The Hill sweats Biden’s next move on electric cars

The Hill sweats Biden’s next move on electric cars

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Workers build a Ford Focus on the assembly line.

Workers build Ford Focus cars at a plant in Wayne, Mich., that’s slated for electrification. | Bill Pugliano/Getty Images

Is it better to vex members of Congress or America’s allies?

That’s the choice the Biden administration faces this week as it prepares to release guidance on who can qualify for the generous electric vehicle tax credits tucked inside the Inflation Reduction Act.

And some lawmakers across the political spectrum are increasingly concerned that President Joe Biden will cast aside their intentions in order to pursue his international priorities, write POLITICO’s E&E News reporters Timothy Cama and Hannah Northey.

Last year’s landmark climate law includes up to $7,500 in tax credits for each EV, but the full incentive is available only for cars and batteries assembled and largely produced in North America. Mineral components must be sourced from the U.S. or a free-trade partner.

The provision — which helped secure the critical vote of Democratic Sen. Joe Manchin of West Virginia — was intended to foster a domestic supply chain for EVs, reduce dependence on Chinese suppliers and create thousands of new jobs.

But it also angered European governments that complained the measure violates trade agreements by denying their companies access to the full tax credits. Companies in Europe have also threatened to leave the continent and open factories in the U.S., posing an existential threat to European industry.

An olive branch for Europe?
As Zack Colman scooped for POLITICO last week, the administration is holding out some hope for Europe to share in the EV bounty — though no such concessions are expected to make it into the draft guidance that the Treasury Department is set to announce by Friday.

Treasury hinted at such an approach in a white paper late last year, indicating it might bow slightly to European pressure by adopting an expansive definition of which countries have a “free trade agreement” with the United States. The U.S. and EU are in talks right now that could reach a limited trade deal.

Amid all this intrigue, even some strong Biden allies are questioning the administration’s transparency on its discussions with other countries about EV components.

Democratic Sen. Ron Wyden of Oregon, for example, said any critical minerals agreement should be made public before it’s signed.

Republicans have also aired concerns about the administration unilaterally drawing up trade agreements without congressional approval. And manufacturing and union lobbyists are warning that U.S. jobs could be at stake if they open the door to minerals from other countries.

It’s Tuesday — thank you for tuning in to POLITICO’s Power Switch. I’m your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [email protected]

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Today in POLITICO Energy’s podcast: Gloria Gonzalez breaks down the short- and long-term concerns from Puerto Ricans about the territory’s power infrastructure in the wake of Hurricane Fiona last year. Read the full story here.

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Duke Energy Corp. (solar); Georgia Power (power plant); Gerry Broome/AP Photo (transmission lines)

Deep freeze exposure
When several large electric utilities launched a first-of-its-kind energy trading platform in the Southeast last fall, the pitch was simple: Lower energy bills and deliver more solar power to customers, writes Miranda Willson.

Now, more than four months after the Southeast Energy Exchange Market began operating, some state regulators and energy analysts are skeptical that those benefits will be realized. Critics say a December deep freeze exposed the platform’s flaws.

Human rights violation?
A high-ranking international human rights court that only hears cases that raise a “serious question” will consider three challenges that accuse European governments of not doing enough to curb greenhouse gas emissions — the first such lawsuits to be reviewed by the powerful bench, writes Lesley Clark.

The European Court of Human Rights in Strasbourg, France, could order governments to speed up efforts to cut carbon dioxide. Such a ruling could set a precedent for determining whether government officials’ failure to act on climate change violates human rights.

Vehicle ban
EU ministers Tuesday formally — and finally — signed off on legislation phasing out sales of new polluting cars and vans by 2035, ending last-minute resistance from Germany and a small group of allies, writes Joshua Posaner.

The price for Tuesday’s agreement was a backroom deal last week between the European Commission and Berlin that will see extra technical legislation published later setting out a workaround for e-fuels — a synthetic, greener alternative to gasoline that nonetheless emits carbon dioxide from the tailpipe.

In Other News

Polluters pay: Australia took a historic step toward making big polluters accountable for their climate emissions.

Unintended consequences: Major oil companies are selling off their polluting assets to meet their climate goals, but local companies taking over are less equipped to manage risks.

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Vice President Kamala Harris visits the Vibration studio in Accra, Ghana, on March 27, 2023. Pin

Vice President Kamala Harris visits an artists’ studio in Ghana on Monday. | Misper Apawu/AP Photo

Vice President Kamala Harris is talking up the benefits of clean energy with the leaders of three African nations this week, but some won’t be persuaded.

The offshore wind industry could add an extraordinary 680 gigawatts of new power within five years — before losing momentum in a global supply chain crunch.

California state lawmakers passed a proposal by Gov. Gavin Newsom (D) aimed at preventing gas price spikes, all but ensuring it becomes law.

That’s it for today, folks! Thanks for reading.

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