EV leaders want Biden to be more aggressive with Defense Production Act
Industry figures and environmental groups are urging President Biden to go beyond his initial use of the Defense Production Act (DPA) and seize the opportunity to build out supply chains and infrastructure to accelerate the transition away from fossil fuels.
The DPA, a Cold War-era law used by President Harry Truman, allows the president to prioritize the manufacturing of certain materials in the national interest.
The White House is using the law to promote the domestic production of rare-earth minerals used for electric vehicle (EV) batteries that would otherwise have to be imported from China. The White House announcement on the DPA this week specifically identifies minerals like nickel, lithium, cobalt and graphite.
Biden is leaning on the DPA amid growing fears about China’s economic power and supply chain problems that have contributed to inflation in the United States. It also comes as Russia’s war on Ukraine and subsequent sanctions on Moscow have exacerbated a spike in gas prices, putting a pinch on U.S. consumers and adding to the political problems for Democrats ahead of the midterm elections.
John DeMaio, CEO of EV battery materials processor Graphex Technologies, told The Hill the DPA would be of limited use to the industry without further adjustments.
“The DPA should be used to provide grants, tax breaks and facility construction incentives to all players in the EV battery space. It’s important that these economic supports are extended throughout the industry — including raw materials companies, materials processing companies, EV battery producers, and automakers,” DeMaio said in an email.
“A disjointed domestic supply chain does us no good — more available battery materials don’t aid EV automakers unless there is a matched increase in processing and battery production.”
The Biden administration’s announcement left the door open for further use but did not specify otherwise.
Advanced Energy Economy (AEE) Managing Director Harry Godfrey and AEE CEO Nat Kreamer also offered a number of more specific uses they’d like to see for the DPA. These include ramping up the production of polysilicon, which can be used for solar production and next-generation battery storage.
Equally useful, they said, would be using the DPA for heat pumps and induction cooktops, for both domestic use and to export to Europe, which would reduce the need for Russian energy.
“With accelerated production these can be deployed within next 9-12 months, so we’re not talking about a multi-year play,” they said in an email.
Biden invoked the law following urging from a number of members of Congress who have sharply criticized his energy policies in the past, including Sens. Joe Manchin (D-W.V.) and Bill Cassidy (R-La.).
“[E]nacting the DPA without addressing the bureaucratic logjam of permitting would be little more than symbolism,” Cassidy said in a statement Thursday. “We have to also streamline the permitting process that could delay any effort by years.”
Cassidy’s office also pointed The Hill to the Louisiana Republican’s March proposal calling for an energy production equivalent of Operation Warp Speed, the Trump administration’s 2020 initiative to rapidly develop a COVID-19 vaccine.
Conservation groups, meanwhile, urged the White House to think bigger in its use of the DPA—including some of the energy and climate priorities that have stalled out in Congress.
“I think it’s an area where there certainly could be more brainstorming — the transition to renewable energies and a carbon free economy is going to take a lot of creative thinking,” Aaron Weiss, deputy director at the Center for Western Priorities, told The Hill.
Although electric vehicles are less of an environmental hazard than fossil fuel production and use, Weiss added that Biden should consider using the law to address the environmental costs associated with their production as well.
“We know there’s also environmental risks whenever you’re talking about mining and production, so making sure that that is happening in a way that protects communities is going to be important,” he said.
Weiss also pointed to the infrastructure challenges that have presented an obstacle to widespread adoption of electric vehicles as a potential use of the DPA down the line.
“As you’re looking at more electrification, are there upgrades that need to happen to the grid? Are there other upgrades that need to happen substations or … to places like, like apartment complex and condos in order to support more charging infrastructure? You could see the DPA potentially becoming useful there,” he said.
Maya Golden-Krasner, deputy director and senior attorney at the Center for Biological Diversity’s Climate Law Institute, was less sanguine about the idea of mining as a sustainable solution.
“More drilling and more feasibility studies for the already unregulated and heavily subsidized mining industry isn’t really the solution that we’re looking for,” she told The Hill.
“We really want him to use the DPA to ramp up manufacturing of rooftop solar, clean transportation, heat pumps … he’s been talking about heat pumps and other renewable energy and energy efficiency technologies. Instead of invoking it, to fund feasibility studies for mining, [which] seems like blustering and not really getting to the solution,” she added.
Golden-Krasner called the initial use of the law “a huge missed opportunity to use the DPA for the things that are really needed to ramp up our renewable energy,” adding “it’s like Joe Manchin sat down and wrote this policy.”