The Biden administration has dropped a proposed plan that would have given credits to automakers, including Tesla, for using renewable natural gas to power electric vehicles (EVs). The proposed regulation, which sets biofuel-blending quotas for the next three years, is undergoing final review at the White House and the proposal was excluded from it, according to anonymous sources.

EV Manufacturers Would Have Been Able to Claim New Credits

Under the EV initiative, automakers would have been incorporated into the Renewable Fuel Standard that mandates refiners to blend biofuels into gasoline and diesel. They would then have been able to claim new credits in exchange for using electricity generated from natural gas harvested from landfills or farms. However, the Environmental Protection Agency (EPA) officials expressed concerns that they would not be able to finalize details of the complex EV initiative in time to meet a court-ordered June 14 deadline.

Lobbying and Opposition

Tesla, Rivian Automotive Inc. and the Zero Emissions Transportation Association lobbied the EPA in favor of the proposal, stating it would support President Joe Biden’s decarbonization goals. However, opposition came from refiners, renewable fuel producers and some lawmakers who challenged its compliance with federal law.

EV Initiative Would Have Provided Federal Support for Zero-Emission Vehicles

The EV initiative would have added another layer of federal support for zero-emission vehicles, following tax credits expanded in the previous year’s climate law and proposed limits on tailpipe pollution. Automakers would have received tradeable credits known as “renewable identification numbers” (RINs) in exchange for using renewable sources as fuel to power EVs.

Opposition from Fuel Refiners and Infrastructure Owners

Owners of truck stops and charging stations raised concerns that the initiative would further increase EV production without driving investment in charging infrastructure and biogas-to-electricity projects. Fuel refiners have also argued that the EPA was not authorized by Congress to create a new biofuel credit linked to electricity.