The Biden administration relies on Tesla for guidance in reforming its renewable fuel policy

June 23 (Reuters) – US President Joe Biden rarely mentions electric car maker Tesla Inc (TSLA.O) publicly. But privately, his administration has relied on the company to help create a new policy to allow electric vehicles (EVs) to take advantage of the country’s lucrative subsidies for renewable fuels, according to emails reviewed by Reuters.

The Biden administration contacted Tesla on its first day in office, marking the start of a series of meetings on the subject between federal officials and companies related to the electric car industry in the months that followed, according to the emails.

The administration’s early and comprehensive review reflects that expanding the scope of the US Renewable Fuel Standard (RFS) to make it a tool for electrifying the nation’s fleet is one of Biden’s priorities in the fight against climate change.

RFS, which dates back to 2005, is a federal program that requires transportation fuels sold in the United States to contain a minimum volume of renewable fuel. Until now, it has primarily been a supplement to corn-based ethanol.

The White House’s visit to Tesla also shows that, despite a public grudge battle between Biden and Tesla founder Elon Musk, the Biden team tried early on to involve the carmaker in one of its most important political advances. Biden has set a goal to make half of all new cars sold in 2030 zero-emission cars.

The US Environmental Protection Agency, which manages RFS, is expected to unveil proposed policy changes sometime this year, defining new winners and losers in a multi-billion dollar credit market known as RINs, which has supported corn growers and biofuel producers for more than a decade. .

Early signs are that the administration is leaning towards a rule that benefits car manufacturers such as Tesla, and gives them the greatest access to so-called e-RINS, or electric RINs. But the reform could also spread subsidies to related industries, such as car charging companies and landfills that supply renewable biogas to power plants, according to industry players.

“We have heard through the vine that car companies are really, really going to like this rule,” Maureen Walsh, director of federal policy at the American Biogas Council, said at a conference in May. But she added, “We’ve all scrapped that pile.”

The idea of ​​including electric vehicles in RFS has been under consideration for years, but gained momentum when Biden’s transition team zeroed on electric cars as a job-friendly 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 interested parties” in its RFS policy review.

Current RFS requires oil refineries to mix ethanol and other biofuels in the fuel pool or purchase RINs from those who do. This policy has spurred an economic boom in the Farm Belt states. But it has also angered environmental groups who say that the extra corn production damages land and water while prolonging the era of the internal combustion engine.

Friends of the Earth, an environmental group, has expressed disapproval of an e-RIN program. The group sees RFS as a policy that has failed to increase the production of new generation lower carbon fuels, while at the same time harming the environment. It also sees the expansion of the program as a slippery slope towards increasing the use of raw materials for wood and wood waste, which can generate electricity.

“RFS should be reformed to deal with donations for dirty corn ethanol. It should not be extended to include new donations for factory farming and woody biomass,” said Friends of the Earth spokesman Lukas Ross.

TURN TO TESLA

On the morning of Biden’s inauguration in January 2021, EPA employee Dallas Burkholder sent an email to a top Tesla lobbyist, Rohan Patel, setting up a meeting on how to incorporate electric cars into RFS, according to documents reviewed by Reuters. They planned a meeting a week later, records show.

Since then, the Biden EPA has held several 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 set up at least one meeting with White House staffers, including climate adviser Ali Zaidi, to discuss the reforms, according to the emails.

The White House in Biden has been an indispensable supporter of the electric car industry, and attached much of its climate hope to getting more electric cars on the road. The two-part infrastructure law passed last year included $ 7.5 billion for new charging stations for electric cars, and Biden has sought to reintroduce expired tax deductions to help consumers pay for new vehicles.

Nevertheless, Tesla’s CEO, Musk, has often been at odds with the White House, sending out harsh tweets directed at Biden. In February, Biden publicly acknowledged Tesla’s role in EV production, after Musk repeatedly complained about being ignored. read more

WHAT EVERYONE WANTS

Tesla is seeking changes to the RFS that will allow it to earn renewable fuel credits based on kilowatt hours driven or similar calculations, according to two sources familiar with the plan. The company has also explored partnerships with biogas producers to give them influence in the market that emerges from the new rule, the sources say.

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 trading group for charging companies, wrote to the EPA in October, telling them that e-RINs would do more to enable Biden’s 2030 target of 500,000 charging stations and 50% sales of electric cars than any. other policy, according to the emails. He added that charging companies need the credit to compete with gasoline.

The United States currently has around 48,000 charging stations, concentrated around coastal regions, according to data from the Department of Energy.

Biogas producers, such as landfills, will also have credits, claiming that they provide renewable fuel to the grid that generates the power of electric vehicles.

Biogas-derived electricity is already qualified to generate RINs. But the EPA has never approved an application from the industry because it has not yet decided the best way to track the power coming into electric cars back to its origins.

In 2020, landfill gas generated around 10 billion kilowatt hours of electricity, or 0.3% of the power on a US utility scale.

“We feel that the implementation of the electricity program in RFS is in line with the Biden administration’s climate goals,” Carrie Annand, CEO of the Biomass Power Association, wrote to the EPA, according to the documents.

Reporting by Jarrett Renshaw in Philadelphia and Stephanie Kelly in New York Editing by Richard Valdmanis and Matthew Lewis

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