The Environmental Protection Agency (EPA) has revised its Renewable Fuel Standard (RFS) program for 2023-2025, removing a proposed provision that would have subsidized electric vehicle (EV) production. The original proposal, which introduced a new credit system called "eRINs," aimed to incentivize EV manufacturing by allowing EV companies to generate credits for vehicles charged with biofuel-generated electricity. This would have effectively required petroleum refiners to subsidize EV manufacturers.

Refiners strongly opposed the eRIN proposal, arguing that it misused the RFS program, intended to promote U.S. energy independence through liquid biofuels, to subsidize EVs. Chet Thompson, president and CEO of the American Fuel & Petrochemical Manufacturers (AFPM), praised the EPA's decision to abandon the "unlawful" eRIN system, emphasizing that it didn't belong in the RFS. However, he also criticized the finalized RFS program for setting "unachievable" conventional biofuel targets.

President Biden's administration has set ambitious goals for EV adoption, aiming for 50% of new car sales to be zero-emissions by 2030. This push for EVs has sparked debate and raised concerns about potential impacts on the existing automotive industry and reliance on foreign supply chains.

The EPA defended the original eRIN proposal, stating it would support Congressional goals of reducing greenhouse gas emissions and increasing energy security. Despite removing the eRIN provision, the agency indicated it would explore alternative paths forward for the program.

Republican lawmakers also opposed the eRIN system, with Senators Chuck Grassley and John Cornyn introducing legislation to prevent its implementation. They argued that the proposal would unfairly benefit EV manufacturers at the expense of biofuel producers. Grassley criticized the proposal for diverting resources from biofuels to create a "brand new cash stream" for EV makers.

The RFS program mandates a certain percentage of biofuels be blended into transportation fuel. Refiners unable to meet these requirements can purchase Renewable Identification Numbers (RINs) credits. The EPA's original proposal would have allowed EV makers to sell these credits, generating a new revenue stream.

The EPA asserts the finalized RFS program will promote biofuel growth, reduce U.S. oil imports, and strengthen the rural economy. EPA Administrator Michael Regan highlighted the program's benefits for consumers, domestic fuel production, and greenhouse gas emission reduction.

Despite abandoning the eRIN subsidy, the EPA continues to pursue aggressive regulations to promote EV adoption. In April, the agency proposed new tailpipe emission standards that could lead to 67% of new car purchases being electric by 2032. These regulations are still under review and have yet to be finalized.