Can U.S. make EV batteries without China? Not yet.

China may have a 'lock on key parts' needed for
EV production. (Kumpan Electric photo, Unsplash)

When it comes to building electric cars, the industry may have to choose between tax incentives for buyers or minerals and parts from China, reports Jeff St. John of Canary Media. "Last week, the Biden administration released long-awaited proposed guidance for how it plans to enforce one of the most complex and controversial aspects of the electric vehicle incentives created by the Inflation Reduction Act: the requirement that the country's fast-growing EV and battery industries avoid using materials supplied by China, a geopolitical rival that has so far dominated clean energy manufacturing."

The requirement leaves companies that have "spent more than $100 billion establishing U.S.-based EV and battery factories. . . confronting the reality that, under the proposed rules, virtually none of the EVs they are currently manufacturing will still be eligible for the law's $7,500 federal tax credit as of 2025," St. John writes. "Under the proposed guidance from the Treasury Department, electric vehicles containing any battery component ​'manufactured or assembled by a foreign entity of concern' will no longer be eligible for the tax credit starting next year. In 2025, electric vehicles that ​'contain any critical minerals that were extracted, processed, or recycled' by a foreign entity of concern will no longer be eligible for the credit."

The ability of the U.S. to source all the critical minerals for lithium-ion EV batteries without doing business with China seems unlikely. "China has built a commanding lead in every step of the global EV supply chain, from the refining of minerals to the production of cathode and anode materials and the manufacture of battery cells and EVs," St. John reports. "Today, it's very difficult to find a lithium-ion EV battery that doesn't contain some portion of minerals or components processed or made in China or by a Chinese-based company."

Meanwhile, U.S. companies and partners from Europe and Asia are trying to catch up to China by "building domestic EV and battery manufacturing capacity," St. John explains. "They remain largely reliant on mineral and materials supply chains controlled by Chinese firms." 

Two companies aim to reduce emissions: One splits molecules and the other heads into the wind

Prototype of Electric Hydrogen’s humble electrolyzer, a.k.a. the
'unicorn' (Photo by Cassandra Klos, The Wall Street Journal)

One company is diving all-in to lessen greenhouse emissions with science-savvy and financial moxie. Another company, with a similar goal, revived an ancient transportation practice to change sea frieght pollution. What do they have in common? Both companies use water as a solution.

"Hundreds of companies have promised to produce large amounts of green hydrogen, but none have succeeded. Electric Hydrogen believes the secret to success is finding a better way to split a molecule, reports Amrith Ramkumar of The Wall Street Journal. "Investors believe it too. The company is the green hydrogen industry's first unicorn. It recently raised $380 million from backers including BP, United Airlines, Microsoft and iron-ore producer Fortescue Metals. That pushed it over the magical $1 billion mark."

The secret to splitting a water molecule with less greenhouse emissions is a better electrolyzer, Ramkumar writes. However, previous electrolyzers used too much energy and were costly. "Electric Hydrogen's secret sauce is new materials and designs," Ramkumar reports. "The company's engineers made all of the critical electrolyzer components in-house, following Tesla's model. By boosting performance, they drove down costs. . . . Electric Hydrogen plans to sell cheaper electrolyzers to hydrogen producers just like solar panel manufacturers sell panels to clean-energy developers."

The company will open its first electrolyzer factory in 2024, but the technology's "success or failure won't be known for years," Ramkumar reports. "As it ramps up supply and customers install the machines, get permits and connect the electrolyzers to green power. Gregory Constantine, chief executive of startup Air Company, which hopes to use hydrogen to make clean jet fuel, told him: "It's kind of like Netflix waiting for high-speed broadband and internet to get there. . . . When it does, it unlocks all of these other areas."

Photo by David Hurn via The Atlantic

Meanwhile, transportation is a polluter that needs better options. It's "responsible for nearly one-fifth of all the carbon emissions in the food system, and between 75% and 80% of all goods are transported via sea freight, which typically relies on container ships powered by dirty bunker fuel," reports Whitney Bauck of Ambrook Research. "Despite international agreements forged this summer to slash global shipping emissions by at least 20% by 2030, the past 10 years have shown 'no progress in terms of actual emission reductions' from the industry. . . . What's the solution? Bring back sailboats."

Sailing per-ton cost is far more than trade with traditional container ships; however, it is being successfully used for smaller, high-end niche sea trade. That still leaves huge commodity sea freight and all its polluting emissions, but the industry is working on other solutions. "Agricultural giant Cargill announced a collaboration with BAR Technologies, Mitsubishi Corporation, and Yara Marine Technologies to pilot WindWings, another form of wing sails that can be added to existing fuel-based cargo ships," Bauck writes. Jan Dieleman, president of Cargill ocean transport, told Bauck: "A retrofit solution that is capable of decarbonizing existing vessels through wind technology is a great place to start, given that 55% of the world's bulker fleet are up to nine years in age and most remain in service for decades. That's not just good for the planet — it's also good for the bottom line."

Corn growers told to keep vigilant for suspected seed thieves from China, other countries

Iowa corn growers are keeping a weary eye out for a Chinese attack. It's not a joke. Growers are being vigilant ever since seven Chinese nationals "were accused by U.S. authorities in 2013 of digging up seeds from Iowa farms and planning to send them back to China," Julia Edwards reports for Reuters. One of the nationals pleaded guilty in January to the crimes, which "has laid bare the value—and vulnerability—of advanced food technology in a world with 7 billion mouths to feed, 1.36 billion of them Chinese."

"The number of international economic espionage cases referred to the FBI is rising, up 15 percent each year between 2009 and 2014 and up 53 percent in 2015," Edwards writes. The FBI said most of the cases involve Chinese nationals. "In the agriculture sector, organic insecticide, irrigation equipment and rice, along with corn, are all suspected to have been targeted, including by Chinese nationals."

In response to threats "U.S. law enforcement officials are urging agriculture executives and security officers to increase their vigilance and report any suspicious activity," Edwards writes. "But on a March 30 visit to Iowa, Justice Department officials could offer little advice to ensure against similar thefts, underlining how agricultural technology lying in open fields can be more vulnerable than a computer network or a factory floor." The agricultural sector is basically being told to build fences and have guards, which many say are impractical solutions, "due to the high cost and impracticality of guarding hundreds of thousands of acres." Monsanto—one of the firms whose seeds were targeted—said it safeguards its genetically modified organism (GMO) technology by protecting its computers, patenting seeds and keeping fields unmarked." (Read more)

Major supplier to oil and gas industry to disclose 100 percent of its chemicals used in fracking

Photo by Todd Spoth, Houston Chronicle

Houston-based Baker Hughes, a major supplier to the oil and gas industry, said "it will begin disclosing 100 percent of the chemicals used in hydraulic fracturing fluid, with no exemptions for trade secrets," Kevin Begos and Matthew Daly report for The Associated Press. The company says it "believes it's possible to disclose 100 percent 'of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations,' to increase public trust."

Many companies already voluntarily disclose the contents of their fracking fluids through FracFocus.org, "but critics say the website has loose reporting standards and allows companies to avoid disclosure by declaring certain chemicals as trade secrets." In March, a U.S. Department of Energy task force said 84 percent of wells registered on the site invoked a trade secret exemption for at least one chemical.

Melanie Kania, a spokesperson for Baker Hughes, told AP that it will take several months for the new policy to take effect, and the end result will be a single list that "that provides 'all the chemical constituents' for frack fluids, with no trade secrets." (Read more)

Eight Chinese accused of stealing seed secrets

One of six Chinese nationals accused of traveling across the Midwest to steal trade secrets from U.S. seed manufacturers entered not-guilty pleas Monday in federal court in Des Moines, and a trial date was set for March 31, David Pitt reports for The Associated Press. Four of the other five are in China, which doesn't share an extradition agreement with the United States, and the fifth is in Canada. U.S. Attorney Nicholas Klinefeldt told Pitt that "all avenues are being considered to find and arrest" him.

Zhang Weiqiang

In a separate case, two Chinese scientists were indicted Dec. 20 in Kansas City "on federal charges accusing them of stealing seeds developed by a U.S. bioscience company and giving the seeds to members of a visiting delegation from China," AP reports. "A federal grand jury in Kansas indicted Weiqiang Zhang, an agricultural seed breeder at Ventria Bioscience's facility in Junction City, and Yan Wengui, a U.S. Department of Agriculture research geneticist in Arkansas, on one count each of conspiracy to steal trade secrets and theft of trade secrets."

Yan Wengui

"Zhang allegedly took seeds that his employer had grown and kept them at his home in Kansas," AP reports. "After a Chinese delegation visited the U.S., customs agents searched its luggage and found stolen seeds in envelopes and also in makeshift containers, including a newspaper page that had been folded in the shape of an envelope, according to court documents. If convicted, Zhang and Yan could face up to 10 years in federal prison and a fine of up to $250,000."

In the other case, "Prosecutors allege in court documents that the men were hiding the seed in a storage unit near Des Moines and eventually taking it to a farm near Monee, Ill., which the FBI said had been purchased by Kings Nower Seed in March 2012," Pitt writes. Kings Nower is a subsidiary of Beijing-based conglomerate DBN Group. One of the accused is the CEO of Kings Nower Seed. "Court documents filed Jan. 8 also show the government is attempting to seize the 40-acre Illinois farm that appears to have served as a Midwest base of operation for the Chinese men. It is about 40 miles south of Chicago." (Read more)

Indictments were announced on Dec. 19, with the six men "accused of traveling across the Midwest to steal millions of dollars in seed technology trade secrets for use at their China-based seed company," Emily Schettler reports for the Des Moines Register. "The men are accused of trying to steal a parent line of corn seed from Dupont Pioneer, Monsanto and LG Seeds and covertly transferring it to China. Federal prosecutors estimate its value at five to eight years of research worth at least $30 million to $40 million." (Read more)