[House Report 118-172]
[From the U.S. Government Publishing Office]


118th Congress }                                                {  Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                                { 118-172

======================================================================



 
               NO FUEL CREDITS FOR BATTERIES ACT OF 2023

                                _______
                                

 September 1, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mrs. Rodgers of Washington, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4469]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4469) to clarify that eRINs are not authorized 
for purposes of satisfying the volume of renewable fuel that 
needs to be contained in transportation fuel for purposes of 
the Renewable Fuel Program, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Committee Action.................................................     4
Committee Votes..................................................     4
Oversight Findings and Recommendations...........................     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     6
Statement of General Performance Goals and Objectives............     6
Duplication of Federal Programs..................................     6
Related Committee and Subcommittee Hearings......................     6
Committee Cost Estimate..........................................     7
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     8
Minority Views...................................................     9

                          PURPOSE AND SUMMARY

    The purpose of H.R. 4469 is to clarify that eRINs are not 
authorized for the purposes of satisfying the volume of 
renewable fuel that needs to be contained in transportation 
fuel for the purposes of the Renewable Fuel Standard program.

                  BACKGROUND AND NEED FOR LEGISLATION

    Congress created Clean Air Act (CAA) section 211(o)--also 
referred to as the Renewable Fuel Standard (RFS)--to reduce 
America's reliance on foreign sources (particularly sources 
located in politically unstable regions) to meet the United 
States' oil needs; build domestic energy and economic security; 
and provide value-added opportunities for communities that 
produce biofuel feedstocks.\1\ Enacted in 2005 and expanded in 
2007, the RFS requires the Administrator of the Environmental 
Protection Agency (EPA) to set renewable fuel volume 
obligations (RVOs) for refiners, blenders, or importers of 
transportation fuel sold or introduced into commerce in the 
United States. Under the statute, the RFS originally provided 
for nine billion gallons of total renewable fuel in 2008; but 
increased that amount to 36 billion gallons by 2022--all from 
liquid fuels.
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    \1\109 Cong. Rec. S9255 (2005) (Statement of Sen. Pete Domenici).
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    Compliance with the RFS, pursuant to CAA section 
211(o)(5)(B), is measured using credits--called Renewable 
Identification Numbers (RINs). CAA section 211(o)(5)(A) 
authorizes credits for persons that refine, blend, or import 
gasoline that is compliant with RFS requirements, for 
generating credits for biodiesel, and for generating credits by 
small refineries waiving their temporary exemption from the 
renewable fuel volume requirement. In practice, when qualifying 
biofuels are produced, each gallon is assigned a RIN--a number 
with digits corresponding to identifying data, including the 
year the RIN was generated, the producer of the fuel, and the 
type of fuel. Until the biofuels are sold as fuel or blended 
into conventional fuels, the RINs are ``attached'' to the fuel. 
Once the biofuel has been blended or sold, the RINs are 
detached, and can then be bought and sold like other 
commodities.
    Under the RFS, starting in 2023, EPA is authorized to 
``set'' the fuel standards among the differing statutory 
categories of renewable fuel for those RVO levels.
    On December 1, 2022, EPA announced a proposed rule to 
establish required RVO percentage standards for biofuels for 
2023, 2024, and 2025 under the RFS.\2\ Published in the Federal 
Register on December 30, 2022, the proposed rule also included 
regulatory changes to create a new program to outline how RINs 
from renewable electricity (eRINs) would be implemented and 
managed under the RFS program. This update to the RFS program 
would allow parties to register with EPA and generate eRINs 
produced from qualifying renewable biomass used as 
transportation fuel. On June 21, 2023, EPA announced a final 
rule to establish biofuel volume requirements and associated 
percentage standards for cellulosic biofuel, biomass-based 
diesel (BBD), advanced biofuel, and total renewable fuel for 
2023-2025.\3\ The final rule did not, however, contain an eRINs 
program.
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    \2\See ``Renewable Fuel Standard (RFS) Program: Standards for 2023-
2025 and Other Changes,'' Proposed Rule, December 30, 2022.
    \3\See ``Renewable Fuel Standard (RFS) Program: Standards for 2023-
2025 and Other Changes,'' Final Rule, July 12, 2023.
---------------------------------------------------------------------------
    The establishment and generation of eRIN credits was a 
controversial feature of EPA's proposed ``set'' regulation. 
When the RFS was first created in the Energy Policy Act of 
2005, the word ``electricity'' was absent from that section. 
Two years later in the Energy Independence and Security Act of 
2007 (EISA) the notion of generating electricity from renewable 
fuel to serve as a transportation fuel for America's vehicles 
was also not added to the CAA, including the RFS.
    EISA section 206, which included five sections that 
dramatically expand the RFS within CAA section 211(o), only 
authorized EPA (outside of the CAA) to ``conduct a study on the 
feasibility of issuing credits to electric vehicles powered by 
electricity produced from renewable energy sources'' and 
``issue a report that describes the results of that study, 
including a description of existing programs and studies on the 
use of renewable electricity'' to power electric vehicles. In 
addition, the report was required to describe ``alternatives 
for designing a pilot program to determine the feasibility'' 
and practicality of a program awarding RFS credits for 
``renewable electricity to power electric vehicles as an 
adjunct to the renewable fuels mandate.'' To this date, the EPA 
has not completed or complied with the statutory report 
requirements. In addition, EISA required a report on options 
for a pilot program but stopped short of authorizing one. Since 
then, Congress has not amended CAA section 211(o) to introduce 
electricity into the RFS.
    H.R. 4469 is necessary for four reasons.
    First, despite the lack of clear statutory authorization, 
EPA and others believe EPA has the authority to create this 
program. For instance, eRINs advocates point to report language 
from one or another congressional committee focusing on the 
creation of a fuel pathway as justification for eRINs authority 
even though creating a pathway, report language, or a joint 
explanatory statement is not binding in the same manner as 
statutory language.
    Second, while the final ``Set'' rule did not formalize the 
creation of an eRINS program, the rule and subsequent testimony 
by EPA on June 22, 2023, left open the possibility that EPA 
would return to creating an eRINs program in the future without 
going through another notice and public comment process.
    Third, the proposed design of the eRINs program would 
insert significant uncertainty into the transportation fuels 
market. Under EPA's proposal, original equipment manufacturers 
(OEMs) of electric vehicles would generate RINs for light-duty 
vehicles and then be responsible for ``establishing contracts 
with parties that produce electricity from qualifying biogas.'' 
In addition to serving as a direct subsidy for electric 
vehicles, such a delegation of RIN generation authority would 
directly contradict the Clean Air Act, which specifically 
grants RIN generation authority to ``any person that refines, 
blends, or imports gasoline that contains a quantity of 
renewable fuel greater than the quantity required.'' Therefore, 
the proposed structure from EPA would undermine the existing 
RIN market.
    Last, the eRINs program was designed in a way that would 
destabilize the use of liquid fuels and the vehicles that use 
them in the United States as well as threaten the availability 
of reliable and affordable transportation fuel options for cars 
driven by the majority of Americans. Congress never delegated 
authority this sweeping to EPA, and this legislation makes that 
clear.

                            COMMITTEE ACTION

    On June 22, 2023, the Subcommittee on Environment, 
Manufacturing, and Critical Materials held a hearing on a 
discussion draft titled ``No Fuel Credits for Batteries Act of 
2023,'' which was subsequently introduced as H.R. 4469. The 
title of the hearing was ``Driving Affordability: Preserving 
People's Freedom to Buy Affordable Vehicles and Fuel.'' The 
Subcommittee received testimony from:
           Joseph Goffman, Principal Deputy 
        Administrator, Office of Air and Radiation, U.S. 
        Environmental Protection Agency;
           Chet Thompson, President and CEO, American 
        Fuel and Petrochemical Manufacturers;
           Neil Caskey, CEO, National Corn Growers 
        Association;
           Scott Lambert, President, Minnesota Auto 
        Dealers Association; and
           Genevieve Cullen, President, Electric Drive 
        Transportation Association.
    On July 12, 2023, the Subcommittee on Environment, 
Manufacturing, and Critical Materials met in open markup 
session and forwarded H.R. 4469, without amendment, to the full 
Committee by a record vote of 12 yeas and 7 nays.
    On July 27, 2023, the full Committee on Energy and Commerce 
met in open markup session and ordered H.R. 4469, without 
amendment, favorably reported to the House by a record vote of 
26 yeas and 22 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:


                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

              NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
                          AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 4469 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, at the time this 
report was filed, the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to clarify 
that eRINs are not authorized for the purposes of satisfying 
the volume of renewable fuel that needs to be contained in 
transportation fuel for the purposes of the Renewable Fuel 
Standard program.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 4469 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

              RELATED COMMITTEE AND SUBCOMMITTEE HEARINGS

    Pursuant to clause 3(c)(6) of rule XIII, the following 
related hearing was used to develop or consider H.R. 4469:
           On June 22, 2023, the Subcommittee on 
        Environment, Manufacturing, and Critical Materials held 
        a hearing titled ``Driving Affordability: Preserving 
        People's Freedom to Buy Affordable Vehicles and Fuel.'' 
        The Subcommittee received testimony from:
                   Joseph Goffman, Principal Deputy 
                Administrator, Office of Air and Radiation, 
                U.S. Environmental Protection Agency;
                   Chet Thompson, President and 
                CEO, American Fuel and Petrochemical 
                Manufacturers;
                   Neil Caskey, CEO, National Corn 
                Growers Association;
                   Scott Lambert, President, 
                Minnesota Auto Dealers Association; and,
                   Genevieve Cullen, President, 
                Electric Drive Transportation Association.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974. At the time this report was 
filed, the estimate was not available.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 4469 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 of H.R. 4469 contains the short title of the ``No 
Fuel Credits for Batteries Act of 2023.''

Section 2. Clarification the ERINS not authorized

    Section 2 of H.R. 4469 contains two parts: (1) the 
clarification that there is no authority under the CAA to 
authorize the generation of credits or RINs for electricity as 
a transportation fuel; and (2) the definitions used in the 
legislation.
    Section 2(a)(1) prohibits the Administrator of the EPA from 
authorizing the generation of credits for electricity generated 
from renewable fuel for the purposes of satisfying the volume 
of renewable fuel that needs to be contained in transportation 
fuel for the purposes of the RFS program--CAA section 
211(o)(2). While the Committee understands that eRINs have 
never been generated for transportation fuel and acts of 
Congress generally add to or subtract from something in the 
law, the Committee believes the declaratory statement in 
section 2(a)(1)--which is intentionally drafted outside of the 
RFS to avoid the appearance that legal authority is being 
removed--is essential both to remind EPA as well as put it on 
notice as to its actual statutory authority.
    Given that EPA has expressed a willingness to revisit 
regulations creating eRINs, and RIN credits are able to satisfy 
obligations for the current compliance year or the following 
compliance year, section 2(a)(2) prohibits the use or transfer 
of any eRINs credits generated before the date of enactment. 
The Committee intends this provision to address any gap between 
a future EPA eRINs proposal and the date of enactment of H.R. 
4469.
    Section 2(b) defines ``renewable fuel'' and 
``transportation fuel'' using their RFS meanings contained in 
CAA section 211(o)(1).
    H.R. 4469 reiterates Congress' intent to authorize the 
generation of RINs under CAA section 211(o) for transportation 
fuel containing liquid fuels only, and not to authorize the 
generation of RINs for electricity from renewable resources.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                             MINORITY VIEWS

    We oppose H.R. 4469, legislation that would prevent the 
Environmental Protection Agency (EPA) from allowing the 
generation of credits for renewable electricity for 
transportation fuel (eRINs) under the Renewable Fuel Standard 
(RFS). H.R. 4469 turns a blind eye to years of regulatory and 
Congressional direction to EPA in support of generating eRINs 
and hamstrings opportunities for using renewable electricity in 
the transportation sector.

                               BACKGROUND

    Congress established the RFS to reduce greenhouse gas (GHG) 
pollution and expand the nation's supply of renewable fuels 
while also reducing reliance on imported oil. The RFS has 
spurred significant market growth for renewable fuels, 
providing strong economic opportunity across the biofuels 
sector.
    While the Majority's report details the history of the RFS, 
it fails to acknowledge the decade-plus history of EPA 
regulatory action regarding renewable electricity and the RFS. 
There has been over a decade of regulatory action regarding an 
eRIN program at EPA. Starting in 2010, EPA finalized a rule to 
allow renewable electricity to count as a renewable fuel under 
the RFS, as long as it was made from renewable biomass, and it 
was used as a transportation fuel.\1\ In 2014, EPA approved a 
pathway for eRIN generation from biogas. While the pathways 
were approved, EPA had yet to put in place a mechanism for eRIN 
generation.\2\ In 2016, EPA proposed the ``Renewable 
Enhancement and Growth Support Rule,'' which requested comment 
from stakeholders on how EPA should structure its eRIN 
generating mechanism.\3\ At the end of 2022, EPA put out a 
proposed rule with a detailed compliance mechanism structure 
for eRINs.\4\ During a Subcommittee on Environment, 
Manufacturing, and Critical Materials legislative hearing, EPA 
testified that the eRIN proposal received such extensive 
feedback that the Agency chose to further engage with 
stakeholders before finalizing.\5\
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    \1\Environmental Protection Agency, Regulation of Fuels and Fuel 
Additives: Changes to Renewable Fuel Standard, 75 Fed. Reg. 14669 (Mar. 
26, 2010) (final rule).
    \2\Environmental Protection Agency, Regulation of Fuels and Fuel 
Additives: RFS Pathways II, and Technical Amendments to the RFS 
Standards and E15 Mis-fueling Mitigation Requirements, 79 Fed. Reg. 
42127 (July 18, 2014) (final rule).
    \3\Environmental Protection Agency, Renewables Enhancement and 
Growth Support Rule, 81 Fed. Reg. 80828 (Nov. 16, 2016) (proposed 
rule).
    \4\Environmental Protection Agency, Renewable Fuel Standard (RFS) 
Program: Standards for 2023-2025 and Other Changes, 87 Fed. Reg. 80754 
(Dec. 30, 2022) (proposed rule).
    \5\House Committee on Energy and Commerce, Testimony of Joseph 
Goffman, Principal Deputy Assistant Administrator, Office of Air and 
Radiation, U.S. Environmental Protection Agency, Hearing on Driving 
Affordability: Preserving People's Freedom to Buy Affordable Vehicles 
and Fuel, 118th Cong. (June 22, 2023).
---------------------------------------------------------------------------
    Furthermore, the Majority asserts that the definition of 
transportation fuel under the Clean Air Act (CAA) Section 
211(o)(1) is for transportation fuel containing only liquid 
fuels. However, nowhere in the CAA does it specify that a 
transportation fuel must be a liquid fuel, which EPA confirmed 
at the Subcommittee on Environment, Manufacturing, and Critical 
Materials hearing.\6\ Therefore, renewable electricity captured 
from biogas to power an electric vehicle would constitute a 
transportation fuel under the CAA. The Majority claims to be 
for an ``all of the above'' energy approach, yet H.R. 4469 
picks winners and losers in the renewable fuels market, and is 
a deliberate attack on renewable electricity, simply because 
the Majority is opposed to EVs.
---------------------------------------------------------------------------
    \6\House Committee on Energy and Commerce, Hearing on Driving 
Affordability: Preserving People's Freedom to Buy Affordable Vehicles 
and Fuel, 118th Cong. (June 22, 2023).
---------------------------------------------------------------------------
    At the Subcommittee legislative hearing, and during 
Committee consideration of H.R. 4469, Subcommittee Ranking 
Member Tonko explained the hypocrisy in the Majority's 
opposition to eRINs. Currently, the RFS rewards biogas that is 
turned into renewable natural gas to fuel a natural gas-powered 
vehicle. There is no reason why the RFS program should not 
offer the same support for biogas to power an electric vehicle 
(EV). Provided that a fuel source meets the definition of an 
eligible feedstock, the source should be able to benefit from 
the RFS, regardless of the type of vehicle they power. H.R. 
4469 cuts off an entire class of stakeholders, including 
farmers, municipalities, and landfill operators, from the same 
economic and market opportunities granted to liquid renewable 
fuel producers. Electricity is an increasingly expanding 
portion of our renewable fuel supply and eRINs are an important 
component of supporting vehicle electrification and reducing 
harmful GHG emissions. eRINs help accomplish the end goal of 
the RFS program of reducing GHG emissions and increasing 
national security with home-grown fuels.
    EPA has the authority to allow fuels produced from eligible 
feedstocks to generate renewable electricity to participate in 
the RFS. In addition to over a decade of regulatory action 
outlined above, Congress has explicitly directed EPA to 
continue working on eRINs, appropriating funds for EPA to 
process applications for the electric pathway under the RFS in 
2020, which H.R. 4469 blatantly ignores.

                          SUMMARY OF H.R. 4468

    Section 2 of H.R. 4469 blocks EPA from allowing the 
generation of credits for renewable electricity for 
transportation fuel under the RFS, despite two pathways already 
being approved. H.R. 4469 limits the availability of fuel 
captured from biogas from landfills, municipal wastewater 
treatment facility digesters, agricultural digesters, and 
separated municipal solid waste digesters.

                               CONCLUSION

    Contrary to Republican claims, the eRIN program would not 
destabilize the use of renewable liquid fuels and the vehicles 
that operate with liquid fuels. Forming an eRIN program would 
merely put renewable electricity on an even playing field with 
the other transportation fuels under the RFS, providing the 
renewable electricity stakeholders the same economic benefits 
granted to renewable liquid fuel producers. Expanding 
opportunities under the RFS for renewable electricity will 
further our environmental and public health goals.
    For the reasons stated above, we dissent from the views 
contained in the Committee Report.
                                        Frank Pallone, Jr.,
                  Ranking Member, Committee on Energy and Commerce.