New EV rules set to speed change in shipping services

The Biden administration’s proposals would force U.S. automakers to dramatically increase production of electric cars and trucks over the next decade, putting more urgency on building supply chains for raw materials to reduce the industry’s reliance on China. This will have a major impact on shipping services such as land transport.

The U.S. Environmental Protection Agency on Wednesday (April 12) announced a proposed rule that would impose stricter limits on average tailpipe emissions from U.S.-made vehicles. The proposal would lower the allowable limit so much that automakers would struggle to comply unless two-thirds of the vehicles they produce are zero-emission electric vehicles by 2032.

Automakers generally recognize that electric vehicles represent the future of the industry, but Wednesday’s proposal would significantly accelerate that trend. The proposal will be open for public comment before being finalized. It would dramatically reduce the leading cause of air pollution in the United States, as well as the greenhouse gases that contribute to global air pollution.

EPA Administrator Michael Regan said: “By proposing the most ambitious pollution standards ever for cars and trucks, we are delivering on the Biden-Harris administration’s commitment to protecting people and the planet, ensuring a dramatic reduction in dangerous pollution. air and climate pollution and ensure significant economic benefits, such as lower fuel and maintenance costs for households.”

The proposal, which would apply to new light-duty vehicles produced in 2027 and later, would be the toughest environmental standards ever imposed on cars by the federal government. If it does manage to force the industry to make electric vehicles two-thirds of production, it could also exceed President Joe Biden’s previous goal of making 50 percent of new cars plug-in hybrids by 2030 cars or achieve completely zero emissions.

Supply chain issues

Even before the EPA released its proposed rule on Wednesday, the Biden administration has been moving to strengthen the U.S. market for electric vehicles and build a raw materials pipeline to reduce the auto industry’s reliance on China for key raw materials.

Achieving that cut will be no small task. China produces three-quarters of the world’s lithium-ion batteries, a key component of most electric vehicles on the road, according to an analysis last year by the International Energy Agency.

China also dominates most of the market for these battery components, including lithium, cobalt and graphite. More than half of the world’s capacity to process and refine these materials is in China, according to the International Energy Agency.

As of last year, the U.S. accounted for just 10 percent of global electric vehicle production and just 7 percent of battery capacity, according to the International Energy Agency.

Capital construction project

The Inflation Reduction Act, passed last year, contains hundreds of billions of dollars in climate-related spending, including enacting massive tax breaks limited to electric vehicles that are at least partially made in the United States. The tax breaks would last for several years, but over time the restrictions became tighter, creating an incentive for manufacturers to “land” their production in the US.

Tax breaks for batteries used in electric vehicles, requiring the raw materials used to assemble them to come from domestic sources, or countries that already have a trade agreement with the United States.

Other legislation aimed at spurring investment in the U.S., including a key bipartisan infrastructure bill and the CHIPS and Science Act, also contains funding and incentives that will help build the electricity base in the U.S. facility.

Achievable goals

Create an EV supply chain centered on domestic production and imports from friendly countries, Luke Tonachel, senior director of clean vehicles and buildings at the Natural Resources Defense Council, told VOA It’s ambitious, but achievable.

Necessary raw materials can be obtained from U.S. allies, but the capacity to process them needs to be built at home, Tonacher said. Building that capacity is already underway, he said.

“There are strong incentives to establish battery manufacturing and supply chains in the U.S.,” he said. He also added that he thinks the U.S. government’s time frame is workable, especially now that the new standards have created certainty about future demand for electric vehicles.

“It’s realistic,” he said. “These are known technologies. We can certainly gain more economies of scale as the volumes increase.”

Automakers indecisive

Industry representatives said that achieving the government’s goals required many different efforts to be successful simultaneously, not all of which were under their control. For example, a nationwide network of charging stations and capacity additions to meet new electricity demands are critical to driving customer demand.

“It’s radical and a lot of parts have to work together perfectly,” Genevieve Cullen, president of the Electric Drive Transportation Association, told VOA. “In addition to the technology part, the market part has to come into play, and supply chain speed is part of that. Consumer incentives are working to help them get into the equation, and we need to continue to expand infrastructure at a rate that meets or even exceeds the demand we started with so that people Confidently move to battery drive.”

John Bozzella, president of the trade group Alliance for Automotive Innovation, said in a blog post Wednesday that the government’s plan is “radical by any measure” and its success will be more than just It’s up to automakers to ramp up production.

“In a way, the baseline policy framework for the transition has come into focus,” Bozzella said. “But whether the bipartisan infrastructure laws — the Inflation Reduction Act, and the incentives and supply-side provisions for charging infrastructure in the Chips and Science Act — are enough to support the kind of power that the proposed standards envision in the coming years. Electrification remains to be seen.” Vancouver Shipping Services agrees with the above point of view.