President Joe Biden has set a target of making half of all U.S. vehicles electric by 2030. (Getty Images)
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Nevada Democratic Sen. Catherine Cortez Masto is crafting legislation to give tax credits to battery and rare earth magnet manufacturers to increase production of materials used in electric vehicles and other technologies, an effort she says would create more jobs in the state’s mineral processing and recycling sector.
Members of the Senate Energy and Natural Resources Committee, including Cortez Masto, agreed during a hearing last week that more domestic production of lithium, nickel, cobalt and rare earth minerals would be needed to increase use of electric vehicles.
President Joe Biden has set a target of making half of all U.S. vehicles electric by 2030, a goal senators of both parties said was unlikely if the nation fails to produce the minerals needed for those vehicles’ batteries.
Cortez Masto said Nevada was uniquely positioned as the “nexus for our clean energy and critical mineral future” because every aspect of lithium ion battery manufacturing — mining, production, assembly and recycling — was present in the state.
Without robust federal support for domestic clean energy manufacturing, Cortez Masto said other countries will continue to outcompete U.S. producers.
During the hearing, Cortez Masto said she plans to introduce a pair of bills that would establish tax credits for businesses operating throughout the domestic critical mineral supply chain. The legislation would build on measures she advocated for in the bipartisan infrastructure package to improve the supply of “critical” minerals, which Congress in 2020 defined as “non-fuel mineral or mineral material essential to the economic or national security of the U.S. and which has a supply chain vulnerable to disruption.” Lithium is on the list.
“We should be leading this, we should be competitive internationally,” Cortez Masto said during last week’s hearing. “There are things we should be doing in congress to incentivize.”
Cortez Masto said she is working with fellow Democratic Sen.Michael Bennet of Colorado on legislation to establish an “advanced battery manufacturing investment tax credit” for building new plants or retrofitting existing manufacturing plants that make high capacity batteries.
Cortez Masto also said during the hearing she’s working with California Democratic Rep. Eric Swalwell to introduce a “rare earth magnet production tax credit act.” The bill would support domestic production for rare earth mineral magnets used in the automotive and energy industries.
Swalwell introduced a version of the legislation in the House last year. That bill would provide a $20 per kilogram credit for rare earth magnets produced in the U.S., and $30 per kilogram if all the rare earth material used in the magnets are produced in the U.S.
The credit would not apply if any component of the magnet was produced in Russia, China, North Korea or any other “non-allied foreign nation.”
Cortez Masto’s bills are set to be unveiled in the coming weeks, according to the Senator’s office.
The U.S. only produces about 9% of the world’s battery cells, David Howell, a director with the U.S. Energy Department’s Vehicle Technologies Office, told the Senate panel. A June 2021 White House report said domestic battery manufacturing is “dependent on foreign sources for battery materials and precursors.”
Duncan Robert Wood, a vice president for strategy and new initiatives at the nonpartisan international affairs think tank Wilson Center, told the panel that absent a “Herculean” effort to get minerals out of the ground, the White House target was likely out of reach.
“The targets are laudable, but I’m not sure if they’re realistic,” Wood said. “When you look at just the amount of materials that are going to be needed … there just aren’t enough being produced globally.”
Cortez Mastro questioned whether the technology to recycle critical minerals was available for immediate use.
Joe Britton, the executive director of the advocacy group Zero Emission Transportation Association, told Senators that 95% of the minerals used in electric vehicle batteries could be recycled.
“The technology to do recycling and refining is quite mature today,” J.B. Straubel, founder and CEO of lithium-ion battery recycling firm Redwood Materials, said.
Recycling could meet roughly 25-30% of the demand for the critical materials. Some critical minerals like cobalt could be recycled at even higher rates due to advancements in technology. However, critical minerals like lithium and nickel will require a lot of new production, Staubel said.
Manchin admonishes environmentalists
Nevada is home to the only active lithium production facility in North America and has notable lithium deposits, with several proposed projects currently under review by the U.S. Department of the Interior.
But those projects have attracted numerous lawsuits in Nevada from tribes fighting to protect sacred sites and conservationists protecting rare species, highlighting the tension between developers, conservation groups, and rural communities.
To me this is a reason why we need to streamline our permitting.
– Sen. Catherine Cortez Masto
In February, the U.S. Fish and Wildlife Service proposed a rule to protect nearly a thousand acres of critical habitat for a rare Nevada flower under threat by a proposed lithium mine on its only known habitat, complicating the mine’s future development.
Senate Energy and Natural Resources Committee Chairman Joe Manchin, a West Virginia Democrat, called for environmental groups, like those in Nevada, to ease off lawsuits against miners during the hearing. With the president’s target only eight years away, environmental litigation can block a new mine from operating for up to 10 years, he said.
“The environmental community’s got to get on board,” he said.
In a separate Energy and Natural Resources Committee hearing last month, Cortez Masto expressed frustration with the lengthy permitting process new mines in Nevada face that hinders the production of critical minerals in the state.
“To me this is a reason why we need to streamline our permitting,” Cortez Masto said.
In last week’s hearing, she compared Biden’s electric vehicles goal with President John F. Kennedy’s 1962 call to reach the moon by the end of that decade, adding that the U.S. must “take the opportunities and minerals we have here to build out that clean energy economy right here in America.”
“This is our moonshot,” she said. “It is important for the administration to stake a goal for all of us to marshal resources. Whether we achieve that goal can always be in question, but at least we are moving in the same direction. Just like Kennedy did when he made his announcement that he was going to put a man on the moon, this is our moment to focus on a clean energy economy.”
States Newsroom Washington bureau senior reporter David Fischler contributed to this story.
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