January 4, 2023

In Brief: Biden’s ‘Renewable’ Wealth Transfer

EPA finds a convoluted way to expand ethanol subsidies to boost EVs.

Joe Biden and his leftist pals have made no bones about their desire to use the crushing weight of government to dictate results in the market. In few places is this as evident as in the ethanol mandate and push for EVs. Biden is now combining those goals, says the editorial board of The Wall Street Journal, in an income redistribution scheme for the ages.

Tesla’s stock market value has plunged by some $850 billion this year amid investor worries over Elon Musk’s Twitter takeover and slumping demand for its electric vehicles. But lo, the Biden Administration is coming to Mr. Musk’s aid with a new plan to use the renewable fuel program in a way that subsidizes Teslas and other already subsidized EVs.

Congress’s ethanol mandate offers a case study in the political difficulty of weaning industries off government support — and how regulators can revamp programs to serve new political ends. Politicians of both parties rallied around the renewable fuel standard (RFS) in 2005 as a way to boost U.S. energy independence and reduce CO2 emissions. It has done the opposite.

The Journal recaps the RFS mandates for biofuel blending, which is problematic in and of itself and is therefore compounded by the quantities demanded by the central planners. Refiners have either bought expensive “credits” in order to continue producing a usable product (at a higher cost), or they’ve gone under. The Journal says, “A refining shortage, especially on the East Coast, is a major reason prices for gasoline and diesel shot up early in the summer far more than for crude.”

The Biden EPA’s back-door EV subsidy will compound these problems. EPA is proposing to increase the overall RFS to 22.68 billion gallons in 2025 from 20.63 billion this year. The cellulosic ethanol component — which EPA in the past has repeatedly revised down because production has fallen far short of its ethereal mandates — will climb to 2.13 billion gallons from 630 million.

Here’s the kicker: Refiners will be allowed and by necessity required to comply with these mandates by buying “eRINs” credits from EV manufacturers. “While the production of liquid cellulosic biofuel has remained limited in recent years,” EPA says, “the inclusion of eRINs into the program affords another opportunity for dramatic growth of cellulosic biofuel.”

Not really. The proposal is one more way to boost EV margins at the likes of Tesla, which lobbied for inclusion in the RFS. As EPA explains, the new eRINs credits will “incentivize activities that can increase electrification of the fleet, which could include lowering the cost of EVs and/or increasing the availably [sic] of public access charging infrastructure.”

The details of the scheme would win a Rube Goldberg award.

The Journal summarizes some of those details, including, believe it or not, algorithms that take into account landfills and dairy farms, before concluding:

Tesla is expected to be the program’s biggest beneficiary because it has the most EVs on the road.

The more EVs that auto makers sell, the more credits they will generate. Meantime, the Administration’s rising fuel economy mandates will make it harder for refiners to comply with the increasing renewable-fuel mandates. That means refiners will have to buy more eRINs and will pass on the costs via higher gas prices.

In sum, the Administration is proposing another huge wealth transfer from folks who drive gas-powered cars to Tesla and other makers of electric vehicles.

Wall Street Journal subscribers can read the whole thing here.

Start a conversation using these share links:

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!

The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)


“Our cause is noble; it is the cause of mankind!” —George Washington

Join us in prayer for our nation, that good and righteous leaders would rise and prevail, and that division would be healed so we can be united as Americans. We pray also for the protection of our Military Patriots, Veterans and First Responders, and for their families.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2023 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.