Biden Administration may delay the decision to offer electric automakers tradable credits for using renewable fuel-generated electricity. Two sources familiar with the matter claim that the delay is due to legal challenges and concerns regarding the plan, Reuters reports.
The US government developed the plan to award credits to EV makers like Tesla for charging electric vehicles with electricity produced from renewable natural gas or methane gathered from sources like cattle or landfills.
The US Renewable Fuel Standard (RFS) should include EVs, the Environmental Protection Agency (EPA) proposed in 2022. For those unaware, the RFS mandates that oil refiners either mix biofuels into the fuel they manufacture themselves or purchase credits from other refiners who do.
Now, the EPA is currently testing the legal limitations of the liquid fuel program by including electric vehicles.
Legal challenges and planned strategy
The report noted that the majority of credits made under the RFS are for mixing liquid fuels like ethanol manufactured from corn to gasoline. That said, the program would take a fresh turn if credits were added for electricity produced from renewable gas and then used to charge EVs.
Interestingly, the EPA first suggested including EVs in the plan when it detailed the requirements for blending biofuels for 2023–2025.
In order to prevent legal challenges to the inclusion of electric vehicles from postponing the release of the next batch of RFS biofuel quotas, the government has decided to separate the two matters.
A court decision stipulates that the annual quotas must be completed by June.
The EPA stated that it was taking into account feedback from the public on the planned change from the prior year. However, it has not yet provided any additional information regarding whether it would exempt EVs from the June deadline.
“EPA staff are currently working to finalize the rule by the June 14 consent decree deadline.”
EPA spokesperson Timothy Carroll
The Energy and Commerce Committee of the House of Representatives, which Republicans control, recently penned to the EPA to protest the EV program. It stated that the RFS was not meant to electrify transportation but rather to focus on liquid transportation fuels.
Nonetheless, President Joe Biden’s climate change plan relies heavily on electrifying the country’s vehicle fleet. The credits would have increased the Inflation Reduction Act’s billions in incentives for boosting the switch to clean mobility.
According to the proposal from November, electric automakers might produce as many as 600 million credits in 2024 and 1.2 billion by 2025. EPA data also indicated that equivalent credits cost around $2.30 each in March.
See Also:
- Factbox: How an amended US biofuels program could benefit EV manufacturers
- US Government launched electrified Clean Bus Program
- Japan auto lobby says the new US EV tax credits might violate international law
- US House enacts Climate Act, to affect EV tax credits
- EPA to mandate up to 67% of all new cars sold in the US to be electric by 2032
The 2023–2025 mandate may have additional volume accessible to alternative renewable fuel pools due to the delay in the EV credit program, including blending for renewable diesel and sustainable aviation fuel (SAF). Notably, manufacturers of such fuels have been appealing to the Biden administration for greater amounts for months.
