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— The Uyghur Forced Labor Prevention Act goes into effect today, regulating imports from a region responsible for a major share of a critical solar component.
— The House Appropriations subpanels on energy and interior vote on their FY 2023 spending bills today.
— Some storied environmental groups are finding themselves caught in the middle of the culture wars.
HAPPY TUESDAY! I’m your host, Matthew Choi, back from a small date with influenza. Thank you to my dear colleagues for taking the reins on ME, and please feel free to re-up any emails I missed.
Now for some trivia. Congrats to DESRI’s Maria Smith-Lopez for knowing Nick Nelson was the king of rugby in “Heartstopper.” For today: What were the four founding members of SkyTeam? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today’s episode: Glick calls ‘bull’ on taking directions from White House.
SOLAR INDUSTRY BRACES FOR FORCED LABOR LAW: The Uyghur Forced Labor Prevention Act officially takes effect today, prohibiting the importation of any goods mined, produced or manufactured wholly or in part from the Xinjiang region of China, unless an importer can prove that the products were not made with forced labor.
The law, signed by President Joe Biden last year, creates a so-called rebuttable presumption that could be of particular concern for the solar industry. About 50 percent of the world’s supply of polysilicon came from the Xinjiang region last year.
“I don’t see how this cannot be a major disruption,” Michael Parr, executive director of the Ultra Low-Carbon Solar Alliance, told ME ahead of the implementation.
The solar industry has had some time to prepare for the law. Companies have already had to contend with a “withhold release order” on one Chinese firm for almost a year, and have for months implemented a traceability protocol.
“Most major wafer makers have multiple factories and multiple polysilicon supply contracts, so keeping wafers from one factory free of polysilicon made in Xinjiang is not practically very difficult,” said Jenny Chase, head of solar analysis at BloombergNEF, in an email. But questions remain, she said, on what trail of proof the U.S. authorities will accept for the supply chains having been separated.
Christian Roselund, a senior policy analyst at Clean Energy Associates, an industry advisory firm, said there is a wide range of potential outcomes from the law’s implementation on the U.S. solar industry.
“It really depends upon who is on the entity list, but also how Customs enforces UFLPA, what suppliers they target and how broad of a brush they paint with, in terms of the net that they’re casting for enforcement,” he said. “There’s also the question of how quickly the industry can adapt and learn. I think we’re looking at a range of possibilities that go from a minimal impact on the U.S. solar market to a very significant impact and that all depends on the details.”
On Friday, the government’s Forced Labor Enforcement Task Force released an enforcement strategy, including an entity list naming several companies linked to polysilicon from Xinjiang.
SPENDING VOTE: The House Appropriations Energy and Interior subpanels vote on their fiscal year 2023 spending bills today. The Interior, Environment and Related Agencies subcommittee unveiled its bill text Monday, calling for $16.6 billion for DOI and $11.5 billion for EPA. The draft bill’s numbers collectively increase FY 2022 spending 18 percent for the subpanel’s agencies, with $2.1 billion more for DOI and $2 billion more for EPA.
While EPA’s figure is below Biden’s budget request of $11.88 billion, the total Interior spending including in the Energy and Water Subcommittee’s bill text comes to just over $18.5 billion — higher than the budget request’s $17.5 billion.
The interior and environment bill includes some of the key environmental provisions under last year’s bipartisan infrastructure package, including the Clean Water and Drinking Water State Revolving Funds. Still, those two programs would only get appropriated $2.88 billion — above the $2.77 billion in the administration’s budget request but below the $5.5 billion authorized for FY 2023 in the bipartisan package. It also increases funding for environmental justice programs by $201 million to $301 million. Environmental justice programs were a sticking point with Republican negotiators over FY 2022’s spending plan. Read the bill text here. POLITICO’s Alex Guillén has more here.
The Energy and Water Development subcommittee also has a markup on its bill text today, which would also raise funding for the Energy Department to $48.2 billion — a $3.3 billion increase from FY 2022.
That includes $15 billion in additional loan authority for the Title 17 innovative technology loan guarantee program under the Loan Programs Office. And, following Biden’s plan to stimulate clean energy manufacturing, House appropriators aim to provide $100 million for use of the Defense Production Act within DOE’s authority to accelerate domestic production of equipment like solar panels and transformers.
It also increases spending for the U.S. Army Corps of Engineers to $8.89 billion — an increase from both Biden’s budget request and FY 2022 spending levels. Read the bill text here. POLITICO’s Kelsey Tamborrino has a break down here.
OTHER COMMITTEE ACTION THIS WEEK: The Senate Environment and Public Works Committee will hear from Michal Freedhoff, EPA’s point person on all things toxic, on Wednesday to discuss the agency’s implementation of the 2016 Toxic Substances Control Act amendments (Freedhoff is also a former EPW staffer). Perhaps most notably, the agency is working to ban asbestos under TSCA — a move that, as one could imagine, has garnered backlash from the chemicals industry. Senate EPW had another hearing two weeks ago on S. 4244 (117), which would also ban asbestos.
The House Energy and Commerce Committee’s energy subpanel also holds a hearing Wednesday to dive into energy infrastructure and efficiency legislation. The six bills include legislation to bring home the critical mineral supply chain, H.R. 1599 (117), to create a DOE weatherization program, H.R. 7947 (117), and to provide loan guarantees for energy development in Indigenous areas, H.R. 8068 (117).
The House Climate Crisis Committee has another hearing on cutting methane emissions Friday, focusing on health and job creation. The committee met last week to discuss the states’ role in reducing emissions, hearing from the governors of New Mexico and Wyoming.
ICYMI:POLITICO’s Burgess Everett reported last week that Senate Energy Chair Joe Manchin isn’t keen on direct pay in Democrats’ climate and clean energy tax package. The centrist and Senate Majority Leader Chuck Schumer have been huddling privately for weeks on a party-line bill for the summer, and Manchin continues to fret over the inflation implications of pumping more money into the economy.
But clean energy advocates have long said that direct pay is necessary for budding industries and businesses to access benefits immediately and drive the clean energy transition at the speed necessary to reach Biden’s climate goals.
“There is a lot of evidence to show that when you make a direct payment rather than a tax credit you get more investment,” Sen. Tina Smith (D-Minn.) told POLITICO’s Josh Siegel and Kelsey Tamborrino. “You are getting more bang for your buck and you are getting more clean energy.”
THE SHAPE OF THE ENVIRONMENTAL MOVEMENT: POLITICO’s Zack Colman has a deep dive on the shifting sands of the environmental movement, where some of the most storied organizations are changing course to confront their pasts with racism and focusing on environmental justice as much as the natural environment. But some long-time advocates fear doing so is drifting away from the original message of the movement and leaves it squarely in the Democratic camp — possibly at the cost of Republican relationships needed to advance policy should the GOP retake Congress. Read Zack’s story here.
INFLATION NATION: The nation’s drivers got a sliver of good news as gasoline prices dipped to $4.981 per gallon on Sunday. But that’s still a steep number for consumers, and Energy Secretary Jennifer Granholm told CNN’s Dana Bash on Sunday that “we know this is going to be a tough summer because driving season just started and we know there will be continued upward pull on demand.” Granholm cited potential growth in Chinese demand as the pandemic evolves and looming European sanctions reducing Russian production.
Granholm said a federal gas tax holiday or some other direct relief for consumers is not off the table, though she noted that the gas tax pays for roads and other transportation infrastructure that got a major boost in last year’s infrastructure package. Artificially decreasing gasoline prices also wouldn’t address supply challenges from the high global crude prices and limited refining capacity. Granholm plans to meet with oil and gas executives this week to discuss a “global refining challenge” and bring more supply to market.
Related: “A recession is ‘not inevitable,’ Biden administration officials say,” via POLITICO’s Myah Ward.
WHITE HOUSE HAPPENINGS: The National Climate Task Force meets today on the summer’s forecasted extreme heat and its impacts on low-income and other disadvantaged communities. White House climate chief Gina McCarthy will lead the meeting with other senior administration officials and discuss both the president’s regulatory climate agenda and the legislative push for clean energy tax credits and investments. The task force will also touch on ways to address drought and wildfires in the West and flood risk in the eastern U.S.
JERSEY WIND GETS REVIEW: The Bureau of Ocean Energy Management announced its draft environmental impact statement for the proposed Ocean Wind 1 offshore wind project off the coast of New Jersey — marking the first DEIS published under the Biden administration for an offshore wind energy project. A notice of availability will publish in the Federal Register on June 24, opening a 45-day public comment period.
EUROPEAN COAL COMEBACK: Russia’s sharp tapering of natural gas shipments into Europe last week escalates the continent’s search for alternative energy sources. In Germany, that means the return of coal as well as incentives to burn less gas, The New York Times reports.
RUSSIAN OIL FINDS A NEW HOME: Asian markets are gobbling up Russian crude exports following Europe’s moves to keep out the country’s oil, according to a Rystad Energy analysis released Monday. India saw a particularly dramatic increase, importing 658 percent more Russian crude in March to May than 2021 levels. China purchases increased 205 percent, though that is below the continent-wide average jump of 347 percent.
Indian and Chinese refineries are still drawn to Russian oil because of discounts on the supplies to overcome Western sanctions — which still manage to make them cost-competitive over the additional hurdles added by Russia’s ouster from Western financial systems. Once refined, products made from Russian crude are far harder to track and keep out of Western countries.
— Brett Lake had his last day as the Energy Department’s creative manager Friday.
— Amanda Sollazzo joined ClearPath as a government affairs associate. She previously worked for House Transportation ranking member Sam Graves (R-Mo.).
— Christina Hayes will start as the Americans for a Clean Energy Grid’s first permanent full-time executive director next month. She is a board member for the group and comes from Berkshire Hathaway Energy, where she is currently vice president for federal regulatory affairs. Rob Gramlich has served as ACEG’s executive director since 2020 and will work as its senior policy director.
— Erin Pressley was named senior vice president for education, training and events at the National Rural Electric Cooperative Association. She comes from the National Association of Convenience Stores, where she has been vice president of media and education.
— “Meet the Peecyclers. Their Idea to Help Farmers Is No. 1,” via The New York Times.
— “Native American tribes to co-manage national monument for first time,” via The Washington Post.
— “Brazil’s Petrobras swaps CEOs amid political blowback on fuel prices,” via Reuters.
THAT’S ALL FOR ME!