What could be in store for the fuels and vehicles industries in the U.S. (and globally) if former Vice President Joe Biden wins the White House, the Republicans lose the Senate and the Democrats retain the House of Representatives? Such a Democratic sweep is possible, but the race is not over yet. But assuming such a sweep, what can industry expect? This post focuses on answering those questions. To do so, I reviewed recent climate plans that have been developed by the Senate Democrats, House Select Committee on the Climate Crisis (HSCCC) and the Biden campaign. The bottom line, and as you might expect, the politics shapes the policy.
First, it is interesting to me these plans have been released at this particular time during the election season and that they are so specific in detail (incredibly so, in the case of the House Democrats). What it says to me is that the Democrats are confident that they will “sweep” the presidency and Congress. Such plans appeal to the Democratic base and progressive wing of the party and are not likely to scare away more moderate and conservative voters who do not approve of President Trump’s performance and who would likely vote for Biden anyway.
Second, there are five policies where there is substantial alignment among the Biden campaign and House and Senate Democrats:
It is not clear whether a national LCFS would replace the current Renewable Fuels Standard (RFS2) program. The House plan makes specific reference to replacing the RFS2 program with a national LCFS. The other two plans do not address the issue. Presumably though, that would be the most likely scenario. How such a national program would address other state programs such as California’s and Oregon’s is unclear. Would there be preemption of these programs, or of other states that are considering such programs? Would it preclude states from considering other initiatives such as carbon taxation on petroleum fuels? Those questions would need to be addressed.
A national program would be great for low carbon advanced biofuels, but what about 1G fuels? What about octane improvement, or even an octane standard, something the auto, ethanol and some in the refining industries have been discussing over the last few years. Notably, the plans are silent on 1G (beyond a national LCFS) and octane improvement. While there are a range of different incentives for ZEVs, there are none for advanced biofuels (such as renewable diesel or renewable natural gas) and what I would call “advanced 1G”: those biofuels with reduced carbon intensity (CI) below 50-40 gCO2e/MJ.
As might be expected, there is a MAJOR focus on electrification but not just for LDVs — for medium- (MDVs) and heavy-duty vehicles (HDVs) as well. Over half the initiatives that could be on the table as early as the first quarter of 2021 focus on electrification and include mandates, a range of different types of incentives and R&D. We can speculate that, similar to what we have seen in the EU and China, fuel economy policy will be designed to facilitate EV uptake as well.
Finally, additional transport modes such as shipping and aviation have been included. Additional credits would be provided to sustainable aviation fuels (SAFs) under a national LCFS, new GHG standards for aircraft would be required and other tax incentives would be created for low emission technology. Shipping fuels would be eligible to generate credits under the RFS2 or national LCFS and there is a focus on electrification (for ports and ferries).
A comparison of policy initiatives under the three plans follows in Table 1.
Table 1: Democratic Fuels- and Vehicles-Related Policy Initiatives
Source: Compiled by Future Fuel Strategies citing the respective plans, September 2020
 One of the best and relatively neutral source I frequently consult is Real Clear Politics. See e.g. Real Clear Politics, Latest Polls at https://www.realclearpolitics.com/epolls/latest_polls/pres_general/.
 Chuck Schumer, et al., “The Case for Climate Action: Building a Clean Economy for the American People” at https://www.democrats.senate.gov/climate-report.
 Biden Campaign, The Biden Plan to Build A Modern, Sustainable Infrastructure and an Equitable Clean Energy Future at https://joebiden.com/clean-energy/#.