10/19/2023
It is now the fifth week of the Union of Auto Workers (UAW) strike, with the perceived threat of EVs to union jobs central to the labor dispute. The number of jobs involved in the manufacture of an electric vehicle may not in fact be materially fewer than an ICE vehicle, however, announcements regarding new US manufacturing facilities, incentivized by government policy, foretell a migration of jobs to states less favorable to unionized labor. This is a major point of concern among union leaders, along with the evolving skill set requirements in some areas. Much has been made in climate circles and the broader media about the wide-ranging potential impacts of a resolution between the two parties as it relates to EV adoption and policy going forward.
As we transition away from conventional infrastructure and technology – traditionally built by domestic, union labor – to carbon-conscious alternatives, how do we manage the shifting landscape of the labor markets and mitigate the effect on workers? In theory, this was a problem the IRA was designed to solve, however one of the eleventh-hour cuts to the bill saw the removal of a tax credit enhancement for union labor. The other headwind, for EV labor specifically, is the ownership structure of manufacturing facilities. Ford and GM have each partnered with leading South Korean battery manufacturers to build their facilities and this joint-venture structure prohibits them from being included in union contracts.
The extent to which the strike’s effects will ripple through the broader low-carbon economy are yet to be seen. One of the first sectors to feel its effects might be stationary storage, which, it could be argued, is along for the ride with the EV supply chain, dwarfed by a factor of ten on a GWh basis.
Planned stationary storage plants aren’t necessarily located in union-heavy states, but the power sector experiences a similar paradigm in which ‘green’ labor is less unionized than gas and coal. It remains to be seen how battery OEM giants will react to the eventual labor resolution and how they will perceive it against the incentives for US manufacturing.
Although their nature and quality is a key concern of policy, the jobs will be there as long as capital continues to flow to the vast number of projects needed to get to net zero. Expect to hear from NER in Q4 regarding successes in battery storage and forthcoming products supporting tax equity investments under the new IRA incentives. Read about more of what the team is up to below.
🤝 INNER CIRCLE: Our Newest Addition to the Team, Emanuel Castro
Emanuel Castro will be joining the Business Development team as Associate Analyst, focusing on economic and policy-related analysis, evaluating new growth sectors and supporting execution. He brings a global perspective on the energy sector, coming from a Houston-based research firm focusing on Latin America’s upstream and transition related topics.
From Emanuel: “Researching and assisting the team as we work to enable projects that will create meaningful carbon reductions has been an exciting and challenging experience. I am humbled to join a team of subject matter experts and look forward to future collaboration.”
🗨️ TALK NERDY TO ME: Musings From the Team
When we look up from our risk models, our team has a lot to say about topics that pique our interest and hopefully yours. (Keep up with our writing anytime through our blog.)
An Exciting Week in Material ScienceIn early August our Senior Scientist, Shawn Lee, responded to news of a breakthrough in superconductor research.
Can the US Look to the East for Lessons in Wind Deployment? Britti Paudyal authored a blog contrasting offshore wind deployment in two of the countries central to her undergraduate degree, nicely rounding off her summer internship.
📰 GENERAL INTEREST: What Our Team Found Insightful
🔮 To ITC or PTC? That is the question
Norton Rose Fulbright published a cheat sheet covering key facts about production tax credits (PTC) and investment tax credits (ITC) accounting for changes from the Inflation Reduction Act (IRA).
🔋 How low should the CI go? Biomethane & clean hydrogen
Canary Media’s Down to the Wire tackles an unforeseen challenge associated with the IRA’s incentives for hydrogen. More specifically it considers the benefits these incentives grant to conventional as well as clean hydrogen producers.
🍰 A big step in the quest for CDR commercialization
In August 2023 Occidental Petroleum (Oxy) acquired Carbon Engineering Ltd for $1.1 billion. This deal marks an advancement in the Direct Air Capture (DAC) space as numerous companies line up to explore investment opportunities.
🛫 Green Premium: Sustainable Aviation Fuel remains more expensive
Despite the airlines’ pledge to buy more sustainable aviation fuel (SAF) the average price remains more than double the price of regular fuel. This article looks at the current price drivers and how SAF benefits from the IRA.
📅 CONFERENCE CORNER: See You Out There
These are some of the events on our radar; let us know if you will be attending or what other conferences you would recommend:
ABLC Next from the Biofuels Digest, October 18-20, San Francisco
Scaling Up from the Passmore Group, November 6-8, Ottawa
US Power, Renewables, and Energy Transition Finance, from Proximo, November 2-3, Austin
Solar & Storage Finance USA from the Solar Media, November 7-8, New York City
AFCC from the Alternative Fuels & Chemicals Coalition, November 12-14, Washington D.C.
🎂 GARNERING MOMENTUM: A Busy Week in NYC
After NYC’s Climate Week, the team gathered for an unofficial “onsite” in New York to kick off fall.
