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Biden will enforce the Defense Production Act for EV battery materials

U.S. President Joe Biden has announced that he will release one million barrels of oil a day from the U.S. Strategic Oil Reserve in the next six months as part of the administration’s efforts to lower gasoline prices at the Eisenhower Executive Office Building in the South Court Auditorium. White House in Washington, USA, March 31, 2022.

Kevin Lamarque | Reuters

President Joe Biden will call for a Defense Production Act to boost domestic production of batteries for electric vehicles and long-term energy storage. It will also help the US reduce its dependence on foreign supply chains.

The president’s order could help companies receive government funding to conduct feasibility studies for projects that extract EV production materials, including lithium, nickel, cobalt, graphite and manganese.

The Defense Production Act enacted by President Harry Truman during the Cold War allows the president to use emergency authority to prioritize the development of specific materials for national production.

“The President will issue a directive authorizing the use of the Defense Production Act to ensure the production of critical materials in America to boost our clean energy economy,” the White House said in a statement Thursday.

The Department of Defense will impose authority using “standard environmental, labor, community and tribal consultations,” the White House said. The administration also said it is considering further use of the law to “ensure a safer, cleaner and more resilient energy for America.”

The transportation sector is one of the largest contributors to U.S. greenhouse gas emissions, accounting for about one-third of annual emissions. The transition from gas vehicles to EVs is seen as key to tackling human-induced climate change.

Demand for lithium has also increased as more car companies compete in the development of electric vehicles. Benchmark Mineral Intelligence estimates that by 2030, the increase in the number and size of batteries for electric vehicles could be more than 90% of the demand for lithium. And about 24% of new vehicles sold worldwide will be fully electric by 2030, according to forecasts from consulting firm AlixPartners.

“We are waiting to see the details of the president’s announcement, but the Biden administration is to be commended for its efforts to secure the production of critical minerals such as lithium here at home,” said Lithium Americas, a lithium development resource company. he told CNBC.

The administration in February unveiled a plan to allocate $ 5 billion to states to fund EV chargers over five years as part of a bilateral infrastructure package. The US is the third largest market for electric vehicles in the world, after China and Europe.

Read more about electric vehicles from CNBC Pro

Sierra Club President Ramón Cruz said in a statement that the organization “appreciates President Biden for taking steps to invest in clean energy and help lead the world further in transition.”

“However, it is essential to do this properly,” Cruz added. “We need to ensure that labor and environmental regulations are not sidelined, nor are crucial consultations with Tribal nations and communities that would be directly affected.”

The White House also on Thursday announced a new release of oil from its strategic reserves to help reduce gas prices and tackle inflation in the U.S. The announcement comes as Russia seeks to counter rising energy prices caused by the invasion of Ukraine.

– CNBC Cat Clifford and Pippa Stevens accompanied by reports.

Biden will enforce the Defense Production Act for EV battery materials

Source link Biden will enforce the Defense Production Act for EV battery materials

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