In the 1970s, President Richard Nixon faced an extensive energy crisis as fuel demand largely outpaced supply. This was the greatest energy challenge at the time, one in which the president tried to strike a balance between environmental and energy needs as well as national security goals (i.e., decreasing U.S. dependence on foreign oil). Nixon initiated several actions to not only improve environmental quality but also to spur research and development in alternative energy sources, specifically for power generation (i.e., wind turbines and solar). This sent a signal to private industry, encouraging capital investments that would expand domestic supplies of clean energy while letting consumers know that the cost of environmental protection would be reflected in retail prices.¹ The energy crisis of the 1970s was, in effect, the beginning of the United States’ transition away from fossil fuel-based energy toward renewable sources of energy.

The oil shortage also drove interest in biofuels, but federal policies would not come to fruition until the early 2000s. In 2007, President George W. Bush expressed concern about U.S. dependence on foreign oil and called on the nation to reduce gasoline usage by 20% by 2017.² The U.S. was again asked to participate in an energy transition, trying to strike a balance  between environmental and energy needs.

One way Bush proposed to maintain this balance was by enacting the Renewable Fuel Standard (RFS), a program that required large volumes of renewable fuels (i.e., ethanol and cellulosic biofuels) to be blended into the nation’s transportation fuels. This policy paved the way for the healthy biofuels market we see today and reduced greenhouse gas (GHG) emissions in the transportation sector.

And here we are again, in the midst of another energy transition, now moving towards low-carbon and zero-emission fuels – and with a second Donald J. Trump administration on the horizon, there is more speculation than ever surrounding the state of renewable fuels. Yet biofuels have garnered strong bipartisan support, with pledges from Republicans who consistently win big in farm-strong states that produce biofuels feedstocks like corn and soybeans, and Democrats who have pushed for lower carbon emissions coast to coast. The private sector is stepping up to signal the economic and environmental importance of renewable fuels. For instance, Veterans for Renewable Fuels (VRF) sent a letter to Vice President-elect JD Vance pointing out that one out of six ethanol industry workers is a veteran and underscoring its stance that “homegrown, low-cost, environmentally friendly” renewable fuels belong in America’s energy future.³

The popular RFS program will most likely be untouched under a second Trump administration,  continuing to help the U.S. reduce tailpipe emissions and increasing the biofuels industry’s share of the liquid fuels market. Under the RFS, regulated entities must meet a certain Renewable Volume Obligation (RVO) that is based on a percentage of their gasoline and diesel production and imports. These entities must either blend conventional biofuels (i.e., fuels made from corn and grain sorghum) and/or advanced biofuels (i.e., cellulosic feedstocks) or purchase Renewable Identification Numbers (RINs) from obligated parties that exceed their RVO requirements. The current RVO targets are set to expire in 2025, so the new administration will be responsible for setting targets for 2026 and beyond.

The incoming administration’s failure to address climate change at the federal level could be a catalyst for states to implement their own policies, such as clean fuels standards that reduce GHG emissions by decreasing the carbon intensity (CI) of transportation fuels. CI is calculated by measuring carbon emissions over a fuel’s complete life cycle. Fuels with CI scores below a mandated benchmark generate credits, which can be purchased by entities whose fuels have a high CI score.

The longest-running state program is California’s Low Carbon Fuel Standard (LCFS), which has displaced 320 million metric tons of carbon dioxide (CO2) since it was implemented in 2011.⁴ That is the equivalent of GHG emissions from 76,160,582 gasoline-powered cars driven for one year in the state.⁵ Recently, the California Air Resources Board (CARB), the agency governing the LCFS program, approved updates that aim to reduce the CI of California’s transportation fuels by 30% by 2030 and by 90% by 2045. Key amendments also include:

• Accelerating the CI targets for 2025 to 2030 by almost 9% annually. The new average CI target for 2030 is 69.40 gCO2e/MJ compared to the prior average CI of 79.55 gCO2e/MJ. 
• A 20% threshold on using biodiesel made from soybean oil, canola oil and sunflower oil to generate credits.
• Phasing out credits for methane captured at dairy farms over a 30-year period and eliminating credits for biofuels derived from palm oils. 
• Retiring credits at a rate of four times the difference in the producer’s CI score and the producer’s verified operational CI score, effective in the 2025 compliance year. 
• Credits for infrastructure to fuel zero-emission light-, medium- and heavy-duty vehicles. 

Oregon and Washington state have followed in California’s footsteps and implemented their own clean fuels standards, in 2016 and 2023, respectively. As these states use California’s program as a guide (or for lessons learned), they have proposed updates to their programs that are as follows:

• The Department of Environmental Quality’s (DEQ), the governing body of Oregon’s Clean Fuels Program (CFP), proposed amendments are mainly administrative but specifically focus on updating the Oregon Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (OR-GREET) model, calculations of GHG emissions, addressing issues associated with fuel pathway applications and approval requirements, and adjusting requirements for credits awarded to carbon capture and storage (CCS) projects, such that a reserve account will be created for any CCS projects that leak CO2 in the future. DEQ hosted a public hearing on November 19th to review public comments, and based on the input, could revise the proposal before sending the larger package to the DEQ’s Board for final approval in early January. The proposed amendments would most likely go into effect in 2026. 

• The Department of Ecology (Ecology), which governs Washington state’s program, has released proposed updates to the Clean Fuel Standard that would mandate third-party verification and allow for shared charging and refueling stations to qualify for credits. The next phase in Ecology’s rulemaking will most likely take place in Spring 2025.

New Mexico is also creating a clean fuels program that will likely draw on language from California, Oregon and Washington’s programs. New Mexico’s Clean Transportation Fuel Standard is scheduled to launch by July 1, 2026. There are rumors that Minnesota will introduce a bill to establish a clean fuels standard when its legislature convenes in January.

Irrespective of significant changes to the federal RFS program, the states are sending clear, long-term signals to the biofuels industry to make investments in production and technologies. As Nixon stated in 1971, 

“I am confident that the various elements of our society will be able to work together to meet our clean energy needs. And I am confident that we can therefore continue to know the blessing of both a high-energy civilization and a beautiful and healthy environment.”⁶ 

Join me next time as we explore ethanol-15 (E15), sustainable aviation fuel (SAF) and carbon capture and storage, among other technological advancements in the biofuels industry.

¹ https://www.presidency.ucsb.edu/documents/special-message-the-congress-energy-resources
² https://georgewbush-whitehouse.archives.gov/stateoftheunion/2007/initiatives/energy.html
³ https://d35t1syewk4d42.cloudfront.net/file/2896/VRF%20Letter%20to%20VPE%20Vance.pdf
⁴ https://ww2.arb.ca.gov/our-work/programs/low-carbon-fuel-standard/about
⁵ The EPA’s Greenhouse Gas Equivalencies Calculator is available at https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator#results
⁶ https://www.presidency.ucsb.edu/documents/special-message-the-congress-energy-resources