Let’s update US fuel policy to promote electric vehicles (Part II)

Posted Tuesday, 8 July 2014, 15:40

We’ve argued elsewhere (see here and here) that the U.S. should take steps to include renewable electricity for electric vehicles under the Renewable Fuel Standard (RFS). Last week, EPA took a small but constructive step in this direction to promote electric vehicles by providing a clearer regulatory path to deliver more renewable electricity to electric vehicle users. EPA finalized a new pathway for biogas electricity used in electric vehicles, a step that could potentially open up new avenues to incentivizing more types of low carbon fuels in transportation.

The new pathway is for biogas produced from a handful of mostly cellulosic sources that deliver very high carbon savings, including gas from landfills and agricultural digesters. The biogas can be processed into natural gas or combusted to generate electricity; if this electricity is used in electric vehicles, it can be counted towards the cellulosic mandate in the RFS.

This is one of the cleanest transportation fuel pathways under the RFS for two reasons: (1) biogas is a waste product, and its use does not compete for food or other resources and prevents the release of climate-warming methane to the atmosphere; and (2) electric vehicles have a more efficient—3–4 times more efficient, in fact—drivetrain than vehicles with internal combustion engines, driving more miles on the same amount of energy compared to regular cars. EPA took account of this higher efficiency in the new rule, and found that doing so increased the calculated carbon savings of this pathway from 87% to 96% compared to fossil fuels.

This rule could serve as a precedent for additional RFS pathways for renewable electricity in the future. Why is this a good idea? Electric vehicles offer high potential for decarbonization of the transport sector both from increased drivetrain efficiency and because they can utilize energy from a broad array of renewable sources. This is important because liquid biofuels can only take us so far in displacing oil. A reasonable back-of-the-envelope estimate (based on related research we’ve published here) would be that that only about 10%–15% of global transport energy demand can be met with sustainable biofuels in 2050. There is much greater potential in the long term for renewable electricity generation from wind, solar, geothermal, and other sources; these clean energy sources could reduce the carbon intensity and oil dependency of vehicles more than can be achieved with biomass alone.

These benefits could be reaped under the RFS if further steps are taken to widen pathways for electricity. The current requirements to count electricity towards the RFS are cumbersome and restricted to isolated non-commercial grids unless electricity providers can obtain an uncertain approval from the EPA administrator, thus disincentivizing the participation of large-scale utility companies. This unnecessarily restricts these pathways to private electricity providers not connected to the grid, who have simpler reporting requirements. Relaxing these requirements could incentivize large-scale commercial electricity providers to invest more in renewables and electric vehicle charging infrastructure, and encourage greater usage of the infrastructure. At a broader level, the RFS could potentially be widened to include non-biogenic renewable energy sources. After all, providing incentives for the use of solar and wind electric power installations are valid low-carbon, renewable energy sources too. Including such renewable sources would strongly support the RFS goals to promote low carbon fuels as well as energy security, and would require approval from Congress.

These are only a few of an array of potential avenues to build upon last week’s rule with greater opportunities for promoting electricity use in the RFS. We’re finding that it is increasingly important that governments use a medley of incentives and other actions targeted at automakers, consumers, and energy providers to help promote electric vehicle sales and use. Continuing to use incentives for electricity providers as part of our fuel policy could become an important part of the puzzle.