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Trump Is Disabling the Agency That Could Fight China’s Rare Earths Embargo
The Loan Programs Office is good for more than just nuclear funding.
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The Loan Programs Office is good for more than just nuclear funding.
A conversation with VDE Americas CEO Brian Grenko.
And more of the week’s big fights around renewable energy.
Long Islanders, meanwhile, are showing up in support of offshore wind, and more in this week’s edition of The Fight.
Three weeks after “Liberation Day,” Matador Resources says it’s adjusting its ambitions for the year.
On vehicle emissions standards, coral bleaching, and ‘no man’s land’
Current conditions: New York City has an air quality alert today due to smoke from a 13,500-acre New Jersey wildfire• There is a thunderstorm warning for the Vatican City, where mourners are gathering to pay their respects to Pope Francis • Several New England ski areas announced they are staying open “well into May” thanks to the region’s near-record levels of spring snow.
1. Supreme Court appears sympathetic to fuel producers’ challenge to California’s emissions waiver
The Supreme Court indicated after oral arguments on Wednesday that fuel producers likely have legal standing to challenge California’s ability to set vehicle emissions standards that are stricter than federal limits. Since 1967, the Environmental Protection Agency has granted California a waiver from the federal Clean Air Act acknowledging the state’s unique air pollution challenges, including severe smog. Due to the state’s size, however, those stricter standards have largely been adhered to by automakers nationally. As a result, the California waiver — sometimes incorrectly referred to as the “electric vehicle mandate” — has been a target of Republicans, including in an unsuccessful lawsuit brought by a coalition of states and industry groups in 2024, in which a D.C. Circuit panel ruled unanimously in favor of the EPA.
But on Wednesday, “several of the justices suggested” that the D.C. appeals court “erred when it barred the fuel makers’ suit on the theory that market forces are driving the national push toward electric vehicles far more than California’s tough regulations,” CNN writes. Justice Clarence Thomas, a conservative, questioned the EPA’s attorney over whether the goal of the California regulations was to “reduce the use of petitioner’s fuel,” while liberal Justice Elena Kagan pointed out that when the EPA reestablished the waiver in 2022, officials did so by suggesting it would help reduce the reliance on fossil fuels. The Trump administration has also threatened to revoke the waiver, in keeping with direction from Project 2025, although “California says the waiver makes no difference to its emissions control right now,” mainly because of the proliferation of fuel-efficient cars, EVs, and hybrids in the state, Courthouse News Service reports.
2. We’re in the midst of the biggest coral bleaching event in history
The planet is undergoing the biggest coral bleaching event in history, with nearly 84% of the world’s coral reefs exposed, the National Oceanic and Atmospheric Administration and the International Coral Reef Initiative reported this week. “We’re looking at something that’s completely changing the face of our planet and the ability of our oceans to sustain lives and livelihoods,” Mark Eakin, the executive secretary for the International Coral Reef Society, told the Associated Press. The bleaching event, which began in 2023, has already exceeded the second-largest global coral bleaching event on record, which occurred from 2014 to 2017 and impacted approximately 69% of the world’s reef areas.
Heat stress is the primary driver of coral bleaching, causing marine invertebrates to expel the symbiotic algae that serve as the coral’s food and provide it with color. While bleaching doesn’t necessarily kill the coral, prolonged and more frequent bleaching since the 1980s has caused coral reefs to decline by 30% to 50% over the past four-and-a-half decades. “If the corals die, this support structure that provides food and homes is lost. Consequently, many species will suffer, as well,” Joerg Wiedenmann, a marine biologist at the Coral Reef Laboratory at the University of Southampton in England, told The Washington Post.
NOAA
3. How progressive states are navigating Trump’s ‘no man’s land’
Progressive states are navigating a “weird no-man’s land” as they negotiate budgets amidst the uncertainty of the Trump administration’s clawbacks on decarbonization-related funding, my colleague Emily Pontecorvo writes. Speaking with state senators and representatives in Washington, Massachusetts, New York, and New Jersey, Emily found that states with cap-and-trade programs are in an awkward limbo after Trump signed an executive order directing his attorney general to “stop the enforcement” of such programs. Many state climate goals are also on the chopping block, especially with Trump targeting offshore wind, which was an essential component in New York and New Jersey’s transition to renewable energy sources. There is good news, though: Many states have a pot of funds that are “more impervious to federal interference,” Emily writes, and rely instead on funding climate programs through fees on monthly electric and gas bills.
4. Tariffs could spell trouble for Woodside Energy’s $1.2 billion investment in Louisiana LNG
Analysts believe President Trump’s tariffs just made the math a whole lot “trickier” for Woodside Energy’s $1.2 billion purchase of the Louisiana liquified natural gas plant formerly known as Driftwood. The Australian company acquired the development opportunity via its acquisition of Tellurian last year, with the intent of becoming a “global LNG powerhouse,” Reuters writes; the first part of its four-phase development plan is expected to run to $16 billion.
But in her quarterly update, CEO Meg O’Neill acknowledged that Woodside Energy is “assessing” what the tariffs — and “potential further trade measures” — might mean for the company’s LNG business in Louisiana. Though the plant falls within a Foreign-Trade Zone that allows it to defer the payment of tariffs until the completion of individual LNG trains, “around 25% of Louisiana LNG’s estimated capital expenditure is equipment and materials, approximately half of which is currently expected to be sourced from the U.S.,” O’Neill said. The company has already sold 40% interest in the export terminal to increase its funding through 2026, but “if energy prices come under further pressure as a result of tariff-related growth pressures, it could make things trickier for Woodside down the track,” Tim Waterer, the chief market analyst at KCM Trade Global, told Reuters.
5. Exowatt, Sam Altman-backed modular solar energy startup, raises $70 million in Series A
Exowatt, a startup aiming to create “modular, dispatchable solar solutions” for data centers, announced that it closed a $70 million Series A financing round this week. Following a $20 million seed round that included investments from OpenAI’s Sam Altman and actor Leonardo DiCaprio, the Series A was led by venture capital firm Felicis, with $35 million in equity and $35 million in debt provided by HSBC Innovation Banking and other partners.
At last year’s RE+ conference, Exowatt unveiled its Exowatt P3, an orange battery module that the company claims is capable of delivering up to “24 hours of power daily” by capturing solar energy as heat in a long-duration battery that can convert to electricity on demand, “making it ideal for data centers and other commercial and industrial applications.” Despite the company’s 1.2-gigawatt backlog of orders, Exowatt has its critics, with Latitude writing that “each of P3’s components rely on technologies that have already been used in other applications — often unsuccessfully.”
Mati Carbon, an enhanced rock weathering startup that works with farms in India, has won the $50 million Carbon Removal XPRIZE.
See also: federal policy, batteries, and electricity demand.
The clean energy industry is beginning to report to investors and the public on its first brush with Donald Trump’s trade policy. While earnings season has only just begun, already some broad themes are emerging across the sector: Tariffs hurt. Batteries are getting more expensive. And there’s big demand for power, especially natural gas.
Four big clean energy companies that have reported results so far — inverter and battery maker Enphase, turbine manufacturer GE Vernova, electric vehicle giant Tesla, and developer and utility NextEra — mentioned tariffs prominently in either their earnings reports or their analyst calls. GE Vernova said that tariffs would result in $300 million to $400 million of additional costs. Enphase said that tariffs would take off two percentage points from its margin in the second quarter and six to eight points of gross margin in the third quarter. Tesla said that “increasing tariffs may cause market volatility and near-term impacts to supply and demand.”
Tesla’s executives — including chief executive Elon Musk — expanded on that market volatility later in a call with investors and analysts, with Musk saying that he was an “advocate of predictable tariff structures, free trade, and lower tariffs.” Musk added that economic uncertainty could continue to weigh on Tesla’s auto sales, which notably declined in the first three months of the year. “When there is economic uncertainty, people generally want to pause on doing a major capital purchase like a car,” he observed.
NextEra chief executive John Ketchum said the company had “dramatically diversified where we source our solar panels” and was not affected by the recent announcement of high tariff rates on solar panels from Southeast Asia. He also specified to analysts that “we source our wind turbines from the U.S., with manufacturing in Florida.” The company estimated that it has “$150 million in tariff exposure through 2028, on over $75 billion in expected capital spend,” Ketchum said.
Enphase chief executive Badri Kothandaraman attempted to tread delicately on the tariff issue. “While the global policy environment remains fluid with tariffs, with interest rates and subsidies constantly evolving, we are moving quickly to realign our supply chain to minimize downside across a range of scenarios,” he said. “While we cannot control the macroeconomic conditions, we can absolutely control our response.” GE Vernova chief financial officer Ken Parks described tariffs as a “continued increase in the cost base,” and said that the combined tariffs on steel plus various imports from Canada, Mexico, China — which is facing import duties of 145% or more, depending on the product — affect about a quarter of its spending.
A lot of that tariff impact comes from the battery supply chain, which China dominates. For Tesla, that means its fast growing energy storage business is particularly at risk. While the company has made some efforts to onshore stationary storage battery production, its chief financial officer, Vaibhav Taneja, said that domestic production would ultimately account for only a “fraction” of its battery needs, and even that would “take time.”
Enphase was similarly upfront about the impact on its battery supplies. “We are no exception. We use Chinese sources for the cell packs,” Kothandaraman said. He explained that thanks to the tariffs, making batteries domestically with Chinese cells “therefore turns out for us that whether we make it domestically or whether we make it outside the U.S., our costs are becoming approximately the same. And the cost impact is significant.” In other words, the tariffs make domestic battery production less appealing than it was before. Kothandaraman said that the company is working on establishing a non-Chinese supply chain, which will take six to nine months.
NextEra’s Ketchum said that the company had made “arrangements” to buy batteries made in the U.S. “for a significant portion of our backlog,” and that its contracts for non-Chinese-sourced batteries required the supplier to cover any tariff-related costs. Ketchum did say that the domestic batteries meet local content requirements for tax subsidies under the Inflation Reduction Act, however “there are certain components that come in from outside the United States.” Overall, Ketchum said, “our tariff exposure on batteries is expected to be negligible.”
All four companies are heavily exposed to various energy regulatory and subsidy plans that may or may not survive the double-whammy of the congressional Republicans’ budget-making priorities and the Trump administration’s desire to roll back environmental regulations.
Tesla’s revenue from emissions credits that other carmakers buy to comply with California’s fleet emissions standards was $595 million in the first quarter of this year, compared to $409 million of net income — implying that the company would have lost money if not for the credits. This Trump administration has already attempted to take away California’s ability to set emissions standards, as it did the first time around. Then it was not successful, and this time it might not have to be — the Supreme Court on Wednesday indicated that it would be open to a lawsuit from the fossil fuel industry challenging California’s limits.
Kothandaraman said that “the lack of certainty” around the fate of the Inflation Reduction Act, which is currently being hashed out in Congress, “is definitely a factor” in explaining what one analyst described as “a bit of paralysis on the customer side.” He was hopeful that “demand will be unlocked” once there’s “clarity” on IRA tax credits.
Meanwhile, GE Vernova said that offshore wind orders had fallen by 43%, “as a result of ongoing U.S. policy uncertainty and permitting delays.” It also took a $70 million charge related to the cancellation of a deal to supply 18-megawatt turbines in New York.
Musk bragged that Tesla’s Megapack utility storage system “enables utility companies to output far more total energy than would otherwise be the case,” and that “utility companies are beginning to realize this and are buying in our Megapacks at scale.” While the company deployed almost 40 gigawatt-hours of battery storage in the past 12 months — an impressive amount based on the current level of grid battery storage in the U.S. — Musk predicted that Tesla could end up deploying “terawatts” of storage on an annual basis.
NextEra has a large renewables development business, and Ketchum sees the uptick in demand for electricity as a boon: “When I look at the demand and the outlook in the renewable sector going … we just continue to see strong demand across the board, with hyperscalers being a nice sized part of that.”
GE Vernova competed with NextEra for the most investor-friendly demand growth story — though its is not a particularly climate-friendly one. The company says it has a backlog of 29 gigawatts of natural gas turbine orders, with an additional 21 gigawatts of reservations that will turn into future production. Its earnings before interest, taxes, depreciation, and amortization for its power business jumped from $345 million in the first quarter of last year to $508 million in the first quarter of this year, while its margins grew from 8.6% to 11.5%.
About a third of its reservations for turbines are for data centers, Scott Strazik, the company’s chief executive said. Some more were to provide baseload power. And the rest? “A healthy amount of these are also F-class gas turbines to just strengthen the durability and the resiliency on the grid,” he said.