Renewable Fuels Get a Boost and California Policies Get a Reset

June 18, 2025

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by Allen Schaeffer (Engine Technology Forum) ... Last week, two major policy developments are resetting the debate about the future of vehicles and fuels.

First, after several years of lackluster federal policy support for renewable fuels – even below what was actually being produced – EPA Administrator Zeldin on June 13 issued a proposed rule establishing new biofuel production levels under the Renewable Fuels Standard (RFS), expanding the role of renewable fuels over the next three years. The proposal includes a 5.61 billion gallon biomass-based diesel volume, exceeding the industry’s request of 5.25 billion gallons. It also removed electricity as a qualifying renewable fuel under the RFS program.

Our statement made it clear that advanced engines and renewable fuels together are a sustainable solution for power and mobility. Internal combustion engines are key to both producing our renewable and traditional fuels and realizing the benefits from them to power key sectors of our economy. The EPA proposal will boost our American energy portfolio, where fuels from below the ground and those from above the ground are valuable and contribute to our energy security and sustainability. There are other aspects of the detailed proposal that we are still understanding, but may be cause for concern, such as proposed restrictions on feedstock sourcing. We’ll have more to say on the details of this renewable fuels proposal in the coming months.

Second, President Trump made good on a campaign promise and signed resolutions to eliminate California’s upcoming ban on the sale of new gasoline powered vehicles and tighter emissions standards for heavy-duty trucks. Reactions were swift. On the very same day, California and ten other states kept their promise to challenge the Administration’s action and authority in court. Arguments center on the appropriate and legal use of the Congressional Review Act as the justification to eliminate the emissions policies and whether they are rules or administrative actions.

While the ultimate enforceability of these actions will be decided by the courts and the outcome of the legal challenges, taken together these actions targeting California’s rules accomplished three major things:

First and foremost, it unburdens manufacturers from the legal obligations and consequences of trying to meet a broken-from-the-start mandate to sell vehicles that consumers just aren’t buying in the quantity and timeframes desired by regulators.

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EVs are gaining market share, but 10% was never going to become 35% in a year. Despite more than 75 new EV models introduced in the past four years, according to AAA in a recent survey, consumer interest in going fully electric is slipping, reaching its lowest level since 2019.

Second, it eliminates an arbitrary mandate to end the sale of new vehicles powered by internal combustion (gasoline) engines starting in 2035 (Advanced Clean Cars II), and a mandate for an increasing number of zero emissions heavy-duty vehicles to be sold while limiting the sales of diesel trucks (Advanced Clean Truck Rule). The government’s role in picking winners and losers has never gone well.
Third, if successful, it resets national environmental policy with EPA and eliminates an out-size influence of a single state on national policy.

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Regardless of the outcome of the litigation challenging President Trump’s actions and the ultimate enforceability of California’s vehicle policies, it is safe to say that car and truck manufacturers will continue to produce zero-emissions vehicles at some level. Technology forcing statutes/regulations can effect positive change; however, in this instance, critical variables such as infrastructure and feasibility across various sectors has yet to been proven as reliable (or cost-effective).

The growth of ZEV options will be more organic and market driven rather than shaped by government mandates. For some applications, zero emissions technology may be the best choice. In other applications, consumers and businesses continue to prefer gasoline, diesel, natural gas, or increasingly, renewable fuels. We should welcome, encourage, and embrace both approaches.

The policy pendulum is one in perpetual motion. Some would say that policies have gone too far in California’s direction – too stringent and prescriptive – while others would say the Federal government has not done enough – too lax and ineffective. Where we need to be is probably more in the middle, a forward-leaning approach that embraces new opportunities without abandoning proven, effective solutions. READ MORE

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Engine Technology Forum Praises EPA Proposal of New Renewable Fuel Standards (Engine Technology Forum)
EPA Proposes New Renewable Fuel Standards to Bolster U.S. Energy Security (Advanced Clean Tech News)

Excerpt from Engine Technology Forum: The Engine Technology Forum (ETF) issued the following statement from Executive Director Allen Schaeffer about today’s (June 13, 2025) action by the U.S. Environmental Protection Agency (EPA) establishing new renewable fuel targets, known as the Set 2 Proposal:

“The Engine Technology Forum welcomes EPA’s announcement today of the establishment of a robust and growth oriented renewable fuels policy. The policy will boost our American energy portfolio, where fuels from below the ground and those from above the ground are valuable and contribute to our energy security and sustainability.

“Today’s proposed rule was boosted by the coming together of the renewable fuels and petroleum sectors around shared goals and vision for meeting our increasing demands for energy. ETF joined fuels industry leaders in supporting the call for a minimum of 5.25 billion gallon biomass-based diesel volume, and EPA delivered more.

“Advanced engines and renewable fuels together are a sustainable solution for power and mobility. Internal combustion engines are key to both producing our renewable and traditional fuels and realizing the benefits from them to power key sectors of our economy. Biodiesel, renewable diesel, renewable natural gas, and ethanol already play a vital role in our nation’s transportation system and key industries. Thanks to this proposal, that role will be expanded in the future.

“Today’s welcome action by Administrator Zeldin ends a period of stagnation and uncertainty for fuels needed to help power our agriculture and transportation sectors in the future. We look forward to working with our members and EPA on the many important details of the proposal on the road to a final rule.” READ MORE