U.S. EPA Set to Propose Extending Renewable Fuel Credits for EVs

The U.S. Environmental Protection Agency (EPA) is expected to propose that electric vehicles (EVs) to be included into the federal Renewable Fuel Standard (RFS) and be eligible for renewable fuel credits in an upcoming proposal on biofuel blending mandates. The inclusion of EVs into the RFS would be one largest changes to the initiative since it was first launched more than a decade ago. The EPA is expected to send the proposal, which will address mandates for after 2022, to the White House for approval by the end of next week.

The EPA said it aims to meet deadlines to implement the RFS program, but did not reveal any details.

The Biden administration has set a goal to decarbonize the U.S. economy by 2050 to fight climate change, a target that would require widespread adoption of EVs.

The inclusion of EVs into the RFS would add another major industrial player into the policy, which has already pitted the corn and oil lobbies against each other.

Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation’s fuel pool, or buy tradable credits, known as RINs, from those that do.

If EPA indeed extends the program to include EVs, automakers such as Tesla would gain access to a new type of tax credit, known in the industry as electric RINs (e-RINs). The subsidy could spread to related industries too, like car charging companies and landfills that supply renewable biogas to power plants.

Electric vehicles would likely qualify for credits under the program’s “D3” mandate pool, which includes cellulosic biofuels that can be made from wood waste and other feedstocks, the three sources said.

The EPA has been ordered to propose a rulemaking for 2023 mandates by Nov. 16.

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