GREENWIRE | The Biden administration’s climate change agenda has spurred an unprecedented lobbying boom driven by mineral and battery companies in search of incentives for expanding North American operations.

More than 30 of those companies retained lobbying firms for the first time since President Joe Biden took office in 2021, an E&E News analysis of disclosure records found, while many others boosted their lobbying might or greatly increased spending.

The National Mining Association, which had reduced its spending amid the coal downturn, more than doubled its federal lobbying expenditures from 2020 to 2022, when it reached $2.2 million.

The rush to influence lawmakers and agencies is evidence of the challenges and opportunities related to meeting the president’s goal of seeing half of all new cars sold be zero-emission vehicles by 2030. That push requires a mineral and battery production capacity that largely resides abroad — something policymakers are scrambling to change.

“There’s a real frenzy of activity and a genuine excitement in the manufacturing spaces that were very precarious investments a short time ago, said Mike Carr, a former Hill aide and Obama administration official who is now partner at the bipartisan lobby firm Boundary Stone Partners. “So everybody’s scrambling to ensure that their voices are heard.”

Boundary Stone has signed clients including solar cell maker Hanwha Q Cells, battery storage company Antora Energy Inc. and battery maker Form Energy. The firm last year launched the Coalition for American Battery Independence to push for U.S. battery incentives.

Critical minerals, battery and other clean-tech companies have already scored major policy wins during the Biden administration and are now working to secure their vision of how the infrastructure law, the Inflation Reduction Act and other initiatives are implemented.

The Inflation Reduction Act, passed by Democrats under budget reconciliation, includes tax incentives for electric vehicles, but with certain sourcing mandates championed by Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) to increase domestic production of minerals and other components.

The Treasury Department last month released long-awaited guidance on how to implement those requirements. It’s a document lawmakers, automakers and miners have been eager to shape.

Biden has also invoked a Cold War-era law to boost critical minerals. The Inflation Reduction Act, or IRA, appropriates up to $500 million under the Defense Production Act to help U.S. and Canadian companies strengthen mineral supply chains.

Other wins: The Department of Energy got $55 billion from IRA for loans to support and scale up EVs and battery components, and the $1.2 trillion bipartisan infrastructure law included $7 billion to boost domestic battery supply chains.

LG Chem Ltd., Syrah Resources Ltd. and Ioneer Ltd. have all been offered loans or loan guarantees from DOE for various projects. Since 2021, LG Chem has spent $1.2 million in lobbying and Ioneer has spent $250,000.

Many companies are also pushing Biden and Congress to accelerate the permitting process for infrastructure projects, including transmission lines to help meet the administration’s green goals. It’s currently the most prominent energy and environment legislative fight.

And then this week, EPA announced draft car tailpipe emissions rules that could lead to electrification of 67 percent of new sedans, crossovers, SUVs and light trucks.

Ben Steinberg, executive vice president and co-chair of Venn Strategies’ critical infrastructure group, said the focus on mining and EV battery supply chains is part of across-the-board growth in clean energy manufacturing. Steinberg currently leads the Battery Materials and Technology Coalition.

“The mining sector is now part of that story for the first time in the country,” said Steinberg. “It is an exceptional time across many different sectors right now.”

A national priority

Critical mineral and battery companies have long been lobbying the federal government and were keen on former President Donald Trump’s support for mining.

But the advocacy accelerated with Biden setting climate and manufacturing goals, and has continued as the president’s agenda materializes, said Joe Britton, principal of Pioneer Public Affairs.

“Biden put a clear focus on where he wants to see manufacturing growth, and the emission reduction potential that’s inherent in battery utilization is enormous,” said Britton, former chief of staff to Sen. Martin Heinrich (D-N.M.), who has made electrification a priority.

Political prioritization is important, he said.

“Some of these big multinational corporations can build anywhere in the world, and it’s really important for them to hear that this is a priority for the federal government,” said Britton.

“It matters to these companies in a big way when they’re deciding where to build billion-dollar facilities,” he said. “Knowing that there’s durable political support for this manufacturing and job growth really matters.”

Pioneer’s lobbying clients include the Solar Energy Industries Association and the Zero Emissions Transportation Association, or ZETA.

Among the companies that have retained lobbyists since 2021 are Piedmont Lithium Inc., which is hoping to mine lithium in North Carolina. It retained Venn Strategies in 2021 to lobby on matters surrounding mining, processing and manufacturing of lithium, and has paid $360,000.

“Venn Strategies has been very helpful as we develop our projects, given their strategic importance in boosting the domestic production of critical battery materials, and as we move through the grant selection and loan application processes with the U.S. Department of Energy,” said Malissa Gordon, Piedmont’s vice president of government relations.

“Building a robust EV supply chain is a key initiative for the U.S., so there is a lot of opportunity to engage with D.C. stakeholders as the U.S. builds its policies,” she said.

Lobbying muscle

ElementUS Minerals retained the firm Brownstein Hyatt Farber Schreck last year and has paid it $80,000. The company plans to extract and recycle minerals like rare earths, iron and titanium.

Graphite One, a Vancouver, Canada-based company exploring a graphite mining and processing site in Alaska, retained Capitol Hill Consulting Group’s Kristina Wilcox, a former Capitol Hill aide, in 2021 and has paid the firm $210,000.

US Strategic Metals, formerly Missouri Cobalt, hired Akin Gump Strauss Hauer & Feld last year, and former Rep. Filemon Vela (D-Texas) is part of the team representing the company. US Strategic Metals has paid the firm $120,000.

The lobbying effort is reaching beyond the United States, to include controversial efforts to mine the ocean floor for mineral-rich nodules. Vancouver-based Metals Co., which is hoping to secure permission to mine a swath of the Pacific Ocean seabed, hired Bracewell LLP.

Scott Segal, a partner at Bracewell, said there’s no question that the critical mineral supply chains are turnkey for the clean energy transition and EV battery production will stall without the necessary minerals.

Environmentalists, who oppose deep-sea mining, have expressed alarm with the rush to mine for clean tech and have called for new rules to protect the environment, secure community consent and make sure taxpayers get their due. But the prospects of mining reform in Congress are dim, with Republicans controlling the House and many Democrats on board with more domestic production.

“The challenge for batteries isn’t just one of scale, but one of time,” said Segal. “That’s put the focus on deep-sea mining. That’s why there’s so much interest in it.”

Companies are also keen on the administration’s implementation of the Inflation Reduction Act’s advanced manufacturing tax credit for clean energy and a bonus to the wind and solar credits for equipment that has a certain level of domestic content.

“Manufacturers are sitting there waiting to make multimillion-dollar bets if it comes out the way that they’re looking for,” said Boundary Stone Partners’ Carr.

When global rail manufacturer CRRC (China Railway Rolling Stock Corp.) entered the U.S. passenger rail market nearly ten years ago, winning a $560 million contract to manufacture new railcars for the Massachusetts Bay Transportation Authority (MBTA), its bid amounted to only about half as much as its market competitors. It was the Chinese SOE’s (state-owned enterprise) first entry into the U.S. transit market, adding to its already monopolistic self-declared 83% share of rail rolling stock manufacturing worldwide.

In the years since MBTA turned its passenger train manufacturing over to China, CRRC has been awarded more than $2.6 billion in U.S. taxpayer-supported contracts to make passenger railcars for Boston, Chicago, Philadelphia and Los Angeles. Federal funding played a part in three of the four contracts. In the process, according to an Oxford Economics report (download below), the U.S. has lost thousands of domestic freight rail manufacturing and supply jobs to China.

As the U.S. Trade Representative (USTR) conducts its required review of Trade Act of 1974 Section 301 tariffs, it’s worth remembering that CRRC is just the kind of foreign entity that Section 301 of the Trade Act is intended to guard against.

In a letter to USTR Ambassador Katherine Tai, the Rail Security Alliance—representing domestic rail manufacturers and suppliers and the industry’s 65,000 family-wage jobs—urged the Biden Administration to maintain Section 301 tariffs “on all railcar parts, as this represents U.S. policy that has spanned Republican and Democratic Administrations and has wide bipartisan support on Capitol Hill.”

In calling on USTR and the Biden Administration to maintain these tariffs, RSA joins other American manufacturers and suppliers who urgently called on the need to safeguard the U.S. from China’s unfair trade practices.

Meanwhile, recent news coverage reports that CRRC may be blaming its litany of quality problems, train derailments, years-long production delays and management failures on Section 301 tariffs. As Commonwealth Magazine recently reported, an MBTA executive said the agency may be now looking “to ease up on tariffs and sanctions against China.” For the record, that is exactly the wrong thing to do.

While CRRC has made alarming inroads in the U.S. transit arena, quality issues aside, the threat to America’s freight railcar manufacturing industry is equally imminent.

Addressing Ambassador Tai, RSA commented on the critical role of freight rail in America’s critical infrastructure: “It safely and efficiently carries hazardous materials, military equipment, key commodities, energy products and everyday goods. In 2013, President Obama and Vice President Biden recognized freight rail’s importance to the security of critical infrastructure by issuing Presidential Policy Directive 21 (PPD-21), explicitly including the freight rail industry. It is vital to every state in the U.S.”

One only must look at Australia to see CRRC’s designs for the American freight rail market. In less than a decade, CRRC employed anti-competitive tactics to entirely wipe out Australia’s once-thriving domestic railcar manufacturing industry. Today, Australia’s railcar manufacturing is completely controlled by CRRC.

Then there’s the issue of China’s anticompetitive practices toward foreign firms in China: “For instance, foreign market access to China’s rail markets has decreased dramatically in recent decades. The Association of the European Rail Supply Industry (UNIFE) found that the Chinese rail market was only 17% accessible for the period of 2017–2019, as compared with 63% for the period of 2009–2011. China also has a long, continuing pattern of forced technology transfer in the rail sector.”

Given China’s playbook—as well as the fact that CRRC receives significant subsidies from the Chinese government, including $271 million in explicit government subsidies in 2020 and larger implicit subsidies—maintaining Section 301 tariffs on all rail components is not optional.

“The Center for Strategic and International Studies estimated that direct subsidies to Chinese firms represent less than 20% of total industrial spending. For instance, as one of the ten sectors China targets under the Made in China 2025 strategy, CRRC is also eligible to receive preferential subsidies and tax incentives for R&D. In addition, China reduced the income tax rate for high-tech firms like CRRC from 25% to 15% and raised the rate of additional deductions of R&D expenses from 50% to 75%.”

Equally troubling is the fact that CRRC has twice been included on the U.S. Defense Department entity list, and that company executives and employees have direct ties to the Chinese Communist Party and the People’s Liberation Army.

All of these factors enable CRRC to significantly underbid private companies for global rolling stock contracts, posing a direct threat to our domestic rail manufacturing industry and national security. All these factors warrant maintaining Section 301 tariffs on all rail components.

Voicing the interest of 65,000 American workers, RSA called on USTR and the Biden Administration to uphold America’s interests:

“Section 301 of the Trade Act of 1974 is a key enforcement mechanism that can be used to address a wide variety of discriminatory acts, policies and practices of U.S. trading partners. Current Section 301 tariffs are vital to push back aggressively and appropriately on China.”

And there’s no entity more in need of push-back than CRRC.

Emma Bishop, Assistant Vice President with Venn Strategies takes part in a panel discussion on energy.

December issue of CKJ, Clinical Kidney Journal, Volume 15, Issue 12, December 2022, Pages 2177–2185.