US DOE Policy & Action for EV Battery Supply Chains, Decarbonization and Funding

The U.S. Department of Energy (DOE) announced new immediate policy actions to scale up a domestic manufacturing supply chain for advanced battery materials and technologies. These efforts follow the 100-Day review of advanced batteries—directed by President Biden’s Executive Order on America’s Supply Chains—which assesses vulnerabilities and opportunities in the current and forecasted battery supply chain landscape, and identifies policy recommendations to address them. Together, these actions will position the U.S. to lead an emerging global market, secure the nation’s long-term economic competitiveness, and create good-paying jobs for American workers, while supporting the Biden Administration’s bold decarbonization goals.

“We’re going to need a significant increase in battery production to supercharge America’s clean energy future, which means we urgently need to build up our capacity to research, develop, manufacture, and market batteries right here at home,” said Secretary of Energy Jennifer M. Granholm. “Strengthening our domestic supply chain will accelerate our efforts to decarbonize the economy—helping to power electric vehicles and boost grid storage and resiliency. We must seize the opportunity for the U.S. to lead an emerging global industry to create good-paying jobs for American workers that will be in demand for decades to come.”

Advanced, lithium-based batteries play an integral role in 21st-century technologies such as electric vehicles and stationary grid storage that will be critical to securing America’s clean energy future. Today, the U.S. relies heavily on importing advanced battery components from abroad, exposing the nation to supply chain vulnerabilities that threaten to disrupt the availability and cost of these technologies, as well as the workforce that manufactures them. DOE’s battery supply chain assessment found that currently, the U.S. has less than a 10% global market share for manufacturing capacity across all major battery components and cell fabrication.

As demand for EVs and stationary storage alone is projected to increase the size of the lithium battery market five- to ten-fold by the end of the decade, DOE’s assessment underscores the need for robust and swift policy action to support the full U.S. battery supply chain—reducing risks, spurring domestic job creation, and boosting demand for technologies that are critical to addressing the climate crisis.

While today’s immediate executive actions are important, the Biden-Harris Administration also called on Congress to make critical investments to grow America’s ability to produce high-capacity batteries and the products that use them

 

The new DOE actions announced today include:

  • Strengthening U.S. manufacturing requirements in federally-funded grants, cooperative agreements, and research and development (R&D) contracts—DOE today announced a new policy to support domestic job creation by ensuring that all innovations—including those relating to advanced batteries—developed with taxpayer dollars through DOE Science and Energy Programs require awardees to substantially manufacture those products in the United States. DOE will implement these actions through a Determination of Exceptional Circumstances under the Bayh-Dole Act. This policy change will cover the more than $8 billion in climate and energy innovation funding requested in DOE’s FY22 budget, including more than $200 million to support battery technology research, development, and demonstration.
  • Releasing a national blueprint to develop a domestic advanced battery supply chain—The Federal Consortium for Advanced Batteries (FCAB)  released the “National Blueprint for Lithium Batteries 2021-2030” which codifies the findings of DOE’s battery supply chain assessment, and details how strategic and immediate federal investments will position the U.S. to lead an emerging global market. The blueprint lays out five critical goals and key actions to guide federal agency collaboration to secure the nation’s long-term economic competitiveness and create good-paying jobs for American workers, while supporting the Biden Administration’s decarbonization goals. In addition to DOE, FCAB is led by the Departments of Defense, Commerce, and State and includes many organizations across the federal government.
    • On Monday, June 14, at 10:00am ET, Secretary of Energy Jennifer M. Granholm will host a virtual conversation with members of the lithium battery industry to discuss the new strategy.
  • Providing financing to the advanced battery supply chain for electric vehicles—DOE’s Loan Programs Office (LPO) published guidance and released a factsheet to clarify the various uses of the Advanced Technology Vehicles Manufacturing Loan Program (ATVM), which has approximately $17 billion in loan authority. The ATVM program can make loans to manufacturers of advanced technology vehicle battery cells and packs for re-equipping, expanding or establishing such manufacturing facilities in the United States.
  • Procuring stationary battery storage—In support of the Administration’s goal for 100% clean electricity by 2035, the Federal Energy Management Program (FEMP)—housed in DOE’s Office of Energy Efficiency and Renewable Energy—is kicking off a federal government-wide energy storage opportunity diagnostic that will evaluate the current opportunity for deploying battery storage at federal sites. FEMP will also launch a call for projects from federal sites interested in deploying energy storage projects, and provide the necessary technical assistance to get those projects built. These actions build on steps taken earlier this year to leverage $13 million in FEMP’s Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) grants to unlock an estimated $260 million or more in project investments, including battery storage projects.

In addition to DOE’s 100-Day Review on advanced batteries, the Departments of Commerce, Defense, and Health and Human Services also today announced actions to spur domestic supply chains in the other three critical sectors outlined in the President’s Executive Order: semiconductors, critical minerals, and pharmaceuticals. Click here to view the White House fact sheet with the full list of immediate and recommended actions.

 

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