European lawmakers' decision to bless some natural gas plants and nuclear power as climate-friendly energy sources signals the high priority countries are placing on securing energy supplies to replace Russian fossil fuels, Andrew writes.

Catch up fast: The European Parliament yesterday voted to classify certain uses of natural gas and nuclear power as green, or climate-friendly energy sources, in its taxonomy for sustainable activities.

• The controversial move encourages the private sector to continue to invest in such energy sources.

Why it matters: Russia’s unprovoked invasion of Ukraine has set off a scramble in Europe to secure natural gas supplies ahead of next winter and for many years to come, with planning underway to build more than a dozen new liquefied natural gas (LNG) terminals.

• While natural gas, sometimes referred to as fossil gas, is a cleaner-burning fuel compared to coal, it emits planet-warming greenhouse gasses during drilling, transport, and when it is burned for energy.

Context: Lawmakers are maintaining their rapid timetable for an energy transition away from fossil fuels, and putting some guardrails around natural gas projects.

• Gas-fueled power plants will need to meet certain emissions criteria in order to be referred to as sustainable investments and need to switch to low-carbon gases, such as hydrogen, by 2035.
• The EU still aims to cut its greenhouse gas emissions by “at least 55%” by 2030 and be carbon neutral by 2050.

Zoom in: Since the first of the year, European natural gas prices have skyrocketed by about 700%, according to Kevin Book, managing director of ClearView Energy Partners.

• To cut prices, many European countries are seeking energy deals for LNG shipments from the U.S. and elsewhere.
• “What I think we're seeing is a divergence between rhetoric and realpolitik,” Book told Axios. “Some of the governments that have espoused very green values are also signing 20-year contracts for LNG.”
• Such lengthy contracts run counter to Europe's goals of cutting greenhouse gas emissions.

The intrigue: A concern for limiting global warming is avoiding so-called lock-in, or committing to new fossil fuel infrastructure for decades.

• Gernot Wagner, a climate economist at Columbia Business School, points out that so far, Europe has chosen to both pursue more fossil fuel infrastructure and to “double down on ambitious climate policies.”
• “Lock-in, of course, is a real problem,” he said via email. It will take “smart policy, strong political leadership” and “foresight” to avoid this, he told Axios.

What they’re saying: Environmental activists are dismayed by Parliament’s move.

• “Politics and vested interests have won over science today,” said Laurence Tubiana, an architect of the Paris Agreement and president of the European Climate Foundation, via Twitter.

Read the full story.

Consumers' interest in electric vehicles is far higher than their current market share, and many potential buyers aren't even aware of tax incentives that cut purchase costs, a large new survey finds, Ben writes.

• EVs were roughly 6% of U.S. light-duty sales in the first quarter, per a major auto industry trade group.

Driving the news: Consumer Reports just released a wide-ranging poll on U.S. attitudes about electric vehicles.

• 36% would "definitely" or "seriously" consider an EV if they were buying or leasing a car today.
• Among respondents who are not definitely planning to get one, 61% cited charging logistics as a barrier, while 52% pointed to costs.

The intrigue: The poll finds that 46% of people are unaware of the availability of federal and state purchase incentives. That includes federal tax credits of up to $7,500.

Of note: The full credit is limited to 200,000 vehicles per manufacturer before phasing down, and some have already hit the limit (more on that below).

Read the whole survey.

💵 "Toyota Motor said it sold its 200,000th plug-in electric vehicle during the second quarter, triggering a phaseout of U.S. tax incentives of up to $7,500 for people who buy the cars," CNBC reports.

• What we're watching: The fate of congressional proposals to lift the per-manufacturer cap and make it more generous. That's part of Democrats' stalled clean energy tax package in Congress.
• Tesla and General Motors have already reached the cap.

🏭 "Rivian Automotive Inc delivered 4,467 vehicles in the second quarter, nearly four times more than the preceding quarter, as the electric-vehicle maker benefited from a ramp-up in production and strong demand," Reuters reports.

The startup says it's on track to meet its target of producing 25,000 vehicles this year.

China's growing dominance of the solar supply chain could hinder broader global moves toward clean energy, a new International Energy Agency analysis warns, Ben writes.

Driving the news: IEA just released its first detailed report on solar supply chains and it urges diversification to help accelerate solar power's already rapid growth.

Why it matters: Faster renewables expansion is a pillar of many nations' climate goals, and global competition to capture the economic benefits of manufacturing is intensifying.

The big picture: IEA credits China's aggressive solar push with sharply cutting costs, which provides global benefits.

• But supply chain concentration is a "considerable vulnerability," IEA said, citing numerous financial and physical risks (such as fires).
• There's already a polysilicon bottleneck, leading prices to quadruple over the last year.
• It calls on governments to boost support for expanding manufacturing and offers specific policy ideas.

The important numbers: China's share of combined panel manufacturing stages is over 80%.

• China also has the world's top 10 suppliers of solar manufacturing equipment.
• Solar growth in IEA's roadmap to net-zero emissions in 2050 would require global manufacturing capacity to more than double by 2030.
• China's Xinjiang province, where U.S. officials and human rights groups say there is forced labor and other abuses, houses 40% of global polysilicon manufacturing.

The intrigue: Solar policy has been tricky for the White House amid competing pressures to maintain access to panel imports while boosting domestic manufacturing.

The White House recently vowed to invoke the Defense Production Act, but proposed tax incentives for manufacturing are stuck in Congress.

Shell this morning offered the latest sign that high oil and gas and fuel prices will bring surging profits to oil companies when they report their second-quarter earnings, Ben writes.

Driving the news: The oil giant said higher refining margins could add up to $1.2 billion to its quarterly earnings compared to the first three months of the year.

• "The indicative refining margin is $28.04/bbl, compared to $10.23/bbl in the first quarter 2022," the company said in an updated outlook.
• The financial update also says Shell is reversing $3.5 billion to $4.5 billion in previous write-downs on its oil-and-gas asset values, "primarily due to changes in commodity price outlook."

The big picture: Oil majors announced major write-downs when the pandemic crushed prices and demand, and Shell's announcement shows the reversal of fortune.

More on that via the Financial Times...

• "Shell is the first to revise some of those writedowns, according to Biraj Borkhataria at RBC Capital Markets, who predicted others would follow."
• “'It is the first, but it won’t be the last,' he said. 'Given where commodity prices are I would expect more to come.'"