Exclusive: Biden Administration Could Delay Electric Vehicles Biofuel Program Decision

May 01, 2023

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by Stephanie Kelly (Reuters) The Biden administration could delay deciding whether to give electric vehicle (EV) manufacturers tradable credits for using electricity generated from renewable fuels, potentially putting the effort to boost EV automakers like Tesla (TSLA.O) in political limbo, two sources familiar with the matter said.

The Environmental Protection Agency (EPA) last year recommended adding EVs to the U.S. Renewable Fuel Standard (RFS), which incentivizes oil refiners to blend biofuels. The EPA under the Biden administration is now testing the legal limits of the liquid fuel program by extending it to EVs.

Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation's fuel mix, or buy tradable credits called RINs from those that do.

Adding EVs to the program would recognize the possibility that electric vehicles could be charged using power from the grid generated by renewable natural gas from agricultural methane and U.S. landfills. The EPA has proposed granting EV manufacturers tradable credits based on the amount of renewable electricity that makes it on the grid.

It would also bring new stakeholders from the EV industry into a program that has long been a battleground for the powerful oil and corn lobbies. Renewable gas producers and EV manufacturers like Tesla have been jockeying to gain the most benefits from the new credits.

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The annual quotas are required under a court order to be finalized in June and decoupling the two measures robs the EV effort of a definitive timeline and infuses the effort with uncertainty.

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The House of Representatives' Energy and Commerce Committee this week wrote to the EPA to challenge the EV program, arguing that the RFS was intended to center on liquid transportation fuels and not to electrify transportation.

The November proposal foresaw EV manufacturers could generate as many as 600 million credits in 2024 and 1.2 billion of them by 2025.

The delay for finalizing the EV program, however, opens up the possibility that volume mandates made available for it could be shepherded toward other renewable fuel pools, including blending mandates for renewable diesel and sustainable aviation fuel (SAF).

Producers of those fuels have been lobbying the administration for months, arguing that proposed volume mandates for renewable diesel and SAF were far too low for the amount of capacity coming online to make those fuels. READ MORE

Lawmakers ask EPA to delay plans for eRINs (Ethanol Producer Magazine)

EPA Reportedly Weighs Delaying Implementation of EV Credits Under RFS (Inside EPA)

U.S. Administration Set To Delay Decision On Biofuel Credits For EVs (OilPrice.com)

EPA faces heat on EV proposal as deadline looms: Biomass power advocates are the latest to weigh in as industries scuffle over renewable fuel credits for electric vehicles. (E&E News Greenwire)

Biogas groups, lawmakers jockey for changes as EPA nears final rule on eRIN market (Waste Dive)

RNG Coalition Urges EPA to Follow Through on eRIN Provision (NGT News)

Excerpt from Ethanol Producer Magazine: House Energy and Commerce Committee Republications on April 25 sent a letter to U.S. EPA Administrator Michael Regan urging the agency to reconsider its plan to open the Renewable Fuel Standard to certain sources of renewable electricity.

The EPA’s proposed “set” rule aims to establish RFS renewable volume obligations (RVOs) for 2022, 2023 and 2024. It also includes a long-awaited provision to allow renewable identification numbers (RINs) to be generated for certain types of biobased renewable electricity used to fuel vehicles (eRINs)

The letter, led by Reps. Cathy McMorris Rogers, R-Wash., and Richard Hudson, R-N.C., encourages the EPA to reconsider its proposal to allow the generation of eRINs.

“When the RFS was first created by Congress in 2005 and amended two years later in 2007, the program was designed to encourage the use of certain types of domestically produced blends of gasoline for vehicles,” they wrote. “The RFS is intended to focus on liquid transportation fuels, and not to be used as a tool to electrify transportation. However, EPA’s proposed rule significantly changes how RINs would be addressed under the RFS program to allow for blended transportation fuel produced from renewable biomass to generate eRINs for electric vehicles (EVs).”

The lawmakers specifically cite concerns over the EPA’s plan to allow original equipment manufacturers (OEMs) of EVs to generate RINs for light-duty vehicles. The letter acknowledges that the Energy Independence and Security Act of 2007 included a provision that required the EPA to study the feasibility of issuing credits for electric vehicles powered by electricity produced from renewable energy sources. That study was to take place within 18 months. The representatives note that the agency has already missed that deadline by nearly 14 years, but criticize the EPA for “moving forward with the rulemaking without studying the feasibility or market impacts of establishing an entirely new RIN program that would be contrary to both the RFS’ statutory language and the intent of Congress.”

A full copy of the letter is available on the Energy and Commerce Committee website. READ MORE

Excerpt from Waste Dive:

A coalition of biogas industry groups that include the RNG Coalition and American Biogas Council urged the U.S. EPA to finalize a program that is slated to include the fuel in a lucrative new credit market in a letter sent to the agency last week. The EPA must set biofuel quotas under the Renewable Fuel Standard, which governs the RIN market, by June 14, but is reportedly considering punting its eRIN decision as a result of pushback.
The proposed eRINs program would generate credits from renewable electricity systems like biogas to power electric vehicles. But Republicans on the House Energy & Commerce Committee sent a letter to the EPA saying the program “inserts uncertainty into the transportation fuels market.”
Meanwhile, Democrats have sent their own letter urging the inclusion of waste-to-energy facilities if the eRIN program is adopted. The letter was signed by 10 lawmakers, all from states like Florida, California and Connecticut that currently have waste-to-energy facilities. READ MORE