Breaking: The Environmental Protection Agency just tightened standards for tiny, pervasive soot particles from construction sites, smokestacks, tailpipes, wildfires and other sources, Ben writes.

Why it matters: This form of air pollution is dangerous. It's linked to asthma, irregular heartbeats, bronchitis, even premature death in people with heart or lung disease, per the EPA.

State of play: The agency is imposing a new annualized exposure mandate for fine particulates of 9 micrograms per cubic meter (µg/m3), down from the current 12 µg/m3 requirement.

What they're saying: Environmental groups — a key Democratic political constituency — loudly cheered, calling it an important public health move.

But business groups, citing steady improvements in air quality, say ratcheting down requirements again would throttle development and jobs.

Zoom in: The agency estimates the rule will provide $46 billion in net health benefits in 2032, the earliest date that states must begin achieving the lower levels.

• These projected upsides in 2032 include up to 4,500 avoided premature deaths and 800,000 avoided cases of asthma symptoms.
• EPA says compliance costs are a tiny fraction of the benefit value. It rejects claims the rule hurts the economy, noting that since 2000, this pollution has fallen 42% while gross domestic product climbed 52%.

Yes, but: Many industries — petroleum, metals, mining, and forest and paper, to name just a few — allege dire economic outcomes from tougher mandates.

• A late 2023 letter to the White House warns of "permitting gridlock" and "no room" for further development — even climate-friendly infrastructure — in some areas.
• "For each level of increased stringency of the standards, the burdens on states and manufacturers increase exponentially," a suite of industry groups wrote.

The intrigue: This is among the most heavily lobbied EPA rules of the Biden era.

• Backers and critics held dozens of closed-door talks with White House and EPA staff to sway the outcome (check this "meetings" link).

Threat level: Multiple studies show people of color face higher exposure to fine particulates.

What we're watching: Potential litigation, and whether a potential Trump administration would seek to alter the rule, or stop defending it in court.

• When he was president, Trump officials decided not to lower the standards.

This chart shows improvements in lowering soot concentrations, but a significant number of places would not currently meet the new limits, Ben writes.

• It's a broad national snapshot based on 361 monitoring sites, so YMMV.

Yes, but: "EPA expects that 99% of U.S. counties will be able to meet the revised PM2.5 annual standard with actions already in place as of 2032," EPA said.

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🔋 LG Chem today announced a nearly $19 billion, 10-year deal to supply GM with cathode materials from a plant under construction in Tennessee, Ben writes.

• Why it matters: LG said it will provide GM with enough materials to support about 5 million EVs. It expands work between the companies. Go deeper.

📊 Ford's EV unit posted $4.7 billion in losses last year including $1.57B in the fourth quarter.

• Yes, but: Its wider Q4 profits report beat expectations and its stock jumped in after-hours trading.
• Why it matters: The earnings report yesterday was a window into how auto giants are navigating the challenging EV cost and sales environment — and resetting expectations.
• The big picture: Ford reported higher year-over-year sales of its F-150 Lightning pickup and Mustang Mach-E SUV, but it has also slowed EV investments and acknowledged that "mainstream customer adoption" of EVs lags earlier predictions. CNBC has more.

💵 Via the Associated Press, "Toyota says it will invest $1.3 billion at its huge factory complex in Georgetown, Kentucky, in part so it can build an all-new three-row electric SUV to be sold in the U.S."

⚖️ Republican attorneys general, in a letter to President Biden, preview potential litigation against the freeze on approving new LNG export permits, Ben writes.

• What's new: Nearly two dozen state AGs argue it runs afoul of Energy Department parameters for "public interest" reviews under the Natural Gas Act for exports to countries that lack free trade deals with the U.S.
• State of play: Among other accusations, it also says there's "liability under the Administrative Procedure Act for unreasonable delay."
• The other side: DOE, when announcing the pause and review, called the process "authorized by federal law," insisting it's acting within guidelines provided by Congress to weigh the public interest.

✍️ A wide array of green groups are using the pause to put fresh pressure on banks, insurers and private equity companies not to finance new and expanded LNG projects.

• What's new: Letters to banking giants are warning about risks to their reputations, finances, and the climate. They say Biden's move could have "significant impacts on the ability for LNG facilities and their parent companies to move forward with proposed projects still awaiting approval."
• Of note: Over 100 environmental and local groups like the Sierra Club and the Vessel Project of Louisiana sent letters to companies like Morgan Stanley, KKR, JPMorgan and others. They threaten "sustained resistance" against backers of LNG.

After venture capitalists burned mountains of cash on "clean tech" investments in the late aughts, the postmortems stressed that VC shouldn't be used as a substitute for project finance, Axios' Dan Primack reports.

Why it matters: VCs forgot the lesson, pumping billions into electric vehicle makers.

• Some of them never got to commercialization, or at least to delivery.
• Some went public, and have since seen their shares delisted or severely devalued.

State of play: One example of the former was Arrival, which had raised more than $100 million in VC funding before going public in 2021 via SPAC.

Rivian still is valued at around $15 billion, but that's a far cry from the $27.6 billion valuation it got in its Series F round.

What happened: Tesla, which is proving to be the exception to the rule.

• VCs, including those that passed on Tesla in its early days, looked at Elon Musk's success and assumed it could be replicated. Detroit by the Bay.
• Never mind that many of these VCs had never invested in complex manufacturing, let alone vehicle manufacturing.

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