Biden will call for defense manufacturing legislation for EV battery components

US President Joe Biden has announced the release of 1 million barrels of oil per day from the US Strategic Petroleum Reserve for the next six months as part of an administrative effort to reduce gasoline prices in the South Court Auditorium of the Eisenhower Executive Office Building. White House in Washington, USA, March 31, 2022.

Kevin Lamarck | Reuters

President Joe Biden will call for the Defense Production Act to encourage the domestic production of minerals needed to make batteries for electric vehicles and long-term energy storage. This will help the United States reduce its dependence on foreign supply chains.

The president’s order could help companies receive government funding to study the feasibility of projects to extract materials for EV production, including lithium, nickel, cobalt, graphite and manganese.

The Defense Production Act, enacted by President Harry Truman during the Cold War, allowed the president to use emergency powers to prioritize the development of specific materials for national production.

The president will issue a directive approving the use of the Defense Production Act on Thursday to protect American production of vital materials to strengthen our clean energy economy by reducing our dependence on China and other countries for minerals and materials that would strengthen the future of our clean energy. The White House said in a statement.

The White House said the Department of Defense would “exercise authority using strong environmental, labor, community and tribal advice standards.” The administration also said it was “reviewing further uses of the law to secure a safer, cleaner and more resilient power for the United States.”

The transportation sector is the largest contributor to U.S. greenhouse gas emissions, representing about one-third of emissions each year. The transition from gas vehicles to EVs is crucial in tackling man-made climate change.

Demand for lithium has also increased as more auto companies compete for EVs. According to the benchmark Mineral Intelligence firm, the number and size of EVs batteries could increase by more than 90% of lithium demand by 2030. And according to the consulting firm AlixPartners, about 24% of new cars sold worldwide will probably be fully electric by 2030.

“We look forward to seeing the specifics of the President’s announcement, but the Biden administration should be commended for their efforts in securing the production of important minerals such as lithium at home,” said Lithium Americas, a resource organization focused on lithium development.

The administration unveiled a plan in February to allocate $ 5 billion to the states to fund EV chargers over five years as part of a bipartisan infrastructure package. The United States is the third largest Ivy market in the world after China and Europe.

Ramon Cruz, president of the Sierra Club, said in a statement that the organization “commends President Biden for taking steps to invest in clean energy and for further leadership in the transition to the world.”

“However, it is essential to do it properly,” Cruz added. “We must ensure that labor and environmental standards are not neglected, or important consultations with tribal countries and communities that will be directly affected.”

The White House on Thursday also announced a new release of oil from its strategic reserves to help reduce gas prices and help curb inflation across the United States.

– CNBC’s Cat Clifford Contributing Reporting.

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