September 07, 2023
🤯 Batteries, hurricanes, Arctic drilling (or not!). We've got lots of news, but we've got you covered with a Smart Brevity count of just 1,259 words, 4.5 minutes.
🎶 Exactly 30 years ago, SWV were No. 1 on Billboard's R&B charts with today's beautiful intro tune...
1 big thing: The battery boom goes to 11
Driving the news: All this happened Wednesday alone...
- Daimler Truck, Cummins and Paccar unveiled a joint venture that will invest $2-$3 billion in making cells for commercial vehicles and industrial uses.
- Big players, including BlackRock and Temasek, are pouring $542 million in new equity investments into battery materials firm Ascend Elements.
- Oman's wealth fund is investing an undisclosed sum in the U.S. battery firm Our Next Energy, per Oman's news agency and multiple reports.
Catch up fast: This week's announcements are just the latest in a long string of federally supported industry plans and investments — tens of billions of dollars worth — slated to make the U.S. a key battery player.
The big picture: President Joe Biden's signature 2022 climate law has industrial policy provisions that push development from multiple angles.
- There are subsidies for domestic battery manufacturing.
- Meanwhile, consumer EV purchase subsidies are tethered to vehicles with batteries and materials sourced domestically or from free-trade partners.
- In addition, the 2021 infrastructure law helps as well. Ascend said it has received two grants totaling $480 million through that statute.
What they're saying: The 2022 law is "absolutely increasing demand for our sustainable engineered battery materials like cathode precursor (pCAM) and cathode active material (CAM), which are made from recycled lithium-ion batteries," Ascend spokesman Thomas Frey tells Axios via email.
- Cummins cited the manufacturing provisions, telling Axios the $35-per-kilowatt-hour incentive "is expected to benefit customers by lowering the price of batteries."
The bottom line: Battery manufacturing growth was inevitable as the market grows, but the climate law is providing a charge.
2. Hurricane Lee intensifies amid record warm oceans
Lee is rapidly intensifying and will be a major hurricane by Friday morning, Andrew writes.
- It will take advantage of record warm ocean temperatures in the tropical Atlantic, part of this year's global trend.
Threat level: The National Hurricane Center is forecasting the storm to be at the cusp of Category 5 intensity on Saturday and remain a major hurricane into early next week.
- The storm is forecast to remain north of the Leeward Islands and Puerto Rico, largely sparing them significant impacts.
- Rapid intensification, while typically seen in the strongest hurricanes, is becoming more common and pronounced as sea and air temperatures increase due to human-caused climate change, studies show.
Yes, but: The storm's ultimate path beyond early next week is still in question. Computer models show Lee slowing down before making a turn to the north in response to steering currents around it, particularly a dip in the jet stream moving toward the East Coast.
The bottom line: It is too early to say whether the storm will directly affect the mainland U.S., with all eyes on if, where and when Lee makes that northward turn.
3. Microsoft's big removal deal
We've got some interesting reporting below on early-stage action in the CO2 removal world, but first: Microsoft just unveiled a deal with the direct air capture firm Heirloom for up to 315,000 metric tons, Ben writes.
Why it matters: It's "one of the largest carbon dioxide removal deals to-date," the companies said, and will help provide "additional predictable and durable cash flows" that help enable Heirloom to build DAC plants.
Go deeper: The Wall Street Journal has much more.
4. Corporate heavyweights deepen ties to CO2 removal
Breaking: Frontier, the corporate group looking to jump-start carbon dioxide removal markets, unveiled plans to purchase services from 12 more early-stage startups, Ben writes.
Driving the news: Startups backed with these "pre-purchases" include...
- Airhive, a direct air capture firm.
- Alkali Earth, which "uses alkaline byproducts from industrial processes as carbon-removing gravel to apply to roads."
- CarbonBlue, which aims to "mineralize, separate, and remove dissolved CO2 from water."
The agreements are on behalf of Stripe, Shopify and H&M.
Why it matters: There's a wide array of methods. While I only grazed a few of them above, it's the largest number of companies Frontier has backed in a single round.
Quick take: Learning curves matter! Four of the 12 had unsuccessfully applied previously.
- They advanced in performance data, measurement ability, cost projections and more, Frontier's Joanna Klitzke said in an interview.
- "That...is exactly what we want to see for this field. We need all carbon removal companies building and iterating rapidly," said Klitzke, Frontier's head of procurement and ecosystem strategy.
Catch up fast: Launched in 2022, Frontier brings together Meta, Alphabet, Stripe and others to create a market pull but also vet companies' technology and provide other assistance.
The bottom line: If removal is to ever reach the gigaton scale or even close, it'll take a village to see what works — and what doesn't.
5. First Look: Vaulted Deep raises $8 million
Let's zoom in on one of the newest players in Frontier's purchase commitments, Andrew writes.
The big picture: Vaulted Deep is a spinoff from the waste management firm Advantek, which is focused on pursuing biomass carbon removal and storage.
- The company, which thinks it has cracked the code to scaling up verifiable, low-cost carbon removal credits, tells Axios it raised a seed round of $8 million, led by Lowercarbon Capital.
The firm's technology involves drilling into underground rock formations to deposit organic waste, sequestering it as it decomposes.
- Examples of these wastes include biosolids, agricultural and livestock waste, paper sludge and more, the company said in a statement.
- Typically, such wastes would wind up in a landfill, where they would contribute to methane emissions, a planet-warming gas.
Between the lines: The company will rely on preexisting technology from Advantek that was first developed to address waste from oil and gas development.
According to Advantek founder Omar Abou-Sayed, who is moving over to become executive chairman of Vaulted, the company can offer lower prices on carbon removal compared with its competitors, on the order of about $300 per ton.
- In addition, he said, the company has another advantage, which is two operational, permitted injection sites — one in L.A. County, and another in Kansas.
- Vaulted will also be led by CEO Julia Reichelstein, who is a former investor at Piva Capital.
6. Making sense of Biden's Arctic oil decision
President Biden's moves to protect Arctic lands from drilling are headline-grabbing, but the effect on future U.S. production is unclear, Ben writes.
Catch up fast: The administration yesterday canceled drilling leases in the Arctic National Wildlife Refuge (ANWR) issued under President Trump.
- It also proposed banning any new leasing on almost 11 million acres in another region called the National Petroleum Reserve-Alaska (NPR-A). Axios' April Rubin has more.
What we don't know: Whether this blocks much production that would have otherwise occurred.
- The industry has expressed only tepid interest in ANWR and new NPR-A projects.
Yes, but: The move preserves ConocoPhillips' big Willow project in the NPR-A, which environmentalists blasted Biden officials for approving in the first place.
- Still, Alaska's congressional delegation condemned the moves as "anti-development."
What they're saying: The American Petroleum Institute suggested it has wider implications.
- API's Holly Hopkins, in a statement, said it's a "concerning precedent" for federal lands decisions more broadly, and that "consistent" policies are needed to support long-term investment.
The other side: "At a time when the reality of the climate crisis is daily news, the Biden administration is taking necessary action in the Arctic to move us toward a more sustainable future," the Alaska Wilderness League's Kristen Miller said in a statement.
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🙏 Thanks to Chris Speckhard and Javier David for edits to today's edition, along with the talented Axios Visuals team.