Motor Fuel Retailers Want EPA to Modify Proposed Rule

Focus on biofuels, not more EV production, associations say
EV charger
Photograph: Shutterstock

The retail motor fuel industry is voicing a growing concern about inadequate EV charging infrastructure in the face of ongoing announcements from manufacturers, politicians and some energy companies about the arrival of electric vehicles and their role in reducing the carbon footprint.

The number of public chargers in place today lags behind EV production to such an extent, the issue could lead to EV failure, according to industry associations calling on the U.S. Environmental Protection Agency to modify its current Renewable Fuel Standard Rule to address the challenges fuel stations and convenience stores face.

In public comments submitted Feb. 10 to the EPA about its Renewable Fuel Standard Rule for 2023, 2024 and 2025, which was announced Dec. 1, 2022, the three associationsthe National Association of Convenience Stores (NACS), the National Association of Truck Stop Operators (NATSO) and the Society of Independent Gasoline Marketers of America (SIGMA)said the agency’s Proposed Rule represents a “missed opportunity” to encourage investment in the most environmentally attractive alternative fuel technologies.

The three industry associations represent 90% of retail motor fuel sales in the U.S., they said. Instead of focusing on more incentives for electric vehicle production, they are encouraging the EPA to increase the use of advanced biofuels by at least 250 gallons per year and allow owners of public charging stations to generate electric Renewable Identification Numbers (RINs) instead of automakers.

With 69% of convenience-store consumers saying price is the determining factor in where they purchase gas, according to a 2022 NACS survey, it’s important to make lower-carbon fuels less expensive than those creating more environmental impact. This is the idea behind the Renewable Fuel Standard, which creates an incentive for fuel marketers to blend renewable fuel with petroleum-based fuels.

Retailers pass on the cost savings to consumers to stay competitive. The associations believe more robust mandates would lower the carbon footprint for transportation fuel.

The associations want the EPA to increase the mandate for advanced biofuels by 250 million to 350 million gallons per year, not 100 million gallons as the agency produced. 

The associations said the Renewable Fuel Standard has encouraged the retail fuel industry to invest over $1 billion in alternative fuels. “If structured appropriately, it could be just as effective in prompting investment in EV charging stations,” the associations said. But allowing only automakers to generate eRINs won’t result in necessary investments for charging infrastructure.

Toyota Motor Corp.’s incoming chief executive Koji Sato, who is expected to take the helm from current CEO Akio Toyoda in April, said the company will develop new luxury EVs for its Lexus brand by 2026 and adopt an EV-first mindset, The Wall Street Journal reported Tuesday.

The current electric RIN structure erroneously assumes the price of electric vehicles is the main obstacle to adoption, and creating a new revenue stream for the automakers will result in lower EV prices, the associations said. But price isn’t the stumbling block. Toyota Motor Corp.’s incoming chief executive Koji Sato, who is expected to take the helm from current CEO Akio Toyoda in April, said the company will develop new luxury EVs for its Lexus brand by 2026 and adopt an EV-first mindset, the Journal reported Tuesday.

The real issue the electric vehicle market is contending with is how to install a sufficient number of chargers to keep up with new EV sales, the associations said. The price of EVs has fallen, due in part to tax credits on the federal, state and local level totaling $10,000 or more per vehicle, but it hasn’t yet spurred new investment in charging stations, causing so-called “range anxiety” for EV drivers.

The best way to overcome the problem of “range anxiety” is to offer EV charging at fuel retailing locations consumers are accustomed to, the associations said.

“In fact, a lack of a convenient, publicly accessible network of charging stations is a greater impediment to EV uptake than vehicle price,” they said. “The availability of EV charging stations at existing retail fuel outlets is the most effective way to overcome EV consumers’ refueling concerns.”

The associations cited 2022 data from the U.S. Department of Energy’s Alternative Fuels Data Center indicating while EV sales increased 65% nationally, while EV charging stations grew by less than 15% over the same period.

Among consumers who haven’t purchased EVs, 61% said the main reason was the lack of public charging stations, according to a 2022 survey by Consumer Reports and the University of Chicago the associations cited. They also pointed to a 2021 University of California-Davis study indicating 20% of EV owners in California switched back to gas-powered vehicles because of problems charging their EVs. Among the issues cited are the 20 minutes to 40 minutes required to recharge their EVs at a Direct Current Fast Charger.

With robust incentives for automakers and equipment manufacturers to produce more electric vehicles and batteries for them, the lack of chargers is likely to become accentuated. Ford Motor Co. announced Monday it plans to build a $3.5 billion factory about 100 miles west of Detroit to produce an estimated 400,000 batteries for electric vehicles, the Associated Press reported. The plant is expected to start production in 2026 of lithium-iron-phosphate batteries, a less expensive option than the nickel-cobalt-manganese batteries currently being used in EVs.

What’s getting in the way of more EV charging stations is “an electricity market structure that was not designed for, and is not compatible with, selling transportation energy to on-the-go motorists,” the associations said. The best way to overcome the problem of so-called “range anxiety” EV drivers experience is to offer EV charging at fuel retailing locations they’re accustomed to.

This problem can be overcome by allowing owners and operators of public EV charging stations to generate eRINs, the associations said. The groups also support a hybrid model that would allow charging station owners to be able to monetize eRINS and overcome obstacles to EV charging station investments.

“The EPA should establish a ‘carve-out’ to enable charging station owners (in addition to original equipment manufacturers) to generate eRINs. The economics of installing and operating charging stations are exceedingly  challenging,” the associations said. “eRenewable Identification Numbers offer an opportunity for EPA to establish a clearer pathway to profitability for charging station investments.”

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