What new federal funding will mean for making batteries

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Welcome back to The Spark!

The US is on a climate tech spending spree. Over the past year, federal action has set aside hundreds of billions of dollars for energy and climate. Now, we're starting to see some of that money actually get handed out.

The Department of Energy just announced about $2.8 billion in grants to companies working to make battery materials and components in the US. I wrote about the funding last week when it was announced-for this week's newsletter, let's dig deeper into why this money is important and hear from one of the winners about what it will mean for their work.

The Context

Over the past several months, there's been what seems like an endless stream of announcements from companies building EV and battery manufacturing in the US.

The announcements are an exciting first step to getting more batteries built in the US. But so far, these planned facilities are in a deceptively small part of the battery supply chain.

A quick refresher on what it takes to make a battery:

• Get raw materials like lithium out of the ground
• Process and refine the raw materials to get them into a form that can go into batteries
• Make the pieces of a battery (especially the electrodes)
• Put the electrodes together with other components to make a battery cell
• Assemble the cells into packs and put batteries into EVs

Most of the investment so far has been biased towards the last few steps of the battery supply chain: building cells, assembling battery packs, and putting batteries into EVs.

But many experts see a need to build earlier parts of the supply chain in the US, too. Recent policy is aimed at driving that: in the new EV tax credits in the Inflation Reduction Act, there's not only a requirement for batteries and EVs to be made in North America-there's also requirements about where the minerals and metals are sourced from and processed. (For more on those tax credits check out this story.)

The Funding

This round of grants, funded by the Bipartisan Infrastructure Law passed in November 2021, is an attempt to help earlier parts of the battery supply chain catch up. The spending is targeted at the middle of the process: refining raw materials and building battery components.

In total, there's $2.8 billion for 20 projects across 19 companies. (Ascend Elements, a recycling and refining company, won two grants for two different steps in their process, totaling nearly half a billion dollars.)

Here's what stuck out to me about the awards:

• The funding is largely for commercialization, not research, so there's a lot here that could quickly affect markets.
• There seems to be a focus on lithium processing, with four companies winning grants in this area. Nickel and graphite processing also made the list.
• Companies making lithium iron phosphate batteries got a couple of grants. This chemistry is a lower-cost, slightly lower-performance version of lithium-ion batteries. These are a growing part of the market and could become even more important since they don't contain cobalt, one of the metals that experts are most worried about.
• Silicon anodes won a couple of grants-these aren't used widely today in EVs but could be coming soon, and will likely help push range higher. (More on that tech here.)

One winner

After the announcement, I spoke with Ryan Melsert, CEO of American Battery Technology Company (ABTC). ABTC is a battery materials company working both on battery recycling and on a new method of lithium extraction and refining.

The company received about $58 million to build a commercial-sized lithium processing facility in Nevada. The project was already in progress, but the influx of federal cash really helped speed up the timeline, Melsert says. We're happy with the tailwinds we have and the support we've received," he says.

But ABTC is still on the lookout for even more funding opportunities, especially to support their mining activities, Melsert says. He has his eyes on the Defense Production Act, which President Biden enacted earlier this year to support battery supply in the US and will be focused largely on mining.

It's not all about the money though. I think there are still more hurdles to go through," Melsert says. The permitting process in particular could be a barrier to its and other new mining projects.

What's next

There's plenty more money where this funding came from. Expect to see billions more in grants from the Bipartisan Infrastructure Law handed out to battery companies in the coming months.

There's also funding from the CHIPS and Science Act, the Inflation Reduction Act, and the Defense Production Act coming. It's like climate tech Christmas!

Keeping up with climate

Bill Gates is expanding his climate fund. Historically focused on projects that cut emissions, Breakthrough Energy Ventures will start funding adaptation projects that aim to protect against the damages of climate change. (MIT Technology Review)

My colleague James Temple reported on this story live from the Breakthrough Energy Summit in Seattle. Check out his other story from the event to hear what Gates, John Kerry, and Jennifer Granholm had to say about the state of climate change.

We're coming up on the UN climate talks, or COP27, in Egypt.

After a year of deadly disasters, expect to see countries pushing for more action, especially from wealthier, higher-emitting countries like the US. (Inside Climate News)

The UN released a report today that found that if countries stick to current pledges, we'll see between 2.1 and 2.9 C of warming, much more than the 1.5 C target that could prevent some of the most catastrophic climate damages. (New York Times)

If history is any indicator, this meeting probably won't spark blockbuster changes. Read James's preview of last year's COP here, where he talks about the role of the UN talks and where we should look for meaningful change. (MIT Technology Review)

Flooding from Hurricane Ian in Florida caused several EVs to catch fire after saltwater damaged their batteries. The fires raised safety concerns and put a political target on EVs, though experts point out the incidents are relatively rare. (E&E News)

A cobalt mine, which opened earlier this month in Idaho, could be a preview of the future of mining in the US: more mines across the West and more conflicts over them. (High Country News)

While researchers and companies are working to build batteries without cobalt, a new paper published this week argues that the metal won't be going away anytime soon (Nature Energy)

Once known as a pioneer in green vehicles, Toyota has lagged on EVs. Now, the company is scrambling to decide on a strategy in an effort to catch up with Tesla and other carmakers. (Reuters)

Just for fun

Researchers are using a Ring doorbell for rats" to watch out for invasive rodents at an island nature preserve off the coast of California.

Once rats get established, it's really tough to get them out. So researchers are keeping watch with cameras rigged with AI-based rat detection to see if any rat explorers make landfall.

This may be the only example of expanded surveillance technology that I'll enthusiastically support.

That's all for this week - thanks for reading! If you have feedback or ideas for what you'd like to see in future newsletters, you can drop me a line or find me on Twitter. See you next week!

Casey