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Biden Seeks to Electrify Auto Industry
By Chris Clayton
Thursday, August 5, 2021 10:04AM CDT

OMAHA (DTN) -- President Joe Biden on Thursday is moving ahead aggressively with his administration's push to ratchet down greenhouse-gas emissions through electric vehicles.

The president will sign an executive order to make half of all new vehicles sold in 2030 "zero-emission" vehicles, including battery, fuel-cell and plug-in hybrid electric vehicles. The executive order also will set new long-term fuel-efficiency and emission standards "to save consumers money, cut pollution, boost public health, advance environmental justice and tackle the climate crisis."

The move by the administration will keep a spotlight on how EPA, USDA and other federal agencies treat biofuels going forward. The administration has continued to delay releasing annual rules for obligated refinery blend volumes under the Renewable Fuels Standard. EPA has not yet responded as to how the administration will deal with a federal appeals court rejecting the Trump-era year-round E15 rule either.

Ethanol is a key component in U.S. corn usage, taking up 5.2 billion bushels (bb) of corn annually, or about 35% of projected corn use.

The Renewable Fuels Association last week sent a letter to President Biden highlighting their commitment to ensure ethanol would reduce emissions by at least 70% compared to gasoline by 2030. The letter also stated the ethanol industry would move to "net-zero lifecycle emissions" by 2050. The ethanol industry has continued to stress that the U.S. will continue to have tens of millions of vehicles on the road that will still rely on liquid fuel for decades to come.

Geoff Cooper, president and CEO of RFA, said Thursday the group agrees aggressive action is needed to lower greenhouse-gas emissions (GHG) from transportation. But that also requires taking an "all-of-the-above approach" and using all available low-carbon technologies, Cooper said.

"The overarching goal should be to reach net-zero emissions as quickly as possible without dictating the pathway to get there or putting all of our eggs into one technology basket," he said. "We believe any plan to decarbonize the transportation sector should recognize the massive opportunity for low-carbon liquid fuels like ethanol to reduce GHG emissions from internal combustion engines in the near term."

The moves come as the U.S. Senate is taking up an infrastructure bill that would include at least $7.5 billion to help pay for electric charging stations nationally. The bill has few mentions regarding biofuels, which raised concerns from at least some supporters of biofuels in Congress. Rep. Cindy Axne, D-Iowa, called the lack of biofuel investments in the Senate bill "unacceptable." Axne said of the deal that she and others have been advocating for more focus on biofuels, which already have significantly lower emissions than gasoline.

"While I am withholding my final decision on this agreement until there is a bill I can read, I will have strong reservations about supporting the final bill if there is no pathway for critical investments in our biofuels sector," Axne said.

According to the White House, automakers are committing to reach a goal of selling 40% to 50% of their vehicles as electric automobiles by 2030. The White House pitched the announcement as a way to "leverage once-in-a-generation investments" in infrastructure and "whole-of-government effort" to boost domestic auto manufacturing and jobs. The target of 2030 was set to provide time for the auto companies to reshape their manufacturing facilities "without stranding assets" and lean on the expansion that will come in infrastructure as well.

In 2019 -- pre-pandemic -- Americans bought more than 17 million new vehicles. If the 2030 goals were reached, that would put electric vehicle sales at 6.8 million to 8.5 million vehicles. RFA's Cooper pointed out that means "four out of five cars on the road that year will still have internal combustion engines that require liquid fuels. Renewable fuels like ethanol offer a solution that is available right here, right now at a low cost to jump-start decarbonization efforts."

EPA and the Department of Transportation will also propose new emission requirements and fuel-efficiency standards for cars, pickups and SUVs. These new requirements will reverse more relaxed standards set by the Trump administration and go farther than those proposed under the Obama administration.

Auto manufacturers Ford, General Motors and Stellantis (Chrysler-Dodge) released a joint statement on a "shared aspiration" to achieve 40% to 50% auto sales from electric technologies by 2030, "in order to move the nation closer to a zero-emissions future consistent with Paris climate goals." The companies stated recent investments in technology, research and development will lead to a transition to electric automobiles. Still, a dramatic shift in the U.S. "can be achieved only with the timely deployment of the full suite of electrification policies committed to by the administration," which includes incentives for consumers to buy those vehicles and a network of charging stations to support millions of vehicles, the companies stated.

United Auto Workers issued a separate statement supporting electric vehicles and the manufacturing of electric battlers, but also called on Congress to pass the Protecting the Right to Organize Act, the "Pro Act," which would make it easier for unions to organize. BMW, Honda, Ford, Volkswagen and Volvo also released a statement championing the agreement they signed with California to reduce greenhouse-gas emissions from vehicles.

The White House said EPA and the Transportation Department standards would reduce the use of gasoline by 200 billion gallons and reduce carbon emissions by 2 billion metric tons. The White House stated the tighter emissions rules would save consumers about $900 in fuel costs over the life of a vehicle.

The White House stated the global market is shifting to electric vehicles. While the U.S. pioneered the technology, the U.S. market share of electric vehicles is only about one-third of the Chinese electric vehicle market. Biden "believes it is time for the U.S. to lead in electric vehicle manufacturing, infrastructure and innovation."

The White House emphasized the drive for electric vehicles would boost U.S. manufacturing of those automobiles and "create good-paying union jobs" as well as lead to U.S. exports of electric vehicles globally.

A key for the president is lowering U.S. emissions economywide. The auto announcements -- if successful -- would reduce emissions from new vehicles by 60% in 2030 compared to vehicles sold last year.

The White House pointed to plans in the infrastructure package being debated in the U.S. Senate to install a national network of electric charging stations, as well increasing consumer incentives to buy electric vehicles made in the U.S.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN


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