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Climate Bill - A Decade of Support for the Transition
Many have been skeptical about industry's ability to meet the government's hastily imposed regulations for the energy transition. Around the world, billions of dollars in tax credits & funding are being doled out to assist in meeting the requirements for a carbon-free world. The Barrons article linked below shows why a rapid transition might actually be possible, but it will require a significant increase in the production of minerals & metals.
- Europe: grants/incentives >$200 billion, REPowerEU plan aims to double the region’s solar capacity in just the next three years, with capacity to power more than 100 million homes. Wind and clean hydrogen will get enormous subsidies, too.
- US climate bill in the U.S. $370 billion for clean-energy incentives and consumer benefits. Wood Mackenzie projects that the incentives will trigger some $1.2 trillion in private investments by 2035.
- The bill boosts tax credits for battery storage, EVs, heat pumps.
- Tax benefits for CCS/CCUS $CVX $XOM are both working on carbon-capture projects & $OXY is a large player.
- The magnitude of demand for hydrogen electrolyzers would get fairly immense quite quickly. We don’t have many companies that have that technology, and even fewer that have the technology at low cost.
- Solar power will be the workhorse of the energy transition, powering the electric grid as well as fuelling hydrogen production and filling battery storage. #silver #vanadium
The commodity super-cycle has only just begun.
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