Democrats, Republicans Disagree on Nurturing Domestic Supply Chain for Batteries, Wind Turbines

Environment Subcommittee ranking member Rep. David McKinley, R-W.Va., said both the European Union and China are having blackouts and energy rationing. "In this rush to lessen our reliance on fossil fuels and nuclear, renewables can't keep up," he said. He said that environmental justice activists argue against mining critical minerals in the U.S., but we are also troubled by human rights violations in the Congo, where most cobalt comes from, and in China, where most polysilicon is produced. "You can't have your cake and eat it, too," he said.

Jackson Switzer, senior director of Redwood Materials, testified that two of the most expensive components of lithium-ion batteries "are produced via a convoluted supply chain based almost entirely in Asia," The minerals for the cathode and anode are mined in Africa and South America, but the processing of the minerals and the construction of the anode and cathode happens in Asia.

"Quickly ramping a domestic battery materials supply chain and using the highest possible percent of local, recycled raw materials is the best way we can meet the U.S.’s electrification and clean energy goals," he testified. "Building out domestic electric vehicle and lithium-ion battery manufacturing capabilities can help position the United States as a competitive international player in the global automotive manufacturing space and strengthen our nation’s automotive sector as an increasing portion of cars transition to EVs."

The USMCA was written to prioritize adding domestic lithium-ion battery manufacturing, and Build Back Better, the major environment and social spending bill under consideration in Congress now, also may offer larger subsidies to buyers of electric vehicles if the cars or trucks are built in the U.S. with U.S.-made batteries (and with union labor).

Zindler testified that the Build Back Better bill will have a "far bigger impact" in the move from gasoline cars to electric cars than the infrastructure bill, which will fund more charging stations and improve the transmission grid. Zindler said that's because BBB encourages the purchase of EVs through tax credits more generous and long-ranging than those in place today. "There has been plenty of attention paid to how China subsidizes the manufacturing of clean energy equipment by making low- or zero-interest capital available to producers. While that is true, China has also created significant demand for clean energy goods by offering higher tariffs for zero-carbon power, or offering rebates for the purchase of EVs or plug-in hybrid EVs," he testified, and the U.S. could do the same, spurring more domestic manufacturing of clean technology goods.

Roxane Brown, international vice president of the United Steelworkers, also praised the Buy American aspects of the infrastructure bill and BBB, but said her union has "significant reservations regarding H.R. 5492, the Manufacturing Economy and National Security Act. Provisions in the bill which would provide federal resources to move supply chains from 'countries of concern' to third party countries could lead to reduced reshoring of manufacturing and corporations using federal dollars to shift goods that have existing anti-dumping and countervailing duty orders (AD/CVD) to third party countries to then dump goods into the U.S. market again. The legislation also makes no effort to ensure shifted production does move to countries which have higher greenhouse gas emissions or equivalent environmental standards than the U.S."

She also testified that the U.S. should strengthen and expand its withhold release order on polysilicon and "commit to building out the solar supply chain in the United States."