Will 'Buy America' derail bullet trains?

Your guide to the political forces shaping the energy transformation

May 23, 2023 View in browser   By Arianna Skibell A full-scale mock-up of a high-speed train is shown in California. | Rich Pedroncelli/AP Photo High-speed trains may be the latest victim of the Biden administration’s “Buy America” policy, advocates fear. President Joe Biden wants all materials used in federal infrastructure projects to be made in the U.S., and his $369 billion climate law ties generous tax credits to domestic sourcing requirements for clean energy technologies. That has contributed to barriers for widespread electric vehicle adoption, tensions with foreign trade partners and, now, the possible squashing of U.S. high-speed rail hopes, writes Minho Kim. That’s because only a few places in the world build trains capable of traveling 200 mph, said Andy Kunz, president of the advocacy group U.S. High Speed Rail Association. The United States also lacks the facilities and engineering know-how to design, build and maintain the tracks, signals and safety systems needed for such high-speed trains, analysts told Minho. That could complicate the administration’s goal of reaching net-zero carbon emissions by midcentury. Biden vowed last year to fund high-speed rail as one of 37 “game changing” technologies to fight climate change. But he also strengthened his administration’s Buy America requirements five days after taking office, creating a new White House office in charge of vetting waiver requests, Minho notes. That will make it harder for rail projects to get exceptions allowing them to use foreign parts, infrastructure specialists predicted. Transportation is the nation’s largest source of greenhouse gases. Bullet trains produce 14 to 16 times less planet-warming pollution per passenger compared with cars and airplanes. Zooming out: Biden’s Buy America policy is intended to position the U.S. as a leader in the clean energy transition while creating thousands of domestic jobs. But the measure also poses obstacles to accomplishing those goals fast enough to blunt catastrophic climate change. For the first time in five years, clean energy installations in the U.S. fell last year, according to a new industry report that overwhelmingly blamed delayed solar capacity on sourcing issues caused by trade restrictions, writes Lamar Johnson. The U.S. is also trying to create a domestic supply chain for the minerals needed to build EVs, a supply now dominated by China. In 2021, the U.S. imported more than 25 percent of its lithium, 48 percent of its nickel, 76 percent of its cobalt, and all its graphite and manganese. Lessening reliance on those imports will make it harder to spur widespread adoption of EVs.   It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   DON’T MISS POLITICO’S HEALTH CARE SUMMIT: The Covid-19 pandemic helped spur innovation in health care, from the wide adoption of telemedicine, health apps and online pharmacies to mRNA vaccines. But what will the next health care innovations look like? Join POLITICO on Wednesday June 7 for our Health Care Summit to explore how tech and innovation are transforming care and the challenges ahead for access and delivery in the United States. REGISTER NOW.     Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Annie Snider breaks down the details of the tentative deal California, Arizona and Nevada struck to significantly reduce their water use from the drought-stricken Colorado River over the next three years. Speaking of China... Microvast Holdings Inc. makes lithium-ion batteries for buses and other uses. | Business Wire/AP Photo In the latest example of how the rivalry between Washington and Beijing is complicating Biden’s climate agenda, the Energy Department has scrapped a proposed $200 million grant to a Texas-based battery company whose connections to China had drawn criticism from lawmakers, write James Bikales and Kelsey Tamborrino. DOE had tentatively approved the grant seven months ago to Microvast Holdings, a lithium-ion battery company that is planning a manufacturing facility in Tennessee. Agency spokesperson Charisma Troiano confirmed DOE canceled the award, but declined to say why, write Brian Dabbs and Nico Portuondo. Power Centers Enel North America has picked Inola, Okla., as the location of a facility to manufacture solar cells and modules. A manufacturing site in Italy is pictured. | Enel Solar shake-up An Italian company announced plans to build a $1 billion solar factory in Oklahoma on Monday, a potentially momentous advance for an industry that is facing uncertain growth and threats to its federal incentives in Congress, writes David Iaconangelo. The factory could become one of the country’s first to produce crystalline silicon solar cells — a key component in most panels, but one that has not been made at commercial scale in the United States for several years. Most components for solar panels are now imported. German spats Germany's three-party ruling coalition descended into public infighting Tuesday as the Greens' Vice Chancellor Robert Habeck accused the liberal Free Democrats' Finance Minister Christian Lindner of breaking promises by delaying a controversial clean energy law, write Hans von der Burchard and Gabriel Rinaldi. The spat highlights growing tensions in a government whose parties hold diverging opinions over how Germany should implement the European Union's plans to slash carbon emissions by 55 percent by 2030 and become climate-neutral by 2050. In Other News Boots on the ground: As the federal government struggles to support disaster recovery in the wake of climate-fuel events, extremist groups are stepping in to fill the void. Heating up: A new study warns that nearly 800,000 residents in Phoenix would need emergency medical care for heat stroke and other illnesses in an extended power failure. Other cities are also at risk.   GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE.     Subscriber Zone A showcase of some of our best subscriber content. A flare for burning excess methane, or natural gas, from crude oil production is seen at a well pad in Watford City, N.D. | Matthew Brown/AP Photo Twenty oil and gas producers were responsible for half of the industry's methane emissions in the United States in 2021. More than 130 lawmakers from the EU and the United States are calling for the removal of oil executive Sultan Al Jaber as president of this year’s COP28 climate talks. A new study found that climate lawsuits are affecting oil companies' value — even in the initial stages of litigation. That's it for today, folks! Thanks for reading.   Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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