OPINION:
The Environmental Protection Agency is under court order to issue final volumes for its 2023-2025 renewable fuel standard by June 14.
A draft of the final rule sits with the White House Office of Management and Budget for interagency review. What remains to be seen is whether the EPA is brazen enough to try to use this rulemaking to fundamentally transform and “electrify” the renewable fuel standard, or RFS, through the creation of what the agency is calling “eRINs” (Renewable Identification Numbers generated from renewable electricity) for electric vehicles — something it is not authorized to do.
While some reports suggest that the EPA is getting cold feet about including these eRINs in its June rule, this has yet to be confirmed, and there is no indication the EPA is abandoning the eRIN idea altogether. If and when the agency does make its push, whether this month or in a separate proposal months from now, RFS and liquid fuel champions in Congress will have a major problem on their hands, and the EPA will need to be reined in.
In its 700-page RFS proposal released in December, the EPA quietly pitched the creation of eRINs, where EV manufacturers — Ford, General Motors, Tesla, etc. — would be allowed to generate RINs through sales of their vehicles. This would unlawfully morph the RFS into yet another Biden administration subsidy for EVs at the expense of U.S.-grown biofuels such as ethanol, biodiesel and renewable diesel, the growth of which was the primary reason the RFS was created.
The EPA estimates that eRINs will be an immediate nine-figure revenue source for automakers. The provision would compel small refineries serving remote parts of the country to cut checks straight to the likes of Elon Musk and Tesla, and every gallon of gasoline and diesel fuel made in the United States would cost even more to produce because of an eRIN-inflated RFS.
This proposal is unlawful.
Congress never gave the EPA permission to remake the RFS into an EV program. On the contrary, when Congress enacted the program in 2007, it tasked the agency with merely studying the feasibility of using renewable electricity to power EVs as a potential “adjunct” to the RFS, an assignment the EPA has never completed (see Section 206 of the Energy Independence and Security Act, or EISA).
The House Energy and Commerce Committee raised this point. The larger question of the EPA’s authority, directly with EPA Administrator Michael Regan, and just this month, Iowa Sen. Chuck Grassley, considered by many to be Congress’ fiercest champion of ethanol and the RFS, and Texas Sen. John Cornyn introduced protective legislation that would bar the EPA from pursuing this unlawful eRIN program.
The EPA has either forgotten (unlikely) the history of Congress’ consideration of eRINs, or it is playing chicken, gambling that lawmakers will have neither the appetite nor the attention span to provide accountability on this issue. The EPA’s — and the president’s — electric-at-all-costs ambitions are clear, but the administration is still bound by law and cannot manipulate the RFS for those purposes.
The EPA’s freelancing on eRINs will not slip by unnoticed or unchallenged whenever it might happen. Fuel manufacturers strongly urge Mr. Regan to exclude eRINs from the final RFS rule and to likewise set achievable liquid biofuel targets for 2023-2025.
If the agency doesn’t or if it offers yet another eRIN proposal down the line, members of Congress should have the 2007 EISA on hand and be ready to hold the EPA in check.
• Chet Thompson is president and CEO of the American Fuel & Petrochemical Manufacturers, the national association representing America’s fuel refineries — makers of gasoline, diesel, jet fuel and renewable diesel, and the financially obligated parties under the federal renewable fuel standard.
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