June 23 (Reuters) – U.S. President Joe Biden rarely mentions electric car maker Tesla Inc. (TSLA.O) in public. But privately, his administration has backed the company to help develop a new policy that would allow electric vehicles (EVs) to benefit from the country’s lucrative renewable fuel subsidies, according to Reuters-reviewed emails .
The Biden administration contacted Tesla on his first day in office, marking the start of a series of meetings on the subject between federal officials and companies linked to the electric vehicle industry during the following months. according to emails.
The administration’s early and widespread disclosure reflects that expanding the scope of the U.S. Renewable Fuel Standard (RFS) to make it a tool for electrifying the country’s car fleet is one of the Biden’s priorities in the fight against climate change.
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The 2005 RFS is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. So far, it has been mainly a subsidy to corn-based ethanol.
The White House’s disclosure to Tesla also shows that despite a public outcry between Biden and Tesla founder Elon Musk, the Biden team tried to implicate the automaker in one of its key policies. Biden has set itself the goal of making half of all new vehicles sold by 2030 emissions-free.
The U.S. Environmental Protection Agency, which administers the RFS, is expected to reveal the proposed policy changes sometime this year, defining new winners and losers in a multimillion-dollar credit market, known as the RIN. which has supported maize producers and biofuel producers. for more than a decade.
The first indications are that the administration is leaning towards a standard that benefits car manufacturers such as Tesla, giving them greater access to so-called electric e-RINS. But the reform could also extend the subsidy to related industries, such as car charging companies and landfills that supply renewable biogas to power plants, according to industry players.
“We’ve heard through the vineyard that car companies will really like this rule,” Maureen Walsh, federal policy director for the U.S. Biogas Council, told a conference in May. But he added: “We’ve all been scrapping in this pile.”
The idea of including electric vehicles in the RFS has been considered for years, but it gained momentum as the Biden transition team focused on electric vehicles as a work-friendly solution to the climate crisis. . Transportation accounts for more than a quarter of U.S. greenhouse gas emissions.
The White House did not respond to requests for comment.
The EPA said it consulted “all stakeholders” in its review of the RFS policy.
The current RFS requires oil refineries to blend ethanol and other biofuels into the fuel pool or buy RIN from those who do. This policy has spurred an economic boom in Farm Belt states. But it has also angered environmental groups who say the additional production of corn is damaging land and water as it prolongs the era of the internal combustion engine.
Friends of the Earth, an environmental group, has expressed its disapproval of an e-RIN program. The group sees the RFS as a policy that has failed to increase production of next-generation low-carbon fuels while harming the environment. He also sees expanding the program as a slippery slope to increase the use of raw materials for wood and wood waste, which can generate electricity.
“The RFS should be reformed to address the gifts of raw corn ethanol. It should not be expanded to include new gifts for industrial agriculture and woody biomass,” the spokesman said. Friends of the Earth, Lukas Ross.
TESLA IS BACK
On the morning of Biden’s presidential inauguration in January 2021, EPA staff Dallas Burkholder emailed a prominent Tesla lobby, Rohan Patel, to arrange a meeting on how to incorporate electric cars into the RFS, according to documents reviewed by Reuters. They scheduled a meeting for a week later, according to records.
Since then, the Biden 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. with ChargePoint Holdings Inc (CHPT.N). ), according to the documents.
The EPA has also held at least one meeting with White House staff members, including climate adviser Ali Zaidi, to discuss the reforms, according to emails.
Biden’s White House has been an unwavering supporter of the electric vehicle industry, putting much of its climate hope on getting more electric cars on the road. The bipartisan infrastructure bill passed last year included $ 7.5 billion for new electric vehicle charging stations, and Biden has tried to restore overdue tax credits to help consumers pay for new vehicles.
However, Tesla CEO Musk has often disagreed with the White House, sending harsh tweets to Biden. In February, Biden publicly acknowledged Tesla’s role in making electric vehicles, after Musk repeatedly complained about being ignored. Read more
WHAT EVERYONE WANTS
Tesla is looking for changes to the RFS that will allow it to obtain renewable fuel credits based on kilowatt hours per hour or similar metrics, according to two sources familiar with the plan. The company has also explored partnerships with biogas producers to leverage them in any market that emerges from the new standard, sources say.
Tesla did not respond to requests for comment on this story.
Meanwhile, members of the car charging industry are also pushing to share it.
Matthew Nelson, a lobbyist for Electrify America, a commercial group of cargo companies, wrote to the EPA in October and told them that e-RINs would do more to enable Biden’s 2030 targets. 500,000 charging stations and 50% of electric vehicle sales than any other policy. according to emails. He added that cargo companies need credit to compete with gasoline.
The United States currently has about 48,000 charging stations, concentrated around coastal regions, according to the Department of Energy.
Biogas producers, like landfills, also want credit, arguing that they provide renewable fuel to the grid that generates energy for electric vehicles.
Biogas-derived electricity is now eligible to generate RIN. But the EPA has never approved an application from the industry because it has yet to determine the best way to track the power that enters electric vehicles to their source.
By 2020, landfill gas generated about 10 billion kilowatt-hours of electricity, or 0.3% of U.S.-scale electricity.
“We believe the implementation of the RFS power program aligns well with the Biden administration’s climate goals,” Carrie Annand, executive director of the Biomass Power Association, wrote to the EPA. .
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Report by Jarrett Renshaw in Philadelphia and Stephanie Kelly in New York Edited by Richard Valdmanis and Matthew Lewis
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