Will eRINs Make Teslas Cheaper?

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Can electric vehicles benefit from the US Renewable Fuel Standard (RFS) scheme? Reuters reports that it is highly likely that they can. It appears that the Biden administration has been working with Tesla’s representatives to include EVs and charging stations in the scheme.

The RFS mandates that fuel sold in the US has to contain a minimum volume of renewable fuels — since 2005, that has mainly been corn-based ethanol. It appears that consideration is now being given to EV makers to allow them to generate electric Renewable Identification Numbers — eRINs (not to be confused with Karens).

“Tesla is seeking changes to the RFS that will allow it to earn renewable fuel credits [eRINs] based on kilowatt hours driven or similar metrics, according to two sources familiar with the plan,” Reuters reports.

“The administration’s early and extensive outreach reflects that expanding the scope of the U.S. Renewable Fuel Standard (RFS) to make it a tool for electrifying the nation’s automobile fleet is one of Biden’s priorities in the fight against climate change.”

The corn and oil lobbies are already at odds over the RFS. Adding the car lobby into the mix will only make matters more contentious. But has the time come? If corn ethanol has been getting subsidies, despite not really being deserving of them, shouldn’t much cleaner and greener electric cars?

“We have heard through the grapevine that car companies are really, really going to like this rule,” said Maureen Walsh, director of federal policy with the American Biogas Council, speaking at a conference in May. Perhaps it will help legacy automakers to transition to electric vehicles more easily without going bankrupt.

As transport accounts for 25% of US greenhouse gas emission, the eRIN could be a mechanism to reduce the cost of an EV and thus speed up the transition to decarbonization of the sector.

“The EPA said it was consulting ‘all interested stakeholders’ in its RFS policy review,” Reuters reports. The proposal is expected to hit the desk of the president of the United States, Joe Biden, by the end of the month. Stay tuned for more news on this soon.

Any action that will enable more people to get into an electric car is worth pursuing. Watch this space.

Note that this is not related to the Inflation Reduction Act of 2022 and the various consumer electric vehicle incentives and battery production subsidies that exist in that legislation.