Two sources said the Biden administration could delay deciding whether to give electric vehicle (EV) manufacturers tradable credits for using electricity generated from renewable fuels, putting the effort to boost EV automakers like Tesla (TSLA.O) in political limbo.
Last year, the EPA suggested adding EVs to the Renewable Fuel Standard (RFS), encouraging oil refiners to combine biofuels. The Biden EPA is extending the liquid fuel program to EVs to assess its legality.
Oil refiners must blend billions of gallons of biofuels into the nation’s gasoline mix or buy tradable RINs from those that do under the RFS.
The initiative would acknowledge that renewable natural gas from agricultural methane and U.S. landfills may power electric automobiles. The EPA proposes giving EV makers tradable credits for renewable power on the grid.
It would also add EV sector partners to a program long fought over by the big oil and maize groups. Renewable gas producers and EV makers like Tesla compete for the new credits.
Last year, the EPA proposed adding EVs to the renewable fuel program when it proposed annual biofuel blending mandates from 2023 to 2025. Still, the administration has grown concerned that expected legal challenges to the EV measure will also block the usual quotas and is considering separating the two, the two sources said.
Decoupling the two measures deprives the EV initiative of a deadline and injects uncertainty because the yearly quotas must be approved in June by court order.
The EPA said it was reviewing last year’s proposed rules but couldn’t say more.
“EPA staff are currently working to finalize the rule by the June 14 consent decree deadline,” said EPA spokesperson Timothy Carroll.
President Joe Biden’s climate change plan relies billions of dollars in public subsidies to convert the nation’s auto fleet to EVs by 2030. Any delays might jeopardize his objective of decreasing greenhouse gas emissions.
This week, the House Energy and Commerce Committee wrote to the EPA to challenge the EV program, arguing that the RFS was meant to focus on liquid transportation fuels.
The November plan projected 600 million credits for EV producers in 2024 and 1.2 billion in 2025.
However, the delay in finalizing the EV program allows volume mandates for other renewable fuel pools, such as blending mandates for renewable diesel and sustainable aviation fuel (SAF).
Given months, renewable diesel and SAF producers have lobbied the government, saying that suggested volume limits were too low given the amount of capacity available to create such fuels.
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