Biden plan on climate and health | A potential windfall for businesses here?

Quebec players in the battery sector, as well as in the critical minerals and renewable energy sectors, have good reason to care about American politics: they are in a good position to benefit from the billions in the largest plan ever passed in the United States fight against climate change.

Posted at 5:00 am

Julian Arsenal

Julian Arsenal
The press

Among the many measures financed by the $370 billion envelope to protect the environment, two tax credits totaling $7,500 for the purchase of an electric car on this side – here from the border – are likely to have a lasting effect.

The reason ? For a vehicle to be eligible for the incentives, its battery must meet two requirements for minimum levels of critical minerals (40%) and components (50%). The goal is to reduce dependence on China for critical minerals, such as lithium and graphite, that go into manufacturing lithium-ion batteries.

“We don’t build cars in Quebec, but we are in the supply chain,” said Martine Hébert, Quebec’s General Delegate in New York, via videoconference The press. “It signals to buyers and investors that we are a reliable partner. »


PHOTO DAVID BOILY, LA PRESSE ARCHIVE

Martine Hébert, Delegate General of Quebec in New York

questions and optimism

President Joe Biden officially signed the so-called law into law in Washington on Tuesday Anti-Inflation Act (IRA). The devil is always in the detail, emphasizes Mme Hébert, because we don’t yet know exactly how the money will be distributed. Moreover, protectionist pressures are never far south of the border. However, the Delegate General of Quebec in New York sees the first signals as encouraging.


PHOTO MANDEL NGAN, AGENCE FRANCE PRESSE

On August 16, US President Joe Biden signed itAnti-Inflation Act

At Nouveau Monde Graphite, which wants to convert the graphite from its future Saint-Michel-des-Saints mine into a product used by anode makers — a component of the battery — the Democrats’ plan is timely.

“We are in the process of negotiating financing for our project with potential American customers,” said the company’s President and CEO, Eric Desaulniers. The $7,500 per vehicle discount must be earned with local content. For us this is a good discount. Currently, 100% of the graphite used in lithium-ion batteries comes from China. »

Washington’s local content requirement will limit the number of vehicles allowed, which has been criticized by automaker officials in the United States, but it will boost battery component projects as well as the critical minerals niche.

Some highlights ofAnti-Inflation Act

  • $30 billion in tax credits to speed up processing of critical minerals and production of wind turbines and solar panels
  • $10 billion in tax credits to build electric vehicle, wind turbine and solar panel factories
  • $27 billion for clean energy technologies

“I have meetings with international investors and I can tell you that I added a slide to our company presentation about this discount [le crédit d’impôt de 7500 $ US] for electric vehicles,” says Mr. Desaulniers.


PHOTO OLIVIER PONTBRIAND, LA PRESSE ARCHIVE

L’Anti-Inflation Act, signed by the President of the United States, could be beneficial for Quebec businesses. In the photo, the North American lithium mine in La Corne.

Quebec and Canada have separately developed strategies targeting critical minerals. A report by a Canada-US task force published on the White House website last June concluded that cooperation between the countries was inevitable to reduce dependence on China.

“Canada and the United States must accelerate their joint efforts through a joint plan of action,” the 13-page document said.

No one at the Quebec Mining Association could be reached Thursday to comment on Washington’s plan.


PHOTO ALAIN ROBERGE, LA PRESS ARCHIVE

Boralex CEO Patrick Decostre believes the IRAs are “great news” for Quebec’s renewable energy generation sector.

Be continued

The green technology niche also has reason for optimism. Tens of billions of dollars are allocated for the construction of wind turbines and solar panels. Mme Hébert sees opportunities there for companies like Boralex and Innergex, which have a presence in the US.

But seeing potential breakthroughs in electric vehicles, Richard Ouellet, a specialist in international business law and a professor at Laval University, advises caution on energy issues.

When it comes to energy supply, the question of public procurement comes into play, which can complicate things, the expert emphasizes.

“Sometimes we see an opportunity, but we have to be a little more careful,” says Mr. Ouellet. When it comes to public procurement, the Biden administration has made several tightening measures. Sometimes a law promises big profits, but in practice you have to be a little more careful. »

At Boralex, President and Chief Executive Officer Patrick Decostre believes the IRA is “great news” for the renewable energy generation sector that will strengthen the Quebec company’s presence in the American market.

In a statement, he said the company aims to increase its output from 290 megawatts (MW) to 5,400 MW by 2030, a goal that the IRA should make easier to achieve.

Learn more

  • $434 billion
    It’s the overall shell of theAnti-Inflation Actwhich also provides $64 billion for the healthcare sector.

    Source: White House Office

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