It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Friday, April 21, 2023
Last Livestock Carrier Departs New Zealand as Ban Goes into Effect
Dareen was the last livestock carrier to depart New Zealand (Mira International Shipping)
New Zealand completed its two-year phase out of livestock exports with the controversy on the practice continuing up to the departure of the last vessel. The phase-out of the business, which was reported to be valued at US$325 million in 2022, was in response to ongoing protests by animal rights activities, reports of poor conditions on the ships, and several high-profile losses of ships resulting in the death of the crew and the animals.
Agriculture Minister Damien O’Connor confirmed the departure of the last vessel, the Dareen (7,285 dwt) operated by Mira Shipping out of Dubai. Registered in Panama, the vessel is 29 years old. At 458 feet in length, the ship is reported to have a maximum capacity of 7,000 cattle. The vessel however under New Zealand’s interim restrictions put in place in 2021 was limited to 90 percent density and required to have a 20 percent feed reserve in case of delays or other problems during the voyage.
The Dareen arrived in Timaru, New Zealand, a port on the east coast of the South Island, on April 18. The export license allowed for up to 6,253 cattle, although under the restrictions each animal needed to be inspected before boarding. It was anticipated that the vessel would carry less than the license with the final count being reported at 6,090. The cattle were trucked from a farm and loaded aboard the vessel which departed Tiramu shortly before 0600 local time on April 20. The vessel is expected to reach Huanghua, China on May 9.
The official ban on live exports begins on April 30 but the ministry confirmed that no additional export licenses have been issued after the Dareen. The ministry said the two-year transition period had been set to provide farmers time to adjust their business and adapt to the limits. Minister O’Connor dismissed recent talk of restarting live export by sea saying that consumers overseas were also increasingly taking animal welfare and issues of sustainability seriously. He noted that others countries are following New Zealand’s example highlighting that Australia has also moved to phase-out live export of sheep.
“Since 2015, live exports by sea have represented only 0.32 percent of primary sector export revenue. Whilst we acknowledge the economic benefits for some farmers, we also have to protect the international reputation of our annual NZ$53 billion (US$32.5 billion) primary export industry,” said O’Connor. “This is why we initiated the review in 2019 and subsequently made the decision to cease live exports by sea by the end of April 2023.”
Animal rights activists were planning a celebration for April 30 to mark the official end of the live export trade. This week, however, the group Save Animals from Exploitation nonetheless repeated its allegations of cruelty accusing the New Zealand farmer of holding the animals in poor conditions prior to their last export shipment. They released a video showing the animals in a muddy field saying there was no feed and no grass, while the farmer denied the allegations saying the animals were well cared for and in good health before their export.
The ministry said it was aware of the video and would be investigating. They also told local media that the shipment would only be permitted to depart once inspectors confirmed that all the conditions of the export licenses were being met.
New Zealand had previously imposed a temporary moratorium and then set restrictions on the trade after the September 2020 loss of the Gulf Livestock 1 carrier. The vessel sank in a storm off Japan killing 41 crewmembers and around 6,000 head of cattle. Only two crewmembers survived the disaster which gained worldwide attention.
Privatization and Relocation of Auckland Port Rejected by Union
Auckland's mayor is pursuing plans to move the port to redevelop the waterfront (file photo)
The Port of Auckland, New Zealand is facing a new set of challenges as it recovers from four years of operational difficulties. The Maritime Union of New Zealand’s local for Auckland is speaking out against a plan proposed by the City’s mayor to move the port and explore the privatization of its operations.
Elected in October 2022, businessman Wayne Brown ran on a platform that included calling for the redevelopment of Auckland’s waterfront. Immediately after this election, he sent a letter to the chairperson of Ports of Auckland, the port’s operating company, saying that he would call on the Auckland Council to “act more decisively to turn around the port.” In pursuing his position Brown said, “There is no one who voted for me who should have been unaware of my view that car importation and container services should cease at the current site.”
Brown announced at the end of March 2023 that his office is funding a review of Ports of Auckland by a private consulting firm. The mayor briefed the city council and the management of Ports of Auckland on his initiative saying that the review would be focusing on land use plans and exploring the possible sale or “mixed ownership” of the operation. Three elements are being explored including asking if the port could carry out its existing operations on a smaller footprint, seeking interest from investors or port operators for a possible role in the future of the port activity, and how the existing waterfront land could be redeveloped for the benefit of Auckland and its residents.
The Auckland Council looks to use the information from the report as it begins to formulate an updated 10-year plan. Work on the plan is due to start later in 2023 and be finalized by mid-2024.
The Maritime Union local issued a statement rejecting the idea of privatization and saying “There is no need to mess with success.” Maritime Union Branch Secretary Russell Mayn said the confusion around the relocation of the port and now privatization is going to cause more problems for New Zealand’s supply chain security.
“We have seen a major turnaround in performance at Ports of Auckland recently, and we risk undermining this good work,” said Mayn. The union in earlier public statements had also said, “Our view is the Ports of Auckland is now on an extremely promising trajectory …. We need to let the Ports do its job.”
The union points out that the port is not a normal business and by its very nature is a monopoly. The port of Auckland is owned by the city. By world standards, the union admits that it is a small port, but critics point to reports which have consistently cited Auckland as the least efficient port in the region. The World Bank Container Port Performance index ranked Auckland the lowest of 18 ports in Oceania in 2021 while a supply chain analysis by a consulting firm recently said New Zealand companies lose NZ$1.7 billion (US$1 billion) annually to shipping delays.
Previous government studies forecast that the port’s container terminal would run out of capacity by 2055. Brown in 2019 led a government commission that proposed moving the container and car import business approximately 90 miles to the north, a two-hour driving distance from Auckland, to Marsden Point. The idea was rejected by government officials at the time in part due to the distance.
Brown, however, continues to push for the redevelopment of the existing port into a multi-use space with recreational areas as well as housing. He has called for the ro-ro port for cars to leave Auckland by the end of 2024 and container operations to be gone by 2040. He would maintain a small portion of the existing port for cruise ships, ferries, and coastal vessels.
Port officials for their part admit they are emerging from a troubled period saying that a solid turnaround is underway both operationally and financially. Ports of Auckland Chief Executive Roger Gray told The New Zealand Herald that they were rebuilding trust and respect. Among the steps, they highlight increasing the number of stevedores and crane operators after prior management reduced staff at the beginning of the pandemic. The head office staff has also been trimmed and a new partnership was formed with the union to set aside the combative approach of the past. Among the steps they took was moving stevedores to a 40-hour salary instead of hourly wages.
“When there is a pragmatic management that works with the workforce and focuses on getting the basics right, we get a successful port,” says union executive Mayn. The union also points to Ports of Auckland’s decision to abandon a controversial and unsuccessful automation program. One of the concessions the port has made is an effort to retrofit driver cabs to a fleet of automated straddle cranes bought as part of the canceled effort to automate.
Gray highlighted to the newspaper that the port has been able to increase its throughput and improve efficiency. He points to an effort converting to stacking boxes four levels high instead of three which is increasing capacity. He said that the Ro-Ro port has also improved efficiency, handing back land to the city over the past 25 years. He asserts that the port has enough space to maintain operations at least until 2035.
The union dismisses the latest calls saying that the history of privatization has had a negative effect on New Zealand’s infrastructure. The efforts to reshape the port they contend are not good for Auckland.
ILWU Reports Tentative Agreement on Some Contract Negotiation Issues
ILWU reports tentative agreement on certain issues as concerns remain high over the contract negotiations (Long Beach file photo)
The International Longshore and Warehouse Union (ILWU) announced today that it has reached a tentative agreement with the Pacific Maritime Association (PMA) on what it terms “certain key issues” in the long-running contract negotiations covering the 29 U.S. West Coast ports. The announcement from the union headquarters came following a month of contentious relations between the PMA and the union’s local for the ports of Los Angeles and Long Beach and growing calls from the port community and shippers for a resolution of the longshore workers’ contract.
The negotiations began in May 2022 for the contract which expired on July 1 and covers approximately 22,000 employees. Both sides said they would refrain from commenting during the negotiations but twice before issued updates. The union and the employer said in July 2022 that they had reached a tentative agreement on terms for the maintenance of health benefits and followed that seven months later saying that they were making progress and “remain hopeful of reaching a deal soon.”
In its statement, the ILWU said today that “the talks are continuing on an ongoing basis until an agreement is reached.” They reiterated that the PMA and ILWU have agreed not to discuss the terms of the tentative agreements as negotiations continue.
In recent weeks trade associations ranging from the agricultural sector to retailers have all reiterated the concerns saying that the uncertainty was bad for their operations and the U.S. economy. Speaking earlier in the month, Gene Seroka, Executive Director of the Port of Los Angeles said “all eyes” are on the contract negotiations and the time has come to get a settlement.
The West Coast ports continue to say the contract talks are a key contributor to their decline in volumes. Yesterday, the Port of Long Beach reported that its overall volume was down 30 percent in March citing continue high retail inventory levels and as “shippers shuffle routes from the West Coast to seaports on the East and Gulf coasts.”
Statements in recent weeks from both the PMA and Local 13 of the ILWU which covers the ports of Los Angeles and Long Beach have further contributed to the concerns. Tensions began to rise in mid-March when the union members stopped staggering their meal breaks during their shifts at the Southern California ports. The PMA said it was a provision in the old contract and that by failing to abide by it the longshore workers were “creating significant delays.” Because a new contract was not in place, the PMA said there was no option to arbitrate the matter and require the union to man the terminals continuously without interruption.
Union members failed to report for their assigned shift on the evening of April 6 and again for the morning shift on April 7 with the local saying it was due to a monthly union meeting followed by the Good Friday religious holiday. While workers return to the assigned shifts, the PMA since then has said the local is using new tactics the employer association called illegal to continue to disrupt activities at the ports of Los Angeles and Long Beach.
“As has been pointed out for years, any actions that undermine confidence in West Coast ports threaten to further accelerate the diversion of discretionary cargo to Atlantic and Gulf Coast ports,” wrote the PMA in its latest statement. They accused the local of placing quality jobs at risk far beyond the docks.
ILWU Local 13 responded yesterday saying that its members operate, maintain, and repair cargo handling equipment at the marine terminals within the Ports of Los Angeles and Long Beach and part of their responsibility is to inspect the equipment. They are contending that some of the terminals overlooked equipment maintenance during the surge in container volumes over the past two years.
Local 13 said that it is using the current lull in cargo volumes to conduct these mandatory equipment inspections. Citing the dangers of potentially poorly maintained equipment, they said union members expect to complete these inspections in a systematic and expeditious manner. Reports from the ports have said equipment is being red flagged as dangerous during these inspections resulting in equipment shortages and further delays in cargo handling.
PMA Says Local 13 Continues to Disrupt Ports Despite Progress in Talks
PMA continues to accuse union members of disrupting and delaying operations at Los Angeles and Long Beach (file photo)
The Pacific Maritime Association is continuing to say that members of the International Longshore and Warehouse Union (ILWU) local are disrupting operations at some of the terminals in the ports of Los Angeles and Long Beach. The association representing employers at the ports repeated its assertions of actions by the local only hours after the union’s headquarters issued a statement announcing a tentative agreement on “certain key issues” in the 11-month old contract negotiations.
The Wall Street Journal is quoting sources familiar with the negotiations saying that the agreement came “regarding automated machinery at cargo terminals.” According to their reporting, the tentative agreement pertains to the use of automation at the ports, which was considered to be one of the main points of contention in the negotiations. Last year, both the PMA and the union issued studies on the impact of automation at the California ports with reports saying the union was not only looking to block further automation but also roll back prior concessions on automation. Only three of the terminals have reportedly deployed automation but it is believed that the operators will be seeking to expand its use.
Observers are noting that yesterday’s statement unlike previous ones was not a joint release from the ILWU and the PMA. The employers’ association issued a brief comment later in the day saying “While significant progress has been achieved in coastwise contract negotiations, several key issues remain unresolved.”
For the past month, the PMA has been saying that Local 13 which covers the ports of Los Angeles and Long Beach has been using new tactics to disrupt operations. In previous statements, the PMA said that Local 13 was using illegal tactics ranging from failing to stagger meal breaks, to not reporting for two shifts on April 6 and 7, and “red flagging” equipment at the terminals.
Yesterday, the PMA repeated its positions saying, “Work actions led by ILWU Local 13 at the Ports of Los Angeles and Long Beach continued to disrupt some operations at key marine terminals today. The Union is deliberately conducting inspections that are not routine, unscheduled, and done in a way that disrupt terminal operations.”
Local 13 previously responded to the earlier accusations confirming that it was using the current lull in volumes at the ports to conduct inspections that had been deferred over the past two years while the ports were operating at peak levels. “Monthly, quarterly, semi-annual, and annual inspection requirements ensure that cargo handling equipment is in good working condition.” They cited safety concerns noting that accidents could lead to damage to cargo and equipment as well as serious or fatal injuries. “Terminal operators that have a clear shortage of mechanical personnel on staff, naturally have the longest list of shortcomings to address,” the Local’s statement said.
“We hope to complete these inspections in a systematic and expeditious manner for the benefit of all supply chain partners,” Local 13 said. “Meanwhile, our members are continuing to move cargo with skill and efficiency.”
Contract negotiations began on May 10, 2022. While the expectation was that it would be a lengthy process, calls have been growing for an agreement. The uncertainty and fears of further escalation that could impact the operations continue to be cited by shippers and carriers as ships and cargo are diverted from the West Coast ports.
Researchers Launch Third Search for the WWII Shipwreck SS Norlindo
SS Volusia, later renamed SS Norlindo (Bowling Green State University archives)
A team of researchers in the U.S are undertaking a third search for the wreck of a World War II freighter which is laden with heavy fuel oil and could pose ecological risk in the event of a leak.
Two previous searches were unable to locate the wreck of SS Norlindo, an American steamship that was sunk by a German U-boat in 1942 in the Gulf of Mexico. While previous expeditions resulted in the identification of several magnetic anomalies that could indicate a shipwreck, both were ended early due to foul weather, leaving nearly half of the search area unexplored.
Researchers launch an AUV during a previous search for the Norlindo (NOAA)
SS Norlindo, a 2,686-tonne, 253-foot-long American steam freighter, was the first World War II combat casualty in the Gulf of Mexico. It was torpedoed and sunk by German U-boat on May 4, 1942, about 80 miles northwest of Dry Tortugas Island.
The freighter sank so quickly that it was impossible for the seven officers and 21 crewmen on board to launch the lifeboats. Five men went down with the ship, and the survivors were picked up two days later.
The German U-boat continued its hunt in the Gulf of Mexico and, over the next two days, sank two more freighters, Munger T. Ball and Joseph M. Cudahay. These shipwrecks have since been discovered by recreational scuba divers in shallower waters off the Florida coast. Norlindo remains undiscovered, 75 years after the end of World War II.
NOAA’s Office of Ocean Exploration believes that Norlindo is one of 87 shipwrecks in U.S. waters that pose a potential pollution threat from fuel onboard at the time of sinking. The freighter is believed to have sunk with about 5,000 barrels of fuel on board.
A team of scientists from the University of Southern Mississippi has embarked on a third search mission, hoping to locate the wreck and determine its current condition - and help avert environmental damage. The scientists are using the university’s research vessel, Point Sur, and will deploy a deep-towed sidescan sonar to scan the bottom in the areas that look most promising. If high-potential targets are located, the team will return with an ROV and inspect for visual confirmation and evaluation.
The wreck is particularly important to find because of its proximity to environmentally sensitive areas. An oil leak could affect seabirds near the Dry Tortugas, which are home to bird species that cannot be found elsewhere in the U.S. The area also provides spawning and nursery habitat for nurse sharks.
WWII Japanese Transport Lost With 1,080 People Located in Philippines
Montevideo Maru was being used as a transport when it was sunk in July 1942 claiming over 1,000 lives (Australian War Museum photo courtesy of Silentworld)
An expedition team led by an Australian maritime archaeology foundation is reporting that they have located the wreck of Australia’s worst maritime disaster, a ship that was being used by the Japanese as a transport during World War II when it was sunk by an American submarine. The former passenger liner Montevideo Maru sunk 80 years ago claiming the lives of over 1,000 people from 14 nations.
In late June 1942, after the fall of Rabaul on Papua New Guinea, the Japanese used a commandeered former passenger ship as a transport. The 7,200 gross ton ship entered service in 1926 sailing between Japan and South America for Japan’s Osaka Shosen Kaisha (OSK) Line. She was 430 feet long with a top speed of just 15 knots.
She had been used on several military and civilian transport missions before she loaded prisoners in Papua New Guinea. The ship sailed without escort bound for China when she was spotted by an American submarine off the Philippines. Unaware the ship was carrying Allied prisoners of war and civilians, the American submarine Sturgeon fired four torpedoes that struck the Montevideo Maru causing it to sink in under 15 minutes on July 1, 1942.
Most of the people were caught below deck with reports saying less than 20 of the Japanese crew and soldiers survived the sinking. Some reports say any of the prisoners that survived the sinking were left to die in the water.
The memorial society formed to preserve the memory of the ship estimates that approximately 1,060 prisoners, both military and civilian, were lost. They report the people were citizens of 14 countries, including Australia, Denmark, England, Estonia, Finland, Holland, Japan, Ireland, New Zealand, Norway, Scotland, Solomon Islands, Sweden, and the United States. Of the dead, it is estimated that 979 were Australians.
The wreck was discovered on a mission put together by Australia’s Silentworld Foundation, which is dedicated to maritime archaeology and history, and Dutch deep-sea survey specialists Fugro, along with support from Australia’s Department of Defense.
The search commenced on April 6 in the South China Sea, 110 km northwest of Luzon. After just 12 days on April 18, the team reports that a positive sighting was recorded using state-of-the-art technology, including an Autonomous Underwater Vehicle (AUV) with in-built sonar.
Expert analysis by the project team, comprising maritime archaeologists, conservators, operations and research specialists, and ex-naval officers, confirmed the identity of the wreck.
Identifying features of the wreck (Silentworld)
“The discovery of the Montevideo Maru closes a terrible chapter in international military and maritime history,” said John Mullen, the director of Silentworld as well as an Australian businessman, maritime history philanthropist, and explorer. He said Silentworld had been planning the expedition for nearly five years along with the dedicated efforts of the Montevideo Maru Society, which has been working for over 20 years to preserve the history.
The team reports the wreck lies at a depth of over 4,000 meters, which is deeper than the Titanic. The site will be recorded for research purposes, but out of respect for all the families of those onboard who were lost, Mullen said no artifacts or human remains will be removed.
Bow points (Silentworld)
Stern points (Silentworld)
Chile to nationalize its lithium industry
Cecilia Jamasmie | April 21, 2023 | Evaporation ponds in Atacama’s Salt Flat, Chile.
Chile’s President Gabriel Boric announced on Thursday night his government would nationalize the country’s lithium industry, applying a model in which the state will partner with companies to enable local development.
The long-awaited policy in the world’s second-largest producer of the battery metal includes the creation of a national lithium company, Boric said on national television.
State copper giant Codelco, the world’s No.1 producer of the metal, will be initially in charge of signing up partners for new contracts.
That role will then be undertaken by a dedicated national lithium company, with a mandate will to develop the industry into a pillar for Chile’s economy while protecting its environment.
“This is an opportunity for economic growth that will be difficult to beat in the short term (…) We can’t afford to waste it,” Boric said.
The two lithium miners already operating in Chile, Albemarle (NYSE: ALB) and SQM (NYSE: SQM) will continue to do so until their contracts expire. Without naming them, Boric said he hoped that lithium miners already present in Chile would be open to negotiate state participation before the end of their contracts.
The contract for the world’s no.1 producer, Albemarle, runs out in 2043, while the contract for the second largest, SQM, ends in 2030.
The President noted that future lithium licences will be only issued as public-private partnerships with state control, but no details about state shareholding or other ownership arrangements were disclosed.
President Gabriel Boric unveiled Chile’s lithium policy
Codelco and state miner Enami will be given exploration and extraction contracts in areas where there are now private projects before the national lithium company is formed. There will be a unit in charge of advancing technology to minimize environmental impacts, including favouring direct lithium extraction (DLE) over evaporation ponds — the method currently used.
Applying DLE is expected to speed up production and avoid vaporizing billions of litres of water. The technique, however, is relatively untested at major scale, which could initially mean less output and profit.
Canada’s Summit Nanotech Corporation, which is developing a DLE technology, welcomed the news and announced on Friday the opening of a facility to test its method in Santiago.
Supply squeeze
Chile’s move adds further pressure to electric vehicles makers, who are scrambling to secure supply of the battery metal.
It follows Mexico’s decision to nationalize its own lithium industry last year. The country is now seeking to create a regional lithium association with Argentina, Bolivia and Chile. The three countries make up the so-called “Lithium Triangle”, which has about 65% of the world’s known resources of the metal and reached 29.5% of world production in 2020.
Argentina, Chile, Bolivia and Brazil, in turn, are exploring the creation of a lithium cartel of sorts in charge of expanding South America’s processing capacity, turning more of their mined lithium into batteries and tapping into the electric vehicle manufacturing sector.
Jordan Roberts, battery raw materials analyst at Fastmarkets NewGen said the immediate impact of Boric’s announcement seemed to be “muted” as market participants digest the news and await Codelco’s plan, which will be released in the second half of the year.
“We do not expect any material impact to established producers … [but]… there may be some hesitation investing in Chile’s lithium space until further details have been released and companies are confident on stability and in how the public-private partnerships will operate,” Roberts said in an emailed statement.
Chile currently generates about 30% of the world’s supply, but it plans to double production by 2025 to about 250,000 tonnes of lithium carbonate equivalent (LCE).
Graphic source: Reuters.
Global demand for lithium, according to the government’s projections, will quadruple by 2030, reaching 1.8 million tonnes. Available supply by then is expected to sit at 1.5 million tonnes.
The country’s Atacama region, which is also home to vast copper mines, supplies nearly one-quarter of the globe’s lithium.
Last year, the state received more than $5 billion from the sector, equivalent to 1.6% of its GDP, figures from the Autonomous Fiscal Council show.
Exports of lithium carbonate reached almost $7.8 billion, an increase of 777% over 2021, according to the Chilean Central Bank.
It means that lithium carbonate surpassed salmon and fruit in the Chilean export basket.
Suncor’s Fort Hills expansion to be reconsidered by regulator
The Alberta Wilderness Association had asked the regulator to revoke the permission after finding deficiencies in Suncor’s plan that pose “a serious risk” to the wetlands
Bloomberg News | April 17, 2023 | The Fort Hills oilsands mine, in northern Alberta, Canada.
The Alberta Energy Regulator is reconsidering approval of a plan allowing Suncor Energy Inc. to extend its Fort Hills oil-sands mine into nearby wetlands after pressure from an environmental group.
The AER in September approved Suncor’s plan for protecting certain portions of the McClelland Lake Wetlands Complex, a necessary step for allowing mining to expand in the area. The agency said in an email that it’s now reconsidering that approval.
The Alberta Wilderness Association had asked the regulator to revoke the permission after finding deficiencies in Suncor’s plan that pose “a serious risk” to the wetlands.
Suncor hasn’t been told whether authorization would be reconsidered, Leithan Slade, Suncor spokesman, said by email. The plan for the wetlands was “the result of years of work informed by a Sustainability Committee struck in 2005, including representatives of local Indigenous communities.”
Located in northern Alberta, Fort Hills is Canada’s newest oil-sands mine. The site began operation about five years ago and produced about 164,000 barrels a day last year, AER data show.
The Alberta Energy Regulator is facing increased federal oversight and a third-party review of its response to a tailings-pond leak at Imperial Oil Ltd.’s Kearl oil-sands mine that was criticized by local indigenous communities.
(By Robert Tuttle)
ALL CAPITALI$M IS STATE CAPITALI$M
Ontario and Ottawa spending billions to bring Volkswagen battery plant to Canada
Ontario and the federal government are putting $1.2 billion into a new Volkswagen facility in St. Thomas, Ont, while the federal Liberals are also promising the German automaker up to $13 billion in subsidies to build batteries for electric vehicles.
News that Volkswagen had picked St. Thomas, Ont. for its next facility was announced in March, but at an event Friday in the southwestern Ontario community, Premier Doug Ford and Prime Minister Justin Trudeau will announce they’re bringing the plant to Canada with massive subsidies.
Ontario will contribute $500 million for the plant’s construction and the federal government will add another $700 million. The massive facility will be run by PowerCo. The company’s battery subsidiary is expected to employ 3,000 people directly and thousands more in spin-off industries.
Bloomberg was first to report that the federal government is also giving the company ongoing operating subsidies that could add up to more than $13 billion if the firm meets targets for producing batteries. Volkswagen is the world’s largest automaker and recorded a profit in 2022 of over $33 billion.
Ontario economic development minister Vic Fedeli, said the money the two governments are putting on the table is well worth it and will be paid back within five years. He said the plant will lead to spin-off companies to provide materials that are massive in their own right.
“There are companies that are needed. These will be billion-dollar companies needed to make cathode, anode separator, copper foil and lithium hydroxide,” he said.
He said the entire industry will benefit from the new plant, which will be the largest manufacturing facility in the country.
“It’s not about one or two companies. It’s about the 100,000 men and women whose jobs were at risk. And it’s about the 700 parts makers, 500 tool and die and mold maker companies, 300 connected and autonomous vehicle companies.”
Fedeli said in addition to the financial investment, Ontario offers close access to critical minerals, an educated workforce and carbon-free electricity.
“We can certify that it’s clean energy, zero-emission energy going into their plants, so they’re 100% emissions free. That’s a really important piece,” he said.
The two governments provided taxpayer money to another battery plant last year. The Stelantis – LG battery plant in Windsor is a $5 billion facility. Citing ongoing negotiations with firms like Volkswagen, they have not released the money involved in that deal, but Ferdeli said it was similar to the Volkswagen deal.
Federal Industry Minister François-Philippe Champagne defended the $13-billion federal subsidy and said it would pay off.
“Talk to any banker. He would say if you get your money in five years for a plant that’s going to be there for 100 years, that’s a pretty good deal for Canadians,” he said.
The Volkswagen plant is the company’s first outside of Europe and one of only a handful of the company’s proposed battery plants.
The ongoing subsidies are designed as a match to U.S. President Joe Biden’s administration’s inflation reduction act, which is offering massive subsidies for green manufacturing. The $13 billion will be paid overtime if the company hits certain milestones, and if a future U.S. administration removes the subsidies, Canada will stop paying them to Volkswagen.
Champagne said Canada’s bid was about much more than money.
“We won because of the talent of our people. We won because we have the critical minerals. We won because we have renewable energy.”
Canada offering more than C$13 billion for VW battery plant - govt source
Story by Reuters • Yesterday
OTTAWA (Reuters) -Canada has agreed to provide up to C$13 billion ($9.7 billion) in subsidies and a C$700 million grant to lure Volkswagen AG into building its North American battery plant in the country, a government source said on Thursday.
Trucks at the IAA Transportation fair in Hanover
The total Canadian investment, which could also include funds from the Ontario government, will largely match what Volkswagen would have got from the United States through the Inflation Reduction Act (IRA), the source said.
The carmaker declined to comment on the subsidies, which the source said would be disbursed over a decade. The plant will cost about C$7 billion to build, the source told Reuters, confirming an earlier report by Bloomberg News.
The deal showcases how the U.S. green package, which offers $369 billion of subsidies for electric vehicles and other clean technologies, is putting pressure on other governments to ramp up financial incentives to lure investments.
The new Volkswagen battery plant in Canada will have a maximum capacity of 90 gigawatt hours, enough to provide batteries for more than a million cars annually, Handelsblatt reported, citing a company source familiar with the matter.
Volkswagen declined to comment on the Handeslblatt report. It is expected to announce further details of the project on Friday in a meeting between the management of its battery unit PowerCo and Canadian Prime Minister Justin Trudeau in Ontario, where the plant will be located.
Europe's biggest carmaker wants PowerCo to become a global battery supplier, and to meet half its own demand with plants mostly in Europe and North America, the carmaker's board member in charge of technology told Reuters in an interview in March.
PowerCo, set up last year, is targeting more than 20 billion euros ($21.94 billion) in annual sales by 2030. Production in Ontario is scheduled to start in 2027.
(Reporting by Steve Scherer, Riham Alkousaa and Victoria Waldersee; Editing by Franklin Paul and Jan Harvey)
Federal government giving Volkswagen up to $13B in subsidies to secure St. Thomas EV battery plant
Story by CBC/Radio-Canada • Yesterday
The federal government has agreed to give Volkswagen up to $13 billion in subsidies over the next decade as part of a deal to ensure the automaker builds its electric-vehicle battery plant in southern Ontario.
"This is game-changer for our nation," said Innovation Minister François-Philippe Champagne while fielding questions from reporters Thursday.
The federal government will provide annual production subsidies to the German automaker and kick in funds for the massive factory in St. Thomas, which is estimated to be the size of 391 football fields, making it the largest factory in Canada.
Bloomberg News first reported the subsidy amount. Sources with knowledge of the deal have confirmed the details of the contract with CBC News.
According to details of the deal, federal production support for the plant is expected to range from $8 billion to $13 billion over 10 years.
Ottawa is also offering about $700 million in capital expense grants to Volkswagen through its Strategic Innovation Fund.
Champagne said those subsidies will come into effect after the company builds the $7 billion plant and begins production.
Sources say that, according to the terms of the contract between Ottawa and Volkswagen, Canada's production subsidies will stay in place only as long as the U.S. Inflation Reduction Act remains in force. That U.S. law offers billions of dollars in clean energy and net-zero subsidies south of the border.
If the U.S. reduces its incentives, Canada's subsidies will also go down.
The government has been open about its desire to be a player in electric vehicles, widely seen as the future of the auto industry.
Champagne defended the cost, arguing the job creation and supply chain spinoffs from bringing one of the world's largest automakers to Canada will be worth more than the cost of the subsidies to the government.
"When you see a transformation in history like that, you have to seize the moment. You lose that, what's going to happen to the auto sector? What's the cost of inaction?" he said.
Speaking to reporters Thursday, Champagne argued Canada will see the economic impact of the plant in its first five years.
"Talk to any banker. He would say if you get your money in five years for a plant that's going to be there for 100 years, that's a pretty good deal for Canadians," he said.
Volkswagen announced last month that it had chosen St. Thomas, Ont., about two hours northwest of Detroit, as the site for its first North American "gigafactory."
At the time, it was not known how much the federal and provincial governments had put on the table to secure the plant.
The Ontario government is also expected to subsidize the project but those details are not yet public.
The Official Opposition is expected to attack the Liberals over the deal.
When news of the factory was announced last month, Conservative Leader Pierre Poilievre tweeted "this money belongs to Canadians. Not to a foreign corporation. Not to Justin Trudeau. How much of Canadians' money is he giving to this foreign corporation?"
Automotive Parts Manufacturers' Association president Flavio Volpe said he knows not everyone will be comfortable with the price tag.
"We think it's incredibly worth it, but it is a very material number," he said.
"These are good jobs that pay for mortgages and feed kids and build communities. They're not, you know, short-term jobs that people slip in and out of. You can build a career on them."
More details of the deal are expected to be made public Friday.
The plant will be run by a Volkswagen subsidy called PowerCo.
Ocasio-Cortez, Markey reintroduce Green New Deal resolution: ‘we need bold big climate action’
Story by Zack Budryk • Yesterday
Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.) announced the reintroduction of their signature Green New Deal resolution Thursday, along with a “Green New Deal for Health” co-sponsored by Markey and Rep. Ro Khanna (D-Calif.).
Speaking on Capitol Hill on Thursday, Ocasio-Cortez said the successful passage of the Inflation Reduction Act in 2022 proved ambitious action on climate was possible. The bill would almost certainly never reach the House floor under the current Republican majority, but speakers repeatedly invoked the possibility of a restored Democratic trifecta in the 2024 elections.
“First, we were called unrealistic. Then, when it was when it came time for the Bipartisan Infrastructure Law and Inflation Reduction Act, we started to fight,” Ocasio-Cortez said. “We said we are not going to take crumbs, and we’re not going to settle for that — we need bold big climate action, and we need it now.”
“And that fight resulted in the largest piece of climate legislation in American history,” she added.
Markey and Khanna timed the reintroduction for the fourth anniversary of their original Green New Deal resolution in 2019, shortly after Ocasio-Cortez was sworn into Congress. The resolution proposed a broad swath of environmental and economic reforms, including expansion of high-speed rail, implementation of a “social cost of carbon” rule and creation of a state jobs program modeled after the Depression-era initiatives that are its namesake.
Khanna and Markey’s health care legislation, meanwhile, would revive the Hill-Burton program, a New Deal-era initiative that provided hospital construction grants, to provide $100 billion to hospitals for climate resilience. It would also require the Department of Health and Human Services to create a task force that would make policy on emission and climate risk disclosures for FDA-approved drugs and devices.
Ocasio-Cortez, Khanna and Markey were joined by Reps. Greg Casar (D-Texas) and Maxwell Frost (D-Fla.), neither of whom were in Congress in 2019 but have signed onto the reintroduced resolution.
Frost, the youngest current member of Congress, outlined recent extreme weather events that have devastated parts of Florida to make the case for ambitious legislation.
“Usually in this building, when we talk about cost, we talk about dollars and cents,” Frost said. “But the real cost is human life, people, communities, and so we’re here today to be their voice and work with them to build a livable future and to build a world that’s more than a livable future, it’s about a thriving, livable planet.”
Doug Ford opens door to storing CO2 underground to help hit climate change targets
Story by Mike Crawley •
Premier Doug Ford's government is opening the door to allowing underground carbon capture in Ontario, a way of fighting climate change by trapping and storing greenhouse gas emissions.
The government brought in legislation to repeal Ontario's previous ban on injecting carbon dioxide underground, and is now proposing rules for carbon capture pilot projects.
The process involves capturing industrial emissions of CO2, compressing them into liquid, then putting them deep into the earth, in effect cancelling their release into the atmosphere.
Ontario's Minister of Natural Resources, Graydon Smith, calls carbon capture a big opportunity for the province.
"You look at other jurisdictions, not only in Canada but in the United States and really around the world, and carbon capture is seen as emerging effective technology that can really make a difference," Smith said in an interview.
Graydon Smith, left, is Ontario's Minister of Natural Resources and Forestry.
While carbon capture has been touted particularly by the oil and gas sector as a way to neutralize emissions, the price tag can be hefty. Federal and provincial taxpayers have covered a significant chunk of the cost of projects in Canada so far.
Industry groups hoping Ontario will move faster
A range of companies and business lobby groups encouraged the Ford government to lay the groundwork for starting carbon capture in this province.
"This is one of those tools we need to use from our toolbox to help us get to net zero," said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.
"I'm hopeful that Ontario will get there, but they've been slow," Darby said in an interview. "They've taken the right first step, but it's a bit of a baby step. Let's see if they go further."
"Industry always wants to to move very quickly and I understand that," countered Smith. "I think they're very excited by the prospects of this technology as are we. But it's also important to get it right." Canada's leaders on carbon capture are Alberta and Saskatchewan. According to federal figures, Alberta captured more than three megatonnes of CO2 in 2021. (For a sense of scale, Alberta's emissions that year totalled 256 megatonnes.)
Ontario's biggest-emitting candidates for using carbon capture include steel mills, cement makers, gas-fired power plants and refineries.
Jim Redford, vice-president of energy services for Enbridge Gas, says his company's industrial customers are keenly interested in the opportunity.
"Carbon capture is a great way for those businesses to continue to use natural gas, but also to significantly reduce their emissions," said Redford in an interview.
"When you look at the energy future, no one type of energy is going to power Ontario," he said, calling carbon capture "a great way for natural gas to continue to be used, with lower [net] emissions." Where to store captured CO2 will be key question
One of the issues facing Ontario will be where to store the captured CO2. The two likeliest candidates: disused oil and gas wells that dot southwestern Ontario and saline aquifers (where porous sedimentary rock is filled with saltwater), stretching from Windsor to Port Dover.
The liquefied CO2 would almost certainly be shipped from the emission sources to the underground storage by pipeline.
Enbridge "would have the ability to transport carbon dioxide," Redford said. "We are familiar with the geology of Ontario and the storage of underground gases. So transportation and storage [of CO2] is really a natural extension of the business we have today."
Keith Brooks, programs director with advocacy group Environmental Defence, says carbon capture may be useful for offsetting emissions by the cement or steel industries. But he opposes its use to offset emissions from the use of fossil fuels.
"We don't think that carbon capture is a good solution for the fossil fuel industry," Brooks said in an interview. "It doesn't actually move that industry into the net zero economy that we're trying to build, and instead it acts as a lifeline."
Brooks says allowing carbon capture from such industries amounts to prolonging dependence on fossil fuels while "deluding ourselves that we're actually taking action on climate change." Gas-fired electricity production to ramp up
He's particularly concerned that carbon capture will be used to justify Ontario using fossil fuels to generate electricity.
Gas-fired power plants make up six of Ontario's 25 biggest emitters of carbon dioxide, accounting for 4.5 megatonnes of CO2 annually. The province is preparing to solicit bids to build even more gas-fired generation capacity to meet expected growth in demand for electricity over the coming decade. There's also the question of who will pay for carbon capture.
"If companies want to invest in that as a technology, or as a solution to deal with their emissions, that's up to a company to decide, but it's not something that taxpayers should be footing the bill for," said Brooks. The province of Alberta paid more than half the cost of Shell Canada's $1.3-billion Quest carbon capture project northeast of Edmonton, and the federal government kicked in nearly 10 per cent.
SaskPower, the Crown corporation that produces electricity in Saskatchewan, spent $1.5 billion on a project to capture carbon at a coal-fired generating station, and the facility has struggled to hit its targets.
"At this point, the Ontario government is not backing (carbon capture) projects or funding these projects," Smith said. "We're just creating a framework for them to take place."
As for a timeline, while pilot projects could start as early as this year, it's hard to see carbon capture going at a commercial scale in the province much before the end of the decade.
