Net Zero

1. Coal rules survive, for now
2. Lucid visions
3. CATL goes European
4. Missing money
5. Debt swaps heat up

The faster Big Tech realizes its new nuclear power goals, ‘the better for everyone.’

Coal rules survive, for now

The US Supreme Court declined to block a major Biden administration climate regulation, but the rules targeting emissions from coal-fired power plants are far from safe. A group of Republican-led states had asked justices to freeze the rule while a lower court decides whether it’s lawful. The Supreme Court has recently rejected a number of environment-related stay requests. But the rules are still in jeopardy; Justices Brett Kavanaugh and Neil Gorsuch wrote they think the lower court will reject them, and when the case eventually winds up in front of them, as it most likely will, there’s a good chance the majority will still hold a sour feeling toward overly prescriptive federal regulations. The key variable is who the justices will be sitting across from: EPA attorneys in a Donald Trump administration would probably drop their defense of the rules. The good news, for the climate, is that market forces are already driving a steep decline in US coal power production.

“When we announced on January 1 of 2022 that we planned to launch a new global news organization, it sounded a bit crazy — even to us,” Semafor’s co-founders Justin Smith and Ben Smith wrote this morning, on our second anniversary. “We’re proud to say that, even amid global conflicts and harsh domestic politics, we’ve held our ground on the core issue of political polarization. We’ve earned the trust of sophisticated people in leadership roles around the world by focusing on what you need to know — not just what you want to hear. We’ve separated news from opinion in our Semaform, brought room for civil disagreement across our products, and pulled in views from all over the world.”

Thank you from the team at Net Zero for reading our work and attending our events, for your feedback, and of course your tips. It’s been an exciting two years and we’re just getting started!

Lucid visions

Peter Rawlinson is betting the top US carmakers are all wrong. The CEO of Lucid Motors is convinced he can sell consumers on all-electric luxury vehicles, even though the EV market is sputtering. Mercedes delayed its goal of being all-electric by five years and reassured investors it will keep classing up its gas-engine cars. Ford scrapped a $1.3 billion plan to convert a Canadian factory into an EV manufacturing hub; it will churn out the company’s flagship gas-powered pickup trucks instead. GM is going back to hybrids. Meanwhile, Lucid’s current model, Air, starts at $70,000 and its next one, Gravity, will be even pricier. Rawlinson is armed with a seemingly bottomless supply of cash from Saudi Arabia, whose sovereign wealth fund doubled down again this week on its investment in Lucid. In an interview with Semafor, he chatted about subsidies, Elon Musk’s political turn — “quite a situation” — and a tire-burning EV spin around a Saudi racetrack.

Inside a Chinese battery giant’s plan to become ‘more European’

As European officials heighten their scrutiny of Beijing’s clean-tech imports, Chinese companies are setting up shop on the continent, bringing them closer to a lucrative market and helping them avoid trade restrictions.

One giant firm is going even further, trying to morph into more of a European operation.

CATL, the world’s largest electric-vehicle battery company, is taking pains to localize its German business by reducing its Chinese headcount, straying from Mandarin as the lingua franca, and serving local staples — in addition to Chinese fare — in the factory canteen, its HR coordinator in Germany told Semafor in a rare interview.

“The company’s become more and more local, or European, than Chinese,” said Constance Ulbrich, who was the first employee hired for CATL’s Germany plant and who now leads learning and development.

The localization drive comes amid an uncertain political and economic environment for Chinese EV-related companies in Europe: While governments have generally welcomed Chinese battery investments, analysts say slowing domestic EV demand and the prospect of heightened regulatory scrutiny from Brussels could threaten the future of Chinese clean-tech investment.

White House Climate Advisor Ali Zaidi will join the Sustainability session at the Fall Edition of Semafor’s World Economy Summit on Oct. 25. The discussion will focus on the challenges posed by climate change and what they mean for the future of climate finance, decarbonization, and food security.

RSVP to this session and the World Economy Summit here.

Missing money

Climate project funding from the World Bank that is missing from the bank’s ledgers, according to an Oxfam analysis. The World Bank is the world’s top source of climate finance for developing countries, having lent out more than $100 billion for climate projects in the last seven years and committed to dedicate 45% of its portfolio to climate finance by 2025. But when researchers examined the bank’s records, they found major discrepancies between the amount of finance allocated for specific projects and what the bank actually reported spending — sometimes more, and often less, meaning the bank may actually be delivering less climate finance support than it claims.

Debt swaps heat up

El Salvador agreed to a so-called “debt-for-nature” swap, in which nations restructure their borrowing to focus on environmental protection. The country secured a $1 billion loan from JPMorgan — backed in part by Washington — to pay off outstanding debt, pledging to spend the $350 million it saved on river restoration. The deal follows a similar agreement between Gabon and Bank of America last year in which the African nation promised to divert savings to ocean conservation. Debt-for-nature swaps are becoming more popular with major banks; at least five more have deals in the works for countries including Ecuador and Barbados. The El Salvador loan also has political significance: The US has been sharply critical of the human rights fallout of the Latin American country’s crackdown on gang violence, but Washington’s support for the JPMorgan deal suggests it is willing to look past those concerns.

New Energy

• Two emerging makers of sustainable aviation fuel, Gevo, Inc. and Montana Renewables, secured a combined $3 billion in financing from the Department of Energy, the latest major fundraising win for SAF following big deals in recent weeks with Infinium and Twelve.
• Germany is taking steps to protect its domestic wind turbine manufacturers from competitors in China, including with new guarantees from the state-owned bank.

Fossil Fuels

• Oil prices fell following an apparent commitment by Israel not to target Iran’s oil facilities as conflict between the countries continues to escalate.
• Americans can look forward to low heating bills this winter, thanks to a glut of natural gas.
• ADNOC made a $3.6 billion investment in low-carbon ammonia production, the latest case of a Gulf state-owned oil company moving downstream to chemicals amid an uncertain future market for crude, Semafor Gulf reports.

Finance

• Climate tech investors in the US are sitting on their wallets to await the outcome of the presidential election.
• London is poised to be the premier global hub for climate transition finance, but only if it can find new ways to combat the practice and perception of greenwashing by institutional investors, an independent review commissioned by the UK government concluded.

Tech

• Nuclear power companies are proving helpful for Big Tech’s AI aspirations. And Big Tech is proving a major jolt to nuclear companies’ share prices.
• Beleaguered Swedish battery startup Northvolt is closing in on a $300 million lifeboat from its investors and customers.

Minerals & Mining

• GM agreed to a $625 million joint venture with Lithium Americas to build out its lithium mine in Nevada, in what both companies hope will become a key source of raw materials for US EV battery manufacturers.

COP29

• Ukraine is urging Western countries to boycott COP29 if Russian president Vladimir Putin shows up. Putin didn’t attend last year’s COP in Dubai, but was on the sidelines for other meetings in Abu Dhabi. Putin visited Azerbaijan, which is not a party to the International Criminal Court and therefore safe territory for him, in August.
• Meanwhile, The Washington Post editorial board accused COP’s UN organizers of repeatedly allowing the summit to “‘greenwash’ some of the world’s most repressive rulers and most enthusiastic extractors of fossil fuels.”

Josh Freed, senior vice president for climate and energy at Third Way. Microsoft, Google, and Amazon have all recently announced innovative new deals to source nuclear power for data centers.

• Nigeria’s lithium ambition is getting an unexpected boost.
• African crypto startup Yellow Card raises $33 million.
• Forget the median voter. This election is about the marginal voter now.