Emergency measures: How President Biden aims to boost clean tech production in the name of defence

White House announces sweeping package of executive orders designed to turbocharge US and global solar and heat pump development

President Joe Biden yesterday responded to rising fossil fuel costs and the continued Congressional deadlock that is blocking White House efforts to pass climate legislation by approving a package of emergency measures designed to accelerate US clean energy technology manufacturing.

Specifically, Biden approved the use of the Defense Production Act (DPA) to accelerate domestic production of clean energy technologies, including solar panel parts and heat pumps; instructed federal procurement officials to develop master supply agreements that are designed to boost US solar technology manufacturing capacity; and announced a 24-month ‘bridge’ that exempts solar panels and components from Southeast Asia from import tariffs. The White House said the pause in the long-running solar technology trade tussle with China would “ensure the reliable supply of components that US solar deployers need to construct clean energy projects and an electric grid for the 21st century, while reinforcing the integrity of our trade laws and processes”.

Speaking at a press briefing yesterday, White House press Secretary Karine Jean-Pierre said the package underscored how the President was “putting the full force of the federal government behind supporting American clean energy producers.”

The tariff exemption was welcomed by many green industry groups, who argued it would help boost US solar capacity. “The president’s announcement will rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” said Heather Zichal, CEO of the American Clean Power Association, referencing the on-going US government investigation that triggered the imposition of tarrifs on solar imports from the southeast Asian companies that dominate the global solar technology market.

The invoking of the DPA could also have impacts beyond the US, with the White House having previously floated the idea of ​​exporting heat pumps and other clean technologies to Europe to support the EU’s efforts to rapidly curtail imports of Russian fossil fuels in response to the Kremlin’s invasion of Ukraine.

The Act allows the federal government to directly order manufacture production in order to enhance national defense and has been used in recent years to produce medical equipment in response to the coronavirus pandemic, boost production of lithium and other raw materials for the electric vehicle market, and tackle shortages of baby formula.

As such, the White House this week argued that the combination of Russian aggression, rising energy costs, and climate change provided a national security justification for the use of the DPA to boost production of solar panel components, building insulation, heat pumps, hydrogen and fuel cell technologies, and power grid infrastructure equipment, all of which should serve to dampen demand for fossil fuels.

“Today’s clean energy technologies are a critical part of the arsenal we must harness to lower energy costs for families, reduce risks to our power grid, and tackle the urgent crisis of a changing climate,” the White House said in a statement. “From day one, President Biden has mobilized investment in these critical technologies. Thanks to his clean energy and climate agenda, last year marked the largest deployment of solar, wind, and batteries in United States history, and our nation is now a magnet for investment in clean energy manufacturing… While President Biden continues pushing Congress to pass clean energy investments and tax cuts, he is taking bold action to rapidly build on this progress and create a bridge to this American-made clean energy future.”

The package also includes plans to permit more clean energy projects on public lands, boost community-based clean energy in cities and rural areas, invest in clean energy infrastructure in Puerto Rico, and instruct the Export-Import Bank of the United States (EXIM) to prioritise investments to expand clean energy manufacturing.

Many Democrat supporters, including many business leaders, remain frustrated at the White House’s failure to push more ambitious climate and green infrastructure legislation through Congress. But with efforts to get such a package through the Senate continuing to face opposition from rebel Democrat Joe Manchin, the White House has this week demonstrated that other policy levers exist that could serve to accelerate clean tech development and deployment. The moves are likely to win over critics who maintain they are a long way short of putting the US on a pathway to delivering on Biden’s net zero goals, but they should provide a much needed boost to the US, and potentially the European, clean tech sector at a time when energy prices are still rising.

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