The Biden Administration is considering a delay to a rule proposed by the Environmental Protection Agency (EPA), which would allow electric vehicle makers to earn credits for biofuels.
The proposal, initially unveiled December 2022, would alter the U.S. Renewable Fuel Standard (RFS), a policy requiring oil companies to mix renewable fuel with their end product. Under the rule, refiners earn credits based on the total volume of biofuel blended into their end product and must maintain a certain number of these credits to comply with the law. Alternatively, credits can be purchased from competitors who already meet the requirements within the RFS. If the EPA’s recommendation were put into effect, auto manufacturers could earn and eventually sell credits by charging their electric vehicles with power generated from biofuels. In this manner, EV makers could earn money by increasing their reliance on renewable energy. With credits selling for roughly $2.30 each in March, and a forecast that the RFS revision would create 1.2 billion credits by 2025, the earnings could be substantial for large brands such as Tesla.
However, Senator Mike Lee of Utah, a center for domestic oil refineries, argued that the EPA’s rule would undermine the intention of the RFS, which focuses solely on liquid fuel and is not intended to drive EV adoption. Lee also contended that the legislation was an “attempt by the Biden Administration to prop up the market for EVs with the intent of destroying demand for the internal combustion engine and giving consumers no choice but to drive EVs.” The House’s Energy and Commerce Committee has since written to the EPA, echoing the senator’s concerns.
Currently, the policy is scheduled to arrive in June as part of the EPA’s finalized biofuel quotas for 2023-2025. However, Reuters has obtained two insider sources claiming that the President is seeking to delay the policy to avoid a legal showdown, saving the RFS revisions for later in the year but allowing the renewable fuel guidelines to arrive on schedule. But when asked for comment, agency spokesperson Timothy Corroll would only offer that “EPA staff are currently working to finalize the rule by the June 14 consent decree deadline.” It remains to be seen whether the Biden Administration will cave to pressure or if the rule will be successfully enacted, although an answer is likely to arrive before the end of the month.
