EPA Drops Controversial eRINs Provision from Proposed 2023-2025 RFS Standard

The EPA removed the controversial electric vehicle (EV) credit (eRIN) from the proposed RFS rule for 2023-2025 now under final review at the White House Office of Management and Budget (OMB). Under the proposed rule issued in November, the agency would allow EV automakers to generate eRINs for charging vehicles using power generated from renewable natural gas or methane generated from sources such as cattle or landfills. EMA submitted written comments to the EPA earlier this year demanding the agency to drop the proposed creation of eRINs under the RFS. EMA argued in its comments that Congress did not authorize eRINs under the Energy Independence and Security Act of 2007 (EISA) which created the RFS.

EMA pointed out that EISA contains no affirmative authorization for an eRIN regulatory mandate. Under Section 206 of EISA, Congress merely contemplated the feasibility of a credits system connected to renewable electricity for electric vehicles (EVs) as an adjunct program to the RFS. Instead, lawmakers instructed the EPA to consider alternatives for designing an eRINS pilot project and report its findings back to Congress. The agency never conducted the study or submitted a report to Congress as required under Section 206.

EPA likely dropped the eRINs proposal to avoid almost certain civil litigation that would significantly delay finalizing the 2023-2025 RFS blending mandates. Removal of the eRINs provisions in the RFS is good news for energy marketers because it removes a powerful incentive for the manufacture of EVs. Also, dropping the eRINs proposal means more blending volume is available for other renewable fuel pools under the 2023-2025 mandate, including blending for renewable diesel which EMA strongly supports. The Biden administration is still hopeful it will pass a final rule on the eRINs program before the end of the year, even if it is uncoupled from the annual RFS blending mandate.

In a letter last month, House Energy and Commerce (E&C) Committee Republicans noted that the current RFS was created by Congress “to encourage the use of certain types of domestically produced blends of gasoline for vehicles. The RFS is intended to focus on liquid transportation fuels, and not to be used as a tool to electrify transportation.” Additionally, a bipartisan group of six Western lawmakers urged the EPA to remove the eRINS proposal. Reps. David Valadao (R-CA), Jim Costa (D-CA), Cliff Bentz (R-OR), Lori Chavez-DeRemer (R-OR), Chris Stewart (R-UT) and Doug LaMalfa (R-CA) argue that e-RINs could “disrupt the growing market for renewable natural gas generated by dairies and other producers” by lessening the value of renewable gas used directly for transportation.

More recently, Sens. Chuck Grassley (R-IA) and John Cornyn (R-TX) introduced a bill that would prevent the auto manufacturers from participating in the RFS and would direct the EPA to withdraw its proposed eRIN program. EMA supports the legislation and CLICK HERE for more information.