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North American Graphite Alliance (“NAGA”)

Northern Graphite is a member of the North American Graphite Alliance (NAGA) which represents American and Canadian producers of battery-grade natural and synthetic graphite, both of which are used to create anode material for lithium-ion batteries. NAGA encourages the U.S. Federal government to craft and implement policies, programs, and funding opportunities that support growing the domestic graphite industry.  Learn more here.

NAGA Press Releases

 

American Graphite Producers File Trade Case with U.S. Government Over China’s Manipulation of Global Graphite Market

December 18, 2024

Washington, D.C. – Today, the American Active Anode Material Producers (AAAMP), a coalition of American graphite producers, submitted a petition to the Department of Commerce (Commerce) and International Trade Commission (ITC) to initiate a trade investigation and impose tariffs as high as 920% on imports of natural and synthetic graphite from China used to make lithium-ion battery anode material.

“AAAMP is filing this case to help protect the North American graphite industry, which is at risk of being smothered by China’s malicious trade practices. There is overwhelming evidence that China dumps artificially cheap graphite into global markets, which is made possible by state-sponsored policies and massive subsidies,” said AAAMP spokesperson Erik Olson. “Without trade relief from the U.S. government, the domestic graphite industry is in peril. China’s anticompetitive actions make it challenging for graphite producers to find secure financial footing, which prevents them from becoming established players in the global market.”

While most graphite from China is currently subject to 25% tariffs, that duty is far too low. Experts at Buchanan Ingersoll & Rooney PC, the law firm handling the case, estimate dumping margins as high as 920%, allowing China to absorb the additional 25% cost easily. Fueled by state-sponsored industrial policies, low or no wage protections, and lack of environmental stewardship, recent data shows China’s overcapacity in the battery industry has quadrupled demand. The glut of Chinese battery materials has roiled markets and significantly impacted prices. China’s ability to overproduce goods is part of a concerted strategy made possible by massive subsidies and other financial incentives provided to companies by the Chinese government.

The investigation is under the jurisdiction of U.S. antidumping and countervailing duty (AD/CVD) statutes and will proceed simultaneously before Commerce and the ITC (an independent federal agency). Commerce will determine if the graphite is being sold at less than fair value (“dumped”) and if the Chinese government is subsidizing its production. Separately, the ITC will determine if the U.S. industry has been materially injured, or alternatively, whether the establishment of the domestic industry has been materially retarded by the unfairly priced imports. If both the Commerce and ITC investigations prove conclusive, Commerce can assess additional tariffs equal to the extent of unfair pricing by the Chinese. Experts have calculated appropriate anti-dumping tariffs on graphite from China should be as high as 920%.

This case was initiated by the U.S.-based members of the North American Graphite Alliance (NAGA), which represents American and Canadian producers of battery-grade natural and synthetic graphite. NAGA encourages the U.S. Federal government to craft and implement policies, programs, and funding opportunities that support growing the domestic graphite industry.

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NAGA Urges Canada to Enact Tariffs on Graphite from China

October 10, 2024

Washington, D.C. – Today, the North American Graphite Alliance (NAGA) announced that it formally submitted a request to Canada’s Department of Finance urging it to place tariffs on six graphite products from China. The products, which are subjected to 25% tariffs in the United States, are forms of natural and artificial graphite used to make lithium-ion battery anode material.

“Canada must enact tariffs on Chinese graphite to help mitigate the effects of China’s unethical trade practices and make the North American graphite industry more cost competitive,” said NAGA spokesperson Erik Olson. “By aligning its tariff policies with the US, Canada would reinforce its commitment to building a robust domestic battery supply chain and signal to China that North America is standing together to counter their malicious trade practices. Through consistent and uniform action across Canada and United States, China’s global dominance in the EV battery supply chain can and will be weakened.”

Along with its official request, NAGA submitted an Oxford Economics report that was commissioned earlier this year. It presents startling evidence illustrating China’s dominance of the graphite supply chain and demonstrates how tariffs can protect North America’s graphite producers at a critical moment for the industry.

NAGA believes intervention from the federal government is necessary to protect North America’s nascent graphite industry. In 2023, China produced 67% of the world’s natural graphite and 75% of its artificial graphite. China manipulates the global graphite market by flooding it with cheap, highly subsidized products, allowing it to drive down prices in a concerted effort to smother foreign competitors. In addition, due to its control of global supply, China can restrict graphite exports to wield geopolitical influence, as it did in October 2023 when it enacted a protective trade measure that sparked fears of a shortage in the global market.

Because of these tactics, some domestic graphite producers face significant challenges securing financing as the ensuing market volatility causes a lack of long-term offtake commitments from original equipment manufacturers (OEMs). Without the ability to demonstrate future revenue, graphite companies are at a disadvantage when attempting to secure investments. This lack of investment deprives the projects of the adequate financing needed to bolster domestic production capacity to the scale needed to become cost competitive with China and create an independent battery supply chain here in North America.

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NAGA Applauds Reinstatement of Tariffs on Natural and Artificial Graphite from China

May 30, 2024

Washington, D.C. – Today, the North American Graphite Alliance (NAGA) applauds the decision from the Biden Administration and United States Trade Representative (USTR) Katherine Tai to reinstate Section 301 tariffs on three graphite products from China, as requested by NAGA in its February 21 appeal to USTR. The products, which are forms of natural and artificial graphite used to make lithium-ion battery anode material, have been excluded from 301 tariffs since May 2020. NAGA led an industry effort to have the tariffs reinstated through its formal request to USTR and the issuance of a novel market report demonstrating the necessity and likely impact of such intervention. The exclusions will expire on June 15th, at which time the 25% duty on these graphite products will be reimposed.

“NAGA praises the Biden Administration for reinstating 301 tariffs on natural and artificial graphite from China. Trade protections are necessary to blunt the effects of China’s manipulative trade practices. Thanks to these tariffs, our members will be on a slightly more level playing field with China in the global market,” said NAGA spokesperson Erik Olson. “While we thank the Administration for listening to us, our focus now turns to what additional steps must be taken to protect North America’s graphite producers. There is still much to be done, and the Administration must work alongside the entirety of the battery supply chain to implement policies that will facilitate offtakes and help develop a domestic graphite industry.”

NAGA was formed to advocate for the intervention of the federal government to protect North America’s nascent graphite industry. China dominates the global graphite supply chain and abuses its production capability by creating more supply than demand. This oversupply allows China to manipulate the global graphite market by flooding it with cheap, highly subsidized products, driving down prices in a concerted effort to smother foreign competitors. This malicious trade practice makes it challenging for graphite producers to secure the investments necessary to bolster production capacity to the levels needed to meet domestic demand.

Graphite is the most prevalent mineral in lithium-ion batteries and is listed as a critical mineral on multiple federal government lists. North American demand for graphite anode material will grow 300% over the next five years, while global demand will swell 189% over the same period. The Biden Administration has invested billions of dollars in developing the domestic graphite supply chain through the IRA and the Infrastructure and Investment Jobs Act (IIJA).

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NAGA Welcomes Tariffs on Natural Graphite from China and Urges Further Action from Biden Administration

May 15, 2024

Washington, D.C. – The North American Graphite Alliance welcomes the decision from the Biden Administration and United States Trade Representative (USTR) Katherine Tai to place Section 301 tariffs on natural graphite from China, which is used to make lithium-ion battery anode material. The 25% duty will take effect in 2026.

“NAGA is pleased to see that the Biden Administration has placed tariffs on natural graphite from China. This will help NAGA’s natural graphite companies be more cost competitive with China. We now look forward to hearing from the Administration regarding previously excluded graphite products, which have not been subject to tariffs since 2020,” said NAGA spokesperson Erik Olson. “And while these tariffs are an important first step, many actions are still needed to build an independent domestic graphite supply chain. NAGA stands ready to work alongside the Administration to accomplish that, beginning with a meeting at the White House in a few weeks.”

NAGA was formed to advocate for the intervention of the federal government to protect North America’s nascent graphite industry. China dominates the global graphite supply chain and abuses its production capability by creating more supply than demand. This oversupply allows China to manipulate the global graphite market by flooding it with cheap, highly subsidized product, driving down prices in a concerted effort to smother foreign competitors. This malicious trade practice makes it challenging for graphite producers to secure the investments necessary to bolster production capacity to the levels needed to meet domestic demand.

In February, as part of its campaign to bring attention to the severity of these issues, NAGA commissioned a novel report by Oxford Economics. It presents evidence illustrating China’s dominance of the graphite supply chain and anti-competitive behavior, as well as demonstrates how Section 301 tariffs can protect North America’s graphite producers at a critical moment for the industry.

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NAGA: With EV Tax Credit Finalized, Auto and Battery Makers Must Now Reach Offtakes With North American Graphite Producers

May 3, 2024, Washington, D.C. – Today, the North American Graphite Alliance (NAGA) urges the Biden Administration to stringently impose its new two-year certification requirements for OEMs under the Inflation Reduction Act’s (IRA) Section 30D Clean Vehicle Tax Credit. This will ensure that OEMs reach offtake agreements with North American graphite producers and grow domestic graphite supply by 2027 when the two-year exemption from FEOC sourcing requirements expires.

“The robustness and pace of these new requirements is critical so producers can obtain financing and begin scaling production to fulfill demand by 2027. This effort begins today,” said NAGA Spokesperson Erik Olson. “OEMs must commit to sourcing IRA-compliant graphite from North American suppliers. Only then will the industry be able to sustain itself, compete with China, and bring thousands of jobs to the U.S. and Canada. We do appreciate Treasury’s work in the final rule to ensure that the two-year window is not extended. If we want a North American graphite industry the window must close in 2027.”

NAGA’s comments are in response to the publication of the Biden Administration’s decision to provide a transition period for battery-grade graphite sourcing in the final implementation of the EV tax credit. This final rule grants OEMs a two-year window to continue purchasing graphite mined, manufactured, and processed in China, until January 1, 2027, upon demonstrating a meaningful procurement plan to secure compliant supply chains by the time the exemption expires.

“While we are disappointed in the decision to grant a transition period, our focus now turns to what steps must be taken to protect North America’s graphite producers. The entirety of the battery supply chain must work together to build and sustain a domestic graphite industry,” said Olson. “We look forward to working with OEMs to set their mandatory plans and reports to source from North American sources.”

Graphite, natural or artificial, is the most prevalent mineral in lithium-ion batteries and is listed as a critical mineral on multiple federal government lists. The Biden Administration has invested billions of dollars in developing the domestic graphite supply chain through the IRA and the Infrastructure and Investment Jobs Act (IIJA). Without the commitment of OEMs to purchase North American graphite, these historic investments will not lead to the fruition of a sustainable, secure, and independent domestic graphite industry.

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NAGA Urges Departments of Treasury and Energy to Classify Graphite as a Traceable Critical Mineral in Final Implementation of IRA’s Section 30D Clean Vehicle Tax Credit 

April 2, 2024, Washington, D.C. – Today, the North American Graphite Alliance (NAGA) formally submitted a letter to Secretary of the Treasury Janet Yellen and Secretary of Energy Jennifer Granholm urging them to classify battery-grade graphite as a traceable critical mineral in their upcoming final implementation of the Inflation Reduction Act’s (IRA) Section 30D Clean Vehicle Tax Credit, therefore adhering to the original intent of the law.

The Section 30D credit encourages automakers to source components – including the critical minerals within lithium-ion batteries – domestically so consumers can receive a maximum $7,500 tax credit when purchasing an eligible EV. If the components, or the materials that comprise them, are sourced from a foreign entity of concern (FEOC) such as China, then the vehicle does not qualify for the tax credit.

Graphite, both natural and artificial, is the most prevalent mineral in lithium-ion batteries and is listed as a critical mineral on all applicable Federal government lists. It is indeed traceable and, as such, should be deemed a traceable material for purposes of Section 30D to ensure battery manufacturers are not purchasing it from FEOCs. Doing so would adhere to the original intent of the Section 30D credit, spurring onshore growth of the nascent domestic graphite industry and reducing reliance on China for a critical mineral that is a vital component of the clean energy transition.

China dominates global graphite production, accounting for 79% of natural graphite and 97% of artificial graphite for battery anode material in 2023. Because China can flood global markets with cheap, highly subsidized graphite and drive down prices, domestic graphite manufacturers have difficulty securing the investments necessary to bolster production capacity to the levels needed to meet domestic demand. Section 30D’s FEOC prohibition provides a critical incentive for investing in this supply chain in America. Without this protection in place, the Federal government is providing mixed signals to the market by supporting investments in the domestic graphite industry through grants, loans, and tax credits, but by also potentially allowing Chinese material companies to benefit from IRA tax credits. Such a baseless loophole would be a windfall to unscrupulous foreign competitors and undermine this critical industry’s growth in the U.S. and allied nations, to the detriment of U.S. national security and economic competitiveness.

There are parties within the clean energy industry that argue graphite should be nontraceable because it is technically unfeasible to trace it. This is not a valid argument. There is definitive evidence in the industry, including from NAGA’s five member companies, that tracing graphite is highly feasible, reliable, and effective – for both the lifecycle of natural graphite, which includes mining and processing, and for artificial graphite, which uses high quality petroleum coke from limited refineries as a feedstock. If necessary, it is even possible to trace back to the extraction of the crude oil.

In a statement, NAGA Spokesperson Erik Olson said:

“We urge the Treasury Department to classify graphite as a traceable material to ensure companies aren’t openly incentivized to purchase graphite from China at a critical moment for the industry’s progress. In doing so, the Section 30D tax credit will be closer to achieving its maximum potential impact. The Biden Administration has invested billions of dollars in developing the domestic graphite supply chain through the IRA and the Infrastructure and Investment Jobs Act (IIJA), and by encouraging the continued sourcing of graphite from FEOCs, the Administration would be undermining the progress that its historic investments have made possible.”

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North American Graphite Alliance Issues Market Report Urging Biden Administration to Reinstate Section 301 Tariffs on Chinese Graphite Used in Lithium-Ion Batteries

February 22, 2024, Washington, D.C. – Today, the North American Graphite Alliance announced that it formally submitted a request to United States Trade Representative (USTR) Katherine Tai to reinstate Section 301 tariffs on three graphite products from China used to make lithium-ion battery anode material, along with a novel market report demonstrating the necessity and likely impact of such intervention. The products, which are forms of natural and artificial graphite, have been excluded from 301 tariffs since May 2020.

NAGA believes intervention from the federal government is necessary to protect North America’s nascent graphite industry. China completely controls the global graphite market: in 2023, China produced 79% of the world’s natural graphite and 97% of synthetic graphite for use in anode material. China’s graphite supply surpasses global demand, allowing it to flood markets with cheap graphite and manipulate prices. This is unsurprising, given that the creation of the 301 tariffs themselves are the result of the US government’s determination that China engages in widespread unfair trade practices across numerous industries.

This is a crucial time for the domestic graphite industry. Demand for anode material is expected to surge exponentially as the domestic battery manufacturing market grows. In fact, North American demand for anode material will grow 300% over the next five years, while global demand will swell 189% over the same period. Without a robust domestic graphite industry, China can disrupt the clean energy transition – and the economic and environmental benefits associated with it – at any moment by manipulating the global graphite market.

As part of its campaign to bring attention to the severity of the issue, NAGA commissioned the report by Oxford Economics. It presents startling evidence (including the statistics above) illustrating China’s dominance of the graphite supply chain and demonstrates how 301 tariffs can protect North America’s graphite producers at a critical moment for the industry.

In a statement, NAGA Spokesperson Erik Olson said:

“Trade protections must be enacted to blunt the effects of China’s ability to overproduce graphite and effectively control the global market. Reinstating 301 tariffs on all graphite products would help stimulate the burgeoning graphite industry in North America, boost the U.S. economy and national security, and create a stable industry that will aid the clean energy transition. We urge USTR Tai to forgo excluding graphite products from 301 tariffs again.”

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