Examining Origin Materials Q1 2023 LD-2 Disclosure Form

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1 year ago

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A few weeks ago, I wrote a piece on Origin Materials lobbying efforts -- what they have done thus far and what they appear to be working toward. Today, an LD-2 Disclosure Form was made available to the public which details the most recent quarter's activity. The first number that stuck out to me was that the company spent $170k on lobbying activities in Q1 2023. That's a 750% increase from Q1 2022, when $20k was spent on lobbying activities. For the entirety of 2022, Origin Materials dished out $210k on lobbying.

Now, onto specifics. A total of seven specific issues are listed on the LD-2. I will go through each one, item by item, with any relevant information and possible speculation on what specifically the company may be pursuing.

1-3. Implementation of the Inflation Reduction Act (P.L. 117-58)

Issues regarding the use of biomass in chemicals plastics and fuel

Issue Area Codes CHM (Chemicals/Chemical Industry) & FUE (Fuel/Gas/Oil) & ENV (Environmental)

These are tough to speculate on, being as the IRA is 1039 pages long and lists several sources of funding for "bioproducts." They may fit the bill for several of these, including:

Biochar is a black residue, made of carbon and ashes, that some speculate may be key for soil rejuvenation and carbon sequesterization. It is formed by the pyrolysis of biomass, in the absence of oxygen. This may be related to what Origin Materials has in the pipeline, as far as development of their HTC.

The Eastern Regional Research Center even mentions that "pyrolysis is one of the technologies available to convert biomass to an intermediate liquid product that can be refined to drop-in hydrocarbon biofuels, oxygenated fuel additives and petrochemical replacements." It's possible that Origin's recently announced "oils and extractives" may be related to this too.

Who's to say the National Forest System won't be an Origin partner in the future?

4-5. Issues related to IRC Section 48C tax credit - TAX (Taxes) & ENG (Energy)

This item seems pretty straightforward and easy to understand. On February 3, 2023, the IRS released initial guidance on Advanced Energy Project Credit Allocation Program. As stated in the notice, "The goal of the § 48C(e) program is to expand U.S. manufacturing capacity and quality jobs
for clean energy technologies (including production and recycling), to reduce greenhouse gas emissions in the U.S. industrial sector, and to secure domestic supply chains for critical materials (including specified critical minerals) that serve as inputs for clean energy technology production."

A credit of up to 30% on capital costs may be available, if the company is approved. The competition for the $10 billion allocation is expected to be extremely fierce, as one may expect. The application process begins on May 31, 2023 and concept papers are due by July 31, 2023.

Origin Materials certainly seems to fit the bill to qualify, with potentially more than one product:

6. Farm Bill Re-Authorization

I am really not too sure what to make specifically of the Farm Bill and its relevance to Origin Materials. Obviously, the company has mentioned cotton trash, bagasse, rice hulls, and whole cane as abundant bio-feedstocks to be used in the process. So, it would be in the best interest of the company going forward to ensure that the country's legislation guiding national agriculture, nutrition, conservation, and forestry policy be in line.

Again, specifically what Origin Materials is lobbying for with regards to the Farm Bill is unclear to me. The Farm Bill is passed by Congress every five years, and the current legislation is set to expire on September 30, 2023.

7. Novel biopolymers scale-up defense-wide manufacturing science and technology program

With the general issue area code "BUD" listed on this item, it is referring to budget/appropriations. What we appear to have here is the company pursing a portion of $747M in funding allocated to the Defense-Wide Manufacturing Science and Technology Program, under the Department of Defense. Thanks to the Justification Book, I was able to identify what the company is pursuing here.

So it's quite clear that Origin Materials' lobbying efforts have been kicked into high gear. It's no secret that the company has been pursing these avenues. It has been part of the growth plan all along. The fact that the lobbying spend is increasing is a good sign, a signal that steps are being taken in the right direction as the company pursues all available sources of funding.

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