June 23 (Reuters) – US President Joe Biden rarely makes public mentions of electric car maker Tesla Inc (TSLA.O). But privately, his administration has relied on the company to help develop a new policy to allow electric vehicles (EVs) to benefit from the country’s lucrative subsidies for renewable fuels, according to emails from Reuters.
The Biden administration contacted Tesla on its first day of management, marking the start of a series of meetings on the subject between federal officials and companies related to the EV industry in the coming months, according to emails.
The administration’s early and wide reach reflects that expanding the scope of the US Renewable Fuels Standard (RFS) to make it an instrument for electrifying the nation’s fleet is one of Biden’s priorities in the fight against climate change.
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RFS, which dates back to 2005, is a federal program that requires transportation fuels sold in the United States to contain a minimum amount of renewable fuels. Until now, this was mainly a subsidy for ethanol based on corn.
Tesla’s White House reach also shows that despite public animosity between Biden and Tesla founder Elon Musk, Biden’s team tried early to get the carmaker involved in one of its key political impulses. Biden has set a goal of making half of all new vehicles sold in zero-emission vehicles in 2030.
The U.S. Environmental Protection Agency, which administers RFS, is expected to unveil proposed policy changes sometime this year, identifying new winners and losers in a multibillion-dollar credit market known as RINs, which supports corn and biofuel producers. more than a decade.
Early signs are that the administration is pushing for a rule that benefits carmakers like Tesla by giving them the most access to so-called e-RINS or electric RINs. But the reform could also extend the subsidy to related industries, such as car refueling companies and landfills that supply renewable biogas to power plants, according to industry players.
“We heard through the vine that car companies will really, really like this rule,” said Maureen Walsh, director of federal policy at the American Biogas Council, speaking at a conference in May. But she added: “We’ve all scrapped this pile.”
The idea of including electric vehicles in the RFS has been under consideration for years, but is gaining momentum as Biden’s transition team focuses on electric vehicles as a workable solution to the climate crisis. Transportation accounts for more than a quarter of US greenhouse gas emissions.
The White House did not respond to requests for comment.
The EPA said it consulted “all stakeholders” in reviewing its RFS policy.
The current RFS requires oil refineries to mix ethanol and other biofuels in the fuel pool or to purchase RIN from those who do. This policy caused an economic boom in Farm Belt. But it has also angered environmental groups, who say additional corn production is damaging land and water while prolonging the era of the internal combustion engine.
Friends of the Earth, an environmental group, expressed disapproval of the e-RIN program. The group sees RFS as a policy that has failed to increase next-generation low-carbon fuel production while harming the environment. He also sees the expansion of the program as a slippery slope to increase the use of raw materials for wood and wood waste that can generate electricity.
“RFS needs to be reformed to deal with dirty corn ethanol distributions. It should not be expanded to include new gifts for factory farming and wood biomass,” said Friends of the Earth spokesman Lucas Ross.
CONTACT TESLA
On the morning of Biden’s inauguration in January 2021, EPA official Dallas Burkholder sent an email to Tesla’s leading lobbyist, Rohan Patel, to arrange a meeting on how to turn electric cars into RFS, according to documents reviewed by Reuters . They scheduled a meeting for a week later, records show.
Since then, Biden’s EPA has held additional meetings on the subject with Tesla, groups representing biogas producers such as Waste Management Inc (WM.N) and Republic Services Inc (RSG.N), and charging station companies such as ChargePoint Holdings Inc (CHPT.N) , according to the documents.
The EPA has also organized at least one meeting with White House staff members, including climate adviser Ali Zaidi, to discuss reforms, according to emails.
Biden’s White House is an outspoken supporter of the EV industry, devoting much of its climate hope to getting more electric cars on the road. The two-party infrastructure bill, passed last year, included $ 7.5 billion for new charging stations for electric vehicles, and Biden has sought to recover expired tax credits to help consumers pay for new vehicles.
However, Tesla CEO Musk often contradicts the White House by sending sharp tweets aimed at Biden. In February, Biden publicly acknowledged Tesla’s role in the electric car industry after Musk repeatedly complained that he had been ignored. Read more
WHAT EVERYONE WANTS
Tesla is looking for changes to the RFS that will allow it to earn loans for renewable fuels based on kilowatt-hours driven or similar, according to two sources familiar with the plan. The company has also explored partnerships with biogas producers to leverage them to influence any market stemming from the new rule, sources said.
Tesla did not respond to requests for comment on this story.
Meanwhile, members of the car charging industry are also pushing for a share.
Matthew Nelson, a lobbyist for Electrify America, a charging company, wrote to the EPA in October and told them that e-RIN would do more to allow Biden’s 2030 target of 500,000 charging stations and 50% EV sales than any other policy, according to emails. He added that refueling companies need credit to compete with petrol.
The United States currently has about 48,000 charging stations concentrated in coastal regions, according to the Department of Energy.
Biogas producers, like landfills, are also seeking loans, claiming they are providing renewable fuel to the grid that generates energy for electric vehicles.
Electricity from biogas is now eligible for RIN generation. But the EPA has never approved an application from the industry, as it has not yet determined the best way to trace the power coming into the EV to its origin.
In 2020, the landfill gas will generate about 10 billion kilowatt hours of electricity, or 0.3% of US utility capacity.
“We believe that the implementation of the RFS electricity program is in line with the Biden administration’s climate goals,” said Carrie Anand, executive director of the Biomass Energy Association, to the EPA, according to the documents.
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Report by Jarrett Renshaw in Philadelphia and Stephanie Kelly in New York Editing by Richard Waldmanis and Matthew Lewis
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