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The Potentially Lucrative Afterlife of Electric-Vehicle Batteries
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Welcome back. This week we have news of a big utility's ambitious decarbonization plan, a setback for European politicians who are seeking to classify some gas and nuclear investments as sustainable—and a lot about electric vehicles.
The EV batteries currently on the road generally have a good few miles left in them, but that will change fast. By 2030, millions will be available for reuse every year. They might not have enough juice left in them to be used in a car, but some could have a second life on the electricity grid.
A key question in the years to come will be how the economics of combining old batteries and using them as energy-storage units—dubbed "second life" applications—stack up against the money that could be made from recycling old batteries and harvesting materials such as lithium, cobalt and nickel to make new ones.
[Continued below...]
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Content from our Sponsor: DELOITTE
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How Systems Approaches Can Drive a Rapid, Profitable Path to Net Zero
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Panelists at the recent WSJ Sustainable Business Forum discuss an analysis showing the high cost of climate inaction and how to apply systems principles to rapidly decarbonize the economy. Read More ›
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Emma Nehrenheim, chief environmental officer at Swedish battery maker Northvolt, said recycling has become a cost-efficient way of recovering valuable metals, while second-life uses haven’t been proven on a large scale. “Comparatively, the economics of immediate recycling are compelling,” she said.
But others envision a three-stage life cycle for batteries, with recycling being the final phase. Whatever happens, with demand for scarce battery metals only going in one direction, the market for old batteries looks set to become a lucrative one. Roughly 1.7 million will be available for reuse in 2030, with a combined value of $5.1 billion, according to one research firm.
Click here to read the full article by Dieter Holger and Giulia Petroni.
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✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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🔋 Surging materials costs for batteries have wiped out the profit Ford had expected to make on the electric Mustang Mach-E, the company's finance chief said this week.
🔌 The Biden administration wants fast EV-charging stations every 50 miles along major highways. Some Western states say it will be difficult, if not impossible, to run EV chargers along desolate stretches of highway.
⛽ An emissions-cutting plan approved by European lawmakers this week includes a ban on the sale of conventional cars after 2035. Auto makers say they need more time to make the shift.
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Power supplier targets near-total decarbonization. NextEra Energy, the owner of Florida Power & Light and one of the world’s biggest renewable energy developers, plans to make most of its operations carbon-free by 2045 by building huge solar farms, drastically increasing its energy-storage capacity and converting its power plants to run on hydrogen.
Other major U.S. utilities have set out net-zero plans that rely on offsets or carbon-capture technology, but not the significant outright emissions cuts envisioned by NextEra. It hasn’t put a price tag on achieving its goal, but it is expected to cost tens of billions of dollars. NextEra dubs the plan "real zero," but it wouldn’t necessarily eliminate all carbon emissions. The company may keep some gas-fired plants open to run on so-called renewable natural gas, or methane captured from organic waste, during periods of peak power demand.
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86,000
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Megawatts of solar-generating capacity that NextEra is planning to build to serve its Florida utility customers, up from about 4,000 megawatts today
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BP takes lead on giant hydrogen project. One of the technical challenges posed by NextEra's ambitious climate plan is bringing down the cost of green hydrogen, which is made using renewable electricity. Investment in the technology, which remains expensive and scarce, is rising. BP this week said it would take the lead on a more-than-$30 billion project in Australia, one of a handful of hydrogen megaprojects.
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Coal's future. Record coal prices didn't help BHP Group, the world's largest miner, find a buyer for the Mt Arthur mine, one of Australia’s biggest coal operations. BHP's decision to close the Australian pit in 2030 was welcomed by activists who want big miners to manage coal pits to an early closure rather than
selling them to smaller companies. The Mt Arthur mine is technically complex and will have a large cleanup bill when it closes.
In the U.S., Ameren's aging Rush Island power plant south of St. Louis was headed for retirement this year. But because the region’s grid operator needs the plant’s electricity to reduce the risk of blackouts, it likely will keep running for several years longer, illustrating the difficult decisions that utilities and power grid officials face due to projected electricity shortages.
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“It is sadly ironic that the grid operator says Ameren’s uncontrolled coal-burning power plant is needed for reliability because of possible capacity limitations due to extreme heat and drought caused by climate change.”
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— Jenn DeRose, a Beyond Coal Campaign representative for the Sierra Club
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The EU is developing a ‘green taxonomy’ as it transitions away from coal-fired power plants like this one in Germany. PHOTO: FRIEDEMANN VOGEL/SHUTTERSTOCK
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EU plan for gas, nuclear stumbles. The European Union's executive body angered environmentalists—and some investors—this year when it proposed adding some natural-gas and nuclear-energy investments to a list of activities deemed sustainable under a new investing rulebook. Critics of the plan said it undermined the purpose of the so-called green taxonomy, which is supposed to channel capital into renewable energy and other sustainable activities.
This week the plan ran into trouble in the European Parliament. Lawmakers on two committees voted in favor of a resolution that opposed including gas and nuclear energy in the so-called green taxonomy ahead of a parliamentary vote that is due to take place next month. That means the plan could be scrapped, depending on the result of that vote.
SEC probes Goldman Sachs over ESG funds. The Securities and Exchange Commission is investigating Goldman Sachs's asset-management arm over its funds that aim to invest based on environmental, social and governance standards, according to people familiar with the matter. The probe, which could end without formal enforcement action, comes at a time when some regulators are expressing concern that ESG can be a superficial way to market financial products.
Ratings company raises $500 million. Some of the skepticism around sustainable investing centers on ESG ratings, with companies' scores often varying widely depending on the rating provider. But there is still an appetite to invest in ratings startups that say they can do a better job.
Paris-based EcoVadis says it is different from other players in this crowded field because it assesses the sustainability performance of a company’s suppliers and supply-chain partners. It just received $500 million in a funding round led by General Atlantic and Astorg.
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Wells Fargo's Hiring Practices and Workforce Diversity in Spotlight
Wells Fargo & Co.'s hiring practices and ethnic diversity in its workforce are in focus after a series of New York Times articles over the last week claimed that the bank's "diverse" hiring policies led to sham interviews and that federal prosecutors had opened a criminal investigation regarding potentially illegal labor practices, citing people familiar with the matter. The bank issued a statement Thursday responding to the articles, saying that "no one should be put through an interview without a real chance of receiving an offer, period. The diverse slate guidelines we put in place are meant to increase diverse representation across the company and we can see meaningful results in our hiring data since
2020." Wells Fargo said it had been making progress in increasing ethnic diversity in its workforce, including in executive positions.
This is a sample of exclusive analysis of sustainability news from the Journal’s environment, social and governance (ESG) research analysts, whose work is primarily published by Dow Jones Newswires to help institutional investors and wealth managers integrate ESG factors into portfolio models, risk management programs and financial advice. The commentary by our research analysts is independent of the news coverage by reporters at the Journal. For more information about Dow Jones Newswires, click here.
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The United Nations-backed "Race to Zero" campaign group laid out minimum standards for companies committing to cutting greenhouse gases, including a requirement to curb fossil-fuel lending. (Reuters)
The Glasgow Financial Alliance for Net Zero published guidance for financial institutions. Climate campaigners said the rules don't sufficiently curb GFANZ members' fossil-fuel lending. (Guardian)
“F— it, let's try again," was one reaction from a European parliamentary source after European Union plans to overhaul its carbon market ran aground. (Euractiv)
Europe's demand for rubber to make tires and other products is a major contributor to the loss of Africa's rainforests, a new report found, but rubber isn't included in an EU law that aims to curb deforestation outside the bloc. (Global Witness)
A pigment that gave Picasso's blue-period paintings their characteristic hue could be the key to recovering precious metals from nuclear and electric waste. (Mining.com)
The case for private equity to take a lead in sustainability depends on the influence firms can exert over their portfolio companies. (Harvard Business Review)
Energy company HH2E will invest roughly $1 billion in a plant to produce green hydrogen in northern Germany, one of the biggest bets so far on the technology. (Financial Times)
Argentina's remote Tierra del Fuego region is seeking to attract investment in wind farms and electrolyzers to make hydrogen. (Bloomberg)
Some scientists have quit Running Tide, a startup that wants to remove carbon dioxide from the atmosphere by sinking kelp to the seabed, over concerns about potential ecological harms. (MIT Technology Review)
Uncertainty about how expensive carbon offsets could get is prompting some companies whose climate strategies rely on them to expand their own supply. U.K. beer brand Brewdog, with a big tree-reforestation project in Scotland, is one example. (Edie)
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