Axios Generate

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November 30, 2021

🥞 Good morning! Today's Smart Brevity count is 1,003 words, 4 minutes.

🚨 Revealed: Airbnb offers homes for rent in China’s Xinjiang region on land owned by a group sanctioned by the U.S. for complicity in genocide, Axios' Bethany Allen-Ebrahimian and Jacque Schrag report.

  • Sign up here for more in Bethany's Axios China newsletter out later today. 

🎶 Sunday marked the 1989 release of pioneering artist Queen Latifah's debut album "All Hail the Queen," which provides today's intro tune...

1 big thing: A move to decarbonize the aluminum sector

Data: IEA; Chart: Will Chase/Axios

Here's a little scoop that gets to a big challenge: Sortera Alloys, a company that seeks to achieve 100% reuse of aluminum waste from end-of-life products, announced $10 million in funding from Bill Gates-affiliated Breakthrough Energy Ventures on Tuesday, Andrew writes.

The big picture: The need to decarbonize heavy industries such as steel, aluminum and cement manufacturing is taking on new urgency as policymakers and financiers search for ways to speed up the transition to a low carbon future.

Why it matters: The new investment signals the importance of reducing the energy intensity of making aluminum, which is in high demand from automakers seeking lightweight materials for new electric vehicles.

Details: According to the International Energy Agency, aluminum manufacturing is not on track to meet the energy intensity reductions needed for its net-zero scenario.

  • In the past few years, the direct carbon intensity of aluminum production stayed relatively flat, but it needs to drop by 3% per year from now through 2030, the IEA stated in its recent report.
  • This is in part because of how energy-intensive producing aluminum is, as well as a lack of breakthroughs and investments in recycling, the IEA noted.

Context: Sortera uses artificial intelligence at its Fort Wayne, Indiana, pilot facility to analyze photos of scrap metal in order to categorize every piece and ensure its automated machines utilize them efficiently and effectively.

  • The company is targeting the $10 billion sorted aluminum alloy feedstock market, according to company founder and president Nalin Kumar.
  • Its pilot plant is already shipping trial materials, which are intended for use in cars, construction and aircraft parts. Some of its products can currently only be made via primary aluminum production, which emits more carbon dioxide compared to recycling.
  • In an interview with Axios, Kumar said his broad vision is to contribute to a circular economy in which the company would take in scrap metal from cars and put all of it to use, using artificial intelligence-aided sorting and processing.
  • The company would then ship back products to the same car manufacturers, so Ford vehicles, for example, that reach their end-of-life would contribute components to new Ford cars and trucks.

What they're saying: “The auto industry, in particular, should be very excited about Sortera's ability to deliver high purity recycled materials without the cost and negative impact of producing virgin metal feed stocks,” said Carmichael Roberts of Breakthrough Energy Ventures, in a statement.

2. Putting gasoline prices in perspective

Reproduced from Energy Institute at Haas; Chart: Axios Visuals

This may be cold comfort to anyone feeling the pinch of higher gasoline prices, but a new analysis explains why looking only at per-gallon costs tells an incomplete story, Ben writes.

How it works: University of California economist Severin Borenstein's commentary offers other metrics to look at prices nationwide and in his state, the nation's costliest.

  • One of them, seen above, is average gasoline prices adjusted for inflation, showing they're far lower than right before the 2008 financial crisis.
  • As a share of median household income, prices are somewhat lower than the average over the last 17 years. Why? Incomes having risen somewhat and cars are more efficient.

Why it matters: Borenstein's point isn't to "well, actually" gas prices. Instead, he argues that focusing on gasoline "obscures the larger social issue."

  • "The problem is rising income and wealth inequality, which makes everything harder to afford, including housing, food, and, yes, gasoline," writes the UC-Berkeley business and public policy professor.
  • "What we need to address is the everything affordability crisis for people being left behind, with stronger social programs, educational options, and job opportunities."
  • "We don’t need to address the gasoline 'affordability crisis' for everyone else," Borenstein writes, arguing that artificially lowering fuel prices is a bad idea from a climate and pollution standpoint.

Read Borenstein's whole post.

3. What's new in oil: Prices, deals (maybe), Congress

Markets: "Oil prices tumbled nearly 3% on Tuesday after Moderna's CEO cast doubt on the efficacy of COVID-19 vaccines against the Omicron coronavirus variant, spooking financial markets and adding to worries about oil demand." (Reuters)

Europe: "Nordic oil producer Lundin Energy AB is exploring a potential sale that could rank as one of the largest European oil and gas deals in years, people with knowledge of the matter said." (Bloomberg)

Litigation: Axios' Shawna Chen reports: Reps. Alexandria Ocasio-Cortez (D-N.Y.), Rashida Tlaib (D-Mich.) and seven other House Democrats are urging the Justice Department to release American environmental lawyer Steven Donziger, who helped Indigenous communities in Ecuador win a $9.5 billion lawsuit against Chevron. Go deeper

4. Battery price decline comes with a warning

Illustration of a distorted dollar on a grid
Illustration: Sarah Grillo/Axios

The latest data on lithium-ion battery prices shows the continued downward march that will help make electric cars and energy storage more competitive, but reveals storm clouds too, Ben writes.

Driving the news: Average battery pack prices fell another 6% from last year to $132 per kilowatt-hour, per the research firm BloombergNEF. That's an 89% decline since 2010 in inflation-adjusted dollars.

Yes, but: "[T]he impact of rising commodity prices and increased costs for key materials such as electrolytes has put pressure on the industry in the second half of the year," the firm warns, citing higher costs for materials including lithium.

The short analysis warns that average prices could rise in 2022. "This would impact EV affordability or manufacturers’ margins and could hurt the economics of energy storage projects," BloombergNEF's release states.

5. Number of the day: nearly 1,500

That's the number of all-electric trucks that the big European logistics company DB Schenker has pre-ordered from Volta Trucks, Ben writes.

Why it matters: It's the largest pre-order for electric trucks in Europe to date, the companies said.

  • However, a "pre-order" is not a synonym for the purchase of Volta's trucks, which have not yet moved into commercial production.
  • "DB Schenker will use the first prototype of Volta Zero Trucks in real distribution conditions in spring and summer of 2022," the companies said in a release.