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Welcome to Grid Brief! Here’s what we’re looking at today: China’s bread basket braces for more brutal rainfall, Hyundai and LG plan for a large EV plant in America, Colombia accuses American coal firm Drummond for funding paramilitary group, and more.

China Braces for Wheat-Damaging Rain

China’s largest wheat-growing region, Henan, expects to be hammered by rainfall in the coming days. This will further hurt the country’s harvest, as punishing rainfall earlier in May has already damaged crops.

“China's winter wheat accounts for the majority of the country's annual output,” reports Reuters. “Most of the country's other key wheat-growing provinces, including the central and southern parts of Henan, Anhui, Hebei, Jiangsu, and southern Shaanxi, have also been drenched by recent rain, said Ma Wenfeng, a senior analyst with Beijing Orient Agribusiness Consultancy.”

The rain is estimated to impact 30 million tons with between 10-20 million tons sprouting prematurely rendering them unfit for consumption. China’s agriculture ministry has urged local authorities to drain the fields and to speed up the harvest to save as many of the crops as possible.

Hyundai, LG Plan $4.3 Billion EV Plant In US

Hyundai and LG plan on investing $4.3 billion to build a battery factory for electric vehicles in America. The companies are taking advantage of tax benefits that stem from Biden’s push to cut American dependence on China.

“The Hyundai group — which includes Hyundai Motor Co., Kia Corp. and Genesis — and LG Energy will split the investment 50-50, according to a statement Friday. The plant, in Bryan County, Georgia, will have an annual capacity of 30 GWh, enough to power 300,000 electric vehicles,” reports Bloomberg. “Construction will start in the second half of 2023 and production will begin as early as the end of 2025.”

This project isn’t the only battery plant Hyundai wants to build in America. The Korean car giant wants to build another one in Georgia with SK On and plans to build battery packs for EVs at its other plant nearby.

“Two strong leaders in the auto and battery industries have joined hands, and together we are ready to drive the EV transition in America,” said Youngsoo Kwon, chief executive officer of LG Energy Solution.

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Colombia Accuses US Firm of Funding Paramilitary Group

Colombia’s attorney general has accused the current head of American coal mining firm Drummond and his predecessor for funding a far-right paramilitary group in the country.

“According to prosecutors, there was ‘abundant evidence’ that Augusto Jimenez and Miguel Linares, who headed the company from 1990 and 2012, and from 2013 onwards, respectively, had used company funds for illicit support to a right-wing group,” reports Oilprice.com.

"Linares Martinez and Jimenez Mejia, between 1996 and 2001, increased the value of a food provision contract with a provider company to obtain additional resources and use them to cover previously-agreed illegal obligations with...the United Self-Defense Forces of Colombia (AUC)," a statement by the attorney general’s office said.

Allegedly, the payments were to gain access to assets Drummond owned in territory controlled by the paramilitary group.

Drummond said that the accusations are “not backed up with credible evidence” and rely on “false declarations by convicted criminals who receive payments for testimony.”

Drummond is the largest thermal coal producer in Colombia. This year, its total exports are 30 million tons.

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Conversation Starters

• The debt limit deal passed late last night. “I am proud to announce that we have finally secured the completion of the Mountain Valley Pipeline and have done so with broad, bipartisan support,” Senator Joe Manchin said in a statement. “For more than nine months, I have worked tirelessly to build consensus and garner the support necessary to complete MVP.”

• State Farm quits California. “For nearly 35 years, California has been famously protective of insurance policyholders through laws and policies aimed at limiting rate increases. But the system is coming under scrutiny following the stunning announcement Friday by State Farm — the largest property insurer in California — that it is no longer writing new policies for homeowners or businesses in the state,” reports E&E News. “Experts say State Farm’s decision highlights a flaw in California policies that effectively blocks insurers from considering climate change in setting premiums and discourages them from seeking rate increases sufficient to cover the state’s growing wildfire risk. In addition, the policies have created insurance premiums that are far too low and are forcing insurers to pull back their coverage in California to remain profitable.”

• Pink hydrogen stays on hold. “Constellation Energy Corp. has an ambitious $1 billion plan to produce hydrogen using carbon-free nuclear power. But the plan is on hold — and may be derailed completely — as the company awaits guidance from Washington on a tax credit that’s expected to play a key role in efforts to use the gas to decarbonize heavy industries,” reports Bloomberg. “The US Treasury Department is expected to issue rules in the coming months clarifying how hydrogen suppliers will qualify for a subsidy of as much as $3 per kilogram that’s included in the Inflation Reduction Act. The industry has been waiting for guidance since the landmark law was signed in August, and the fate of Constellation’s plan hinges on whether the Biden administration imposes strict limits urged by environmentalists and some Democratic lawmakers.”

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