one-fourth of the water and energy.
The benefits are even bigger when recycling scrap from manufacturing. Scrap-based recycling created just 19% of the emissions, used 12% of the water, and needed only 11% of the energy compared to mining. Using less energy also means fewer air pollutants. So, battery recycling is a cleaner and smarter choice.
- The study concluded that recycling reduces greenhouse gas emissions by 58–81% and cuts water use by 72–88%.
The CAS report also published a 2023 study by Fraunhofer IWKS that evaluated the life-cycle environmental impact of three major battery recycling methods- Pyrometallurgy, Hydrometallurgy, and Direct recycling. The two significant deductions are:
- Recycling 1 kg of lithium batteries can reduce carbon emissions by 2.7 to 4.6 kg CO₂ equivalent.
- Direct recycling is the most effective method for the environment.
Life-cycle environmental impacts of different recycling routes of LIBs
Making Battery Recycling Profitable
Battery recycling has three phases: high-cost investment, break-even, and strong profits. Initially, recyclers invest heavily to set up facilities and meet regulations.
They can start making money by cutting costs, recovering valuable metals, and reducing waste. Costs depend on transport, labor, battery design, and recycling methods. Recyclers can stay profitable by automating tasks, lowering transport costs, and using advanced technology.
Batteries with valuable metals like cobalt and copper, such as NMC and NCA, offer quick returns. In contrast, LFP batteries provide better long-term benefits when reused before recycling.
Choosing the right recycling method—pyrometallurgy, hydrometallurgy, or direct recycling—can boost efficiency. Studies show recycling offers environmental benefits worth $3 to $11 per kWh. However, this also depends on carbon pricing and market trends.
Net recycling profit comparison
Subsequently, recyclers should focus on improving their processes. They also need to form partnerships to strengthen their business.
The Future of Battery Recycling: Turning Challenges into Opportunities
Battery recycling faces hurdles like high costs, complex processes, and inefficient collection. Various battery designs and hazardous materials add further challenges. New technology, digital tools, and teamwork in the industry are making recycling cheaper and easier.
Polaris Market Research reports the EV battery recycling market was $8.89 billion in 2023. It is set to grow from $11.09 billion in 2024 to $65.71 billion by 2032, with a 24.9% annual growth rate.
Digital Tools Improve Efficiency
Traditional recycling relies on slow, expensive, and unsafe manual processes. Digital tools are transforming this by tracking materials, automating sorting, and improving disassembly. These innovations enhance efficiency and help companies comply with strict regulations, reducing legal risks.
For example, digital twins optimize processes, blockchain ensures traceability and cloud platforms enable real-time tracking. Umicore uses AI and cloud solutions. CATL, on the other hand, uses blockchain to track materials.
Similarly, companies like Redwood Materials, BYD, and Toyota use AI to predict optimal recycling timelines.
The Power of Industry Collaboration
The disrupted supply chain remains a major challenge. In China, only 25% of retired EV batteries go through formal recycling channels. Companies are making batteries easier to recycle. They are also working together in the supply chain to solve this issue.
In October 2023, Stellantis and Orano teamed up to recycle EV batteries and factory scrap in Europe and North America. Such collaborations are driving a more sustainable and scalable battery recycling industry.
Similarly, last December Li-Cycle Holdings Corp. resumed its collaboration with Glencore International AG, (a subsidiary of Glencore plc). Both companies will evaluate the feasibility of building a new Hub facility in Portovesme, Italy that could potentially produce critical battery materials such as lithium, nickel, and cobalt from recycled battery content.
The post Are EVs Truly Green? How Battery Recycling is Powering a Cleaner Future appeared first on Carbon Credits.
Greenpeace is facing a $660 million lawsuit by Energy Transfer Partners. The verdict is more than a legal case; it could change the climate movement significantly. The lawsuit came from Greenpeace’s involvement in the protests against the Dakota Access Pipeline (DAPL). This project has been controversial for its environmental and social effects.
The talk about the verdict often centers on free speech. But its wider effects on climate activism and the fight against fossil fuels mustn’t be overlooked.
The Dakota Access Pipeline and Its Climate Impact
The Dakota Access Pipeline is 1,172 miles long. It has sparked many environmental protests since it was built. The pipeline transports crude oil from North Dakota to refineries in other parts of the country.
Environmentalists say this project worsens climate change. It helps with fossil fuel extraction and burning. The Standing Rock Sioux Tribe and other activists opposed the pipeline. They feared oil spills could contaminate water sources and harm ecosystems.
Fossil fuel projects like DAPL contribute significantly to global carbon emissions. The pipeline can transport 570,000 barrels of crude oil daily. When burned, this oil releases millions of metric tons of CO₂ into the air each year.
Greenpeace opposes these projects because of the need to shift from fossil fuels to renewable energy. However, this legal verdict against the organization raises concerns about the future of climate advocacy.
Greenpeace’s Role in Climate Advocacy
For decades, Greenpeace has led the fight for the environment. They challenge companies and governments to act more decisively against climate change. The organization has been key in raising awareness about deforestation, ocean conservation, and the risks of relying on fossil fuels.
In the case of the Dakota Access Pipeline, Greenpeace supported Indigenous-led protests and helped amplify concerns about the project’s long-term environmental consequences. Energy Transfer claimed that the organization defamed them and stirred up protests. However, Greenpeace says their actions aimed to hold fossil fuel companies accountable for climate damage.
Mads Christensen, Greenpeace International Executive Director, noted:
“We are witnessing a disastrous return to the reckless behaviour that fuelled the climate crisis, deepened environmental racism, and put fossil fuel profits over public health and a liveable planet. The previous Trump administration spent four years dismantling protections for clean air, water, and Indigenous sovereignty, and now along with its allies wants to finish the job by silencing protest. We will not back down. We will not be silenced.”
Legal Threats Against Climate Activists and Climate Movement
This lawsuit shows a trend. Fossil fuel companies are using legal action more often to fight against environmental opponents. Big companies often use lawsuits called Strategic Lawsuits Against Public Participation (SLAPPs) to stop activism. SLAPPs can cost environmental groups a lot of money. This makes it tough for them to keep working.
Greenpeace’s legal battles are not unique. In recent years, companies like Shell, TotalEnergies, and ENI have also pursued legal actions against Greenpeace and other environmental groups. These lawsuits worry people. This could affect climate activists’ fight against high-emission industries.
The ruling against Greenpeace could have a chilling effect on climate activism. Environmental groups might hold back from challenging big fossil fuel companies if they worry about expensive legal issues. This could slow down efforts to hold polluters accountable and push for stronger climate policies.
The case also raises questions about how fossil fuel companies may use legal systems to avoid scrutiny. Companies like Energy Transfer can shift the conversation from their carbon footprint to the activists. This way, they avoid addressing the environmental and climate concerns raised by these groups.
Fossil Fuel Expansion vs. Climate Goals
While global leaders urge cuts in greenhouse gas emissions, fossil fuel projects keep growing. The International Energy Agency (IEA) has warned that to keep global warming below 1.5°C, no new oil and gas projects should be approved. Yet, pipelines like DAPL show that people keep investing in fossil fuels. This focus delays the shift to cleaner energy options.
Greenpeace’s opposition to such projects aligns with the broader climate science consensus that urgent action is needed. However, this lawsuit shows how fossil fuel companies fight back. They shift the focus from environmental issues to legal battles.
The growth of fossil fuel industries, especially oil and gas, creates major issues for global climate goals. This is because they emit a lot of greenhouse gases (GHG).
In 2023, CO₂ emissions from fossil fuels hit a record 37.4 billion metric tons. This is a 1.1% rise from 2022. The chart shows the industry’s emissions in the U.S.
- Specifically, oil and gas operations are responsible for around 15% of total energy-related emissions globally, equating to approximately 5.1 billion metric tons of CO₂ equivalent annually.
Moreover, the oil refining industry also plays a big role in GHG emissions. They rose from 1.38 billion metric tons in 2000 to 1.59 billion metric tons in 2021.
Methane, a potent GHG, is also a major concern in the oil and gas sector. Oil and gas operations in the United States release more than 6 million metric tons of methane each year. This worsens climate change because methane traps heat much better than CO₂.
Burning fossil fuels for electricity and heat is the biggest source of global GHG emissions. It makes up 34% of the total. The industrial sector contributes 24% of global GHG emissions, primarily from on-site fossil fuel combustion for energy.
These stats highlight the urgent need for renewable energy. Companies must also adopt strict emission cuts to meet global climate goals.
A Precedent for Future Climate Activism?
This legal case could set a dangerous precedent. If other fossil fuel companies sue environmental groups, activism might become too expensive to continue. This would weaken one of the most powerful forces advocating for climate action.
Despite the setback, Greenpeace has vowed to continue its fight. The organization has filed an anti-SLAPP lawsuit against Energy Transfer in a Dutch court. They want to recover damages and legal costs from this case. The outcome of these legal battles could shape the future of climate advocacy and corporate accountability.
The $660 million verdict against Greenpeace is not just about free speech—it’s about the future of climate activism. As fossil fuel companies expand their legal tactics to counteract opposition, environmental organizations face increasing challenges in their fight for a sustainable future.
The post Greenpeace Faces $660 Million Verdict: A Turning Point for Climate Action? appeared first on Carbon Credits.
Carbon Footprint
Donald Trump Uses Emergency Powers to Boost U.S. Critical Mineral (and Coal?) Production
President Donald Trump has signed an executive order to ramp up U.S. production of critical minerals. The order uses emergency powers under the Defense Production Act to increase financing, streamline permits, and encourage domestic mining and processing of minerals vital for national security and economic growth.
The goal is to cut down on dependence on foreign suppliers, especially China. China leads the global supply chain for key minerals. The order has raised worries about its effect on the environment and how it matches climate goals.
What Are The Key Aspects of the Executive Order?
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Defense Production Act for Critical Minerals
The executive order authorizes the use of the Defense Production Act (DPA) to provide financial support to U.S. mining and mineral processing projects. This includes loans and investments from the U.S. International Development Finance Corporation (DFC) and the Department of Defense. The goal is to speed up the production of key minerals. This includes lithium, cobalt, nickel, rare earth elements, and maybe coal.
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Faster Permitting for Mining Projects
Trump’s order directs federal agencies to speed up the permitting process for new mining and processing facilities. The Department of the Interior has been tasked with prioritizing critical mineral production on federal lands. The administration wants to cut red tape. This will help private companies invest more in domestic mineral production.
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Expanding the Scope of Critical Minerals
The order lets the National Energy Dominance Council add uranium, copper, potash, and gold to the list of critical minerals. Additionally, there is speculation that coal could be included. This can potentially lead to increased production of fossil fuels under the guise of national security.
Why Is the U.S. Expanding Mineral Production?
The U.S. gets 70% of its rare earth minerals from China. This makes the supply chain weak for important industries like defense, electronics, and renewable energy. China has also imposed export controls on key materials like gallium and germanium. This further increases the urgency for the U.S. to secure its own resources.
Critical minerals are key for military use, particularly antimony. They support missile systems, fighter jets, and advanced communications technology. By expanding domestic production, the U.S. aims to strengthen its defense capabilities and reduce the risk of supply chain disruptions.
Lastly, lithium, cobalt, and nickel are crucial for battery storage, electric vehicles (EVs), and renewable energy infrastructure. Boosting local production of these materials can speed up the clean energy shift and cut down on fossil fuel use.
Global Market Trends and U.S. Critical Mineral Production and Consumption
The global demand for critical minerals has been on the rise, driven by the transition to clean energy technologies. In 2023, lithium demand surged by 30%, while nickel, cobalt, graphite, and rare earth elements also saw significant increases.
Investment in critical mineral mining grew by 10% in 2023; however, this was a slowdown compared to the 30% growth observed in 2022. This is partly due to declining prices putting pressure on producers.
The United States has significant mineral resources but remains heavily dependent on imports for many critical minerals. According to the U.S. Geological Survey’s 2024 Mineral Commodity Summaries, the U.S. was 100% import-dependent for 15 nonfuel mineral commodities and over 50% import-dependent for 49 such commodities.
For instance, aluminum consumption in 2024 reached 4.3 million metric tons, underscoring the nation’s reliance on external sources. For other minerals, refer to the following table for US 2023 consumption and production per USGS report.
Trump’s recent executive order targets several critical minerals, including:
- Rare Earth Elements (REEs): Essential for electronics, defense systems, and renewable energy technologies.
- Lithium: Vital for battery production in electric vehicles and energy storage systems.
- Nickel: Used in stainless steel and battery manufacturing.
- Cobalt: Important for battery electrodes.
- Graphite: Used in batteries and fuel cells.
Economic, Environmental, and Climate Implications
The EO has a significant impact on mining companies. Shares of U.S. mining companies surged following the announcement.
MP Materials, a rare earth miner, saw its stock rise by 4.6%, while coal producer Peabody Energy gained more than 2%. However, Australian and Chinese mining companies experienced stock declines, reflecting concerns over reduced demand for imported minerals.
The decision also has the potential to spur international trade conflicts. China and other major mineral-exporting nations may view this policy shift as a direct threat to their economic interests. This could lead to trade tensions and potential retaliatory measures, further complicating global supply chains.
Environmental Concerns and Climate Impacts
Mining and processing critical minerals contribute about 8% of global carbon emissions. Copper production emits 4.6 tonnes of CO₂ per tonne, while nickel ranges between 12 and 78 tonnes per tonne. However, these emissions do not negate clean energy benefits—EVs still produce half the lifecycle emissions of gasoline cars. Using low-carbon electricity can further lower these emissions.
Coal’s potential inclusion as a critical mineral raises concerns. Fossil fuels from federal lands accounted for nearly 25% of U.S. CO₂ emissions over a decade. Expanding mining on public lands risks habitat destruction and toxic contamination, with 22,500 abandoned mine sites already leaking harmful chemicals.
Securing critical minerals is key for national security and clean energy. Yet, experts also stress the need for sustainable practices. This includes recycling, improved mining tech, and carbon-cutting ideas. For example, using CO₂ to weaken rocks could make mining carbon-negative.
The Biden administration used the Defense Production Act before. This was to boost the production of battery materials in the U.S. The goal is to cut emissions and support renewable energy. In contrast, Trump’s order may list coal and other fossil fuels as critical minerals. This could slow down efforts for net-zero emissions and hurt global climate leadership.
Expanding fossil fuel extraction on federal lands may worsen climate change, undermining progress toward emission reduction targets.
Conclusion: A Double-Edged Sword?
Trump’s executive order to boost critical mineral production is a significant policy shift that aims to reduce dependence on foreign sources, enhance national security, and support key industries. However, the inclusion of coal and the potential rollback of environmental safeguards raises concerns about its impact on climate goals.
As the U.S. moves forward with this strategy, it must find a balance between securing essential minerals and ensuring sustainable, environmentally responsible development. The outcome of this policy will shape not only the country’s economic future but also its role in global efforts to combat climate change.
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Electricity demand surges, expanding both renewables and fossil fuels in 2024
Are EVs Truly Green? How Battery Recycling is Powering a Cleaner Future
CCL applauds 21 Republicans for supporting clean energy tax credit support
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Spanish-language misinformation on renewable energy spreads online, report shows
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The toxic gas flares fuelling Nigeria’s climate change – BBC News
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Why airlines are perfect targets for anti-greenwashing legal action
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