After spending Trump years fighting Big Oil, biofuels industry rallies against electric car mandates under Biden

Source: By Abby Smith, Washington Examiner • Posted: Wednesday, December 9, 2020

Farmers are planning a big offensive to tout ethanol and other biofuels as clean to ensure the Biden administration treats those products the same as electric cars and other low-carbon fuels.

It’s a new fight for the agriculture sector, which sees biofuels as a vital piece of its revenue stream. For the last four years, biofuels producers have vigorously fought attempts by oil refiners and some Trump officials to water down federal requirements to blend biofuels into the fuel supply, known as the Renewable Fuel Standard.

President Trump often flip-flopped politically on the RFS, stuck in the middle of trying to appease two typically deep-red constituencies: farmers and the oil industry.

Under the next administration, however, biofuels producers will be fighting for equal treatment as President-elect Joe Biden seeks deep greenhouse gas emissions cuts from all sectors of the economy, including agriculture and transportation. Instead of battling the oil industry, biofuels producers will be countering arguments from some Democrats and environmental activists who argue the United States should bar sales of new cars and trucks that aren’t electric if the country wants to meet global climate targets.

Policies mandating electric car sales would crush biofuel consumption, which need steady liquid fuel demand to survive. For example, if the U.S. took California’s recently announced directive requiring only zero-emissions car sales by 2035 nationwide, essentially banning new gas-powered car sales, ethanol consumption would fall 90% and biodiesel consumption by 61% by 2050, according to an October study from the Agricultural Retailers Association.

“We think those are artificially imposed deadlines,” said Richard Gupton, the association’s senior vice president for public policy and counsel. He said that currently, electric vehicle policies, including federal tax incentives, largely benefit wealthier individuals and only a handful of states.

Damage to the biofuels industry would translate to a hit to the rural economy. Biofuels facilities create jobs in rural regions of the country and increase the demand for American-grown crops, said Andrew Wambly, congressional relations director at the American Farm Bureau Federation. He added that roughly 40% of U.S. corn supply is driven through an ethanol plant.

The Agricultural Retailers Association found under a 2035 zero-emissions vehicle sales mandate, U.S. net farm income would take a $27 billion hit in 2050.

Gupton argues biofuels can help Biden meet his climate goals. For example, he said expanding use of higher-blend ethanol fuels, such as E15 and E85, can reduce emissions. More broadly, biofuels producers and trade groups are touting their product as a lower-carbon option, outlining steps Biden could take in his first few months to help boost biofuels production and consumption.

They stress that using more biofuels in the U.S. fuel supply would cut carbon emissions from the transportation sector in the immediate term, whereas a transition to all-electric cars could take many years.

“While a zero-carbon future is ideal, it’s also a long way off,” reads a report released Monday by America’s Fuel, a project of biofuels producer POET. “Even after every car sold is zero-emission, it will still be a decade before 70% of vehicles on the road are electric and 15 years before that number reaches 90%.”

The report, which promotes increased adoption of E15, said if the U.S. moved from E10 to E15, it would reduce greenhouse gas emissions equivalent to taking 3.85 million cars off the road each year.

Biden, however, will face competing pressures once in the White House. Many environmental groups outright oppose biofuels, questioning whether they reduce emissions.

Liberal environmental activists are already pushing rapid electrification as the predominant means to slash transportation sector emissions, and a handful of Democratic lawmakers have proposed legislation to make California’s 100% zero-emissions vehicle sales mandate national.

Biden, for his part, has promised to boost electric cars significantly as part of his climate agenda. So far, though, he has largely supported expanding electric vehicle subsidies and increasing funding to build out public charging stations, and he hasn’t lent support directly to zero-emission vehicle sales mandates such as California’s directive.

But because biofuels policies have never fallen along party lines, there is also a significant group of Midwest Democrats that strongly back biofuels. Biden’s pick for agriculture secretary, Tom Vilsack, is a former Iowa governor who led the department under the Obama administration and stumped for Biden in Iowa during the campaign, arguing Biden would offer a more stable future for the biofuels sector.

Biden is likely to take at least some of the steps biofuels producers are seeking to boost the industry. For example, during the campaign, Biden slammed Trump for granting waivers to small oil refineries exempting them from the requirements of the RFS, saying his administration will keep its promises to farmers “by ushering in a new era of biofuels” and signaling it is likely to take a tougher stance on such waivers.

Overall, biofuels groups are hoping they can convince Biden and his team to support emissions reduction policies that are fuel-neutral. Geoff Cooper, president and CEO of the Renewable Fuels Association, said he’s been getting positive signals from the Biden transition team so far.

“The sense we’ve been getting is that they are looking at these issues in a holistic manner and do seem to understand that there’s going to be a role long term for liquid fuels and definitely a role for biofuels in helping to decarbonize those liquid fuels long term,” he said.

Engaging with the Biden team on policies to curb emissions, too, could give biofuels producers the upper hand in their conflict with the oil industry.

“Refiners are probably getting nervous about how their product, petroleum, fits into a low-carbon future,” Cooper said. “That’s exactly why they should be coming to the table and working with biofuel producers on what is the optimal solution in terms of liquid fuels and what is the lowest carbon liquid fuel that we can put on the market.”