Sources have confirmed that Tesla Inc is seeking to enter the multi-billion dollar U.S. renewable credit market.
Tesla hopes to profit from the Biden administration’s march toward new zero-emission goals.
The electric car maker is one of at least eight companies with a pending application at the Environmental Protection Agency tied to power generation and renewable credits.
Tesla’s entry could potentially reshape the renewable credit market, established in the mid-2000s to boost investment in the U.S. biofuel industry.
The market generated some 18 billion credits in 2020 and is currently dominated by ethanol producers.
Tesla’s application would likely be tied to the production of electricity associated with biogas.
The Biden administration is expected to review the EPA applications and lay out how electric vehicles could qualify for tradable credits under the Renewable Fuel Standard (RFS) this summer, the sources said.
The move could represent the largest expansion of the RFS program that was created by President George W. Bush and aimed at boosting rural America and weaning the country off oil imports.
The entry of Tesla and other electric vehicle makers to the renewable energy scheme could attract investment for a much-needed infrastructure network, including charging stations, for electric vehicles.
However, it is likely to anger some in the U.S. refining industry who would need to buy the credits, known as RINs, generated by Tesla and other alternative fuel providers, essentially subsidizing an electric car company that seeks to put petrochemical refiners out of business.
Rural farmers could view Tesla’s entry as the Biden White House prioritizing electric vehicles over biofuels as an answer to the climate crisis.