Fuel Choice and Deregulation Act of 2025
The Fuel Choice and Deregulation Act of 2025 is a Senate bill introduced by Senator Rand Paul that seeks broad regulatory relief for alternative fuels, technologies, and the aftermarket sector, while expanding how certain fuels and manufacturers are treated under federal air quality and fuel economy rules. Key aims include reducing regulatory friction for aftermarket conversions to alternative fuels, shielding biomass fuels from EPA control under the Clean Air Act, expanding definitions and metrics to count a wider range of fuel options in fleet and fuel economy calculations, providing favorable treatment and bonuses to “fuel choice enabling” manufacturers, and expanding ethanol blending allowances. If enacted, the bill would instrumentalize a more permissive posture toward aftermarket conversions, broaden what counts as a viable alternative fuel in official calculations, incentivize manufacturers that offer a diverse set of fuel options, and ease the path for higher ethanol blends in gasoline. The overall effect would be to accelerate adoption of non-petroleum fuels and technologies, while reducing some regulatory barriers for producers, vehicle buyers, and certain fuel blends. Some provisions create potential regulatory flexibility, but also carry implications for emissions oversight and market dynamics.
Key Points
- 1Aftermarket conversions to alternative fuels: The bill amends the Clean Air Act to largely shield aftermarket conversion systems from “tampering” findings if the conversion is well-engineered, matched to the vehicle, and does not degrade emissions. A labeling requirement is added to indicate post-sale installation, and the EPA can still prohibit a conversion if it degrades emission performance.
- 2Biomass fuels protection: Biomass fuels would be shielded from prohibition or control under the Clean Air Act, limiting EPA authority over these fuels.
- 3Expanded fuel definitions and eligibility: Creates new or expanded terms for biodiesel (with limitations related to tax credits), E85 (51-83% ethanol), flexible fuel vehicles, M85 (methanol up to 85%), plug-in electric drive vehicles, and “fuel choice enabling vehicles” and manufacturers. A “fuel choice enabling manufacturer” must have at least 50% of its most recent model-year fleet as fuel-choice-enabled.
- 4Incentives for fuel choice enabling manufacturers:
- 5- Deemed compliance with greenhouse gas standards for model years 2020 and later if manufacturers meet applicable standards for that year.
- 6- Credits earned for exceeding standards can be carried forward for up to five model years.
- 7- A bonus of 8 mpg added to the average fuel economy calculation for fuel-choice enabling manufacturers.
- 8- These provisions would apply to model year 2026 and later.
- 9Ethanol waiver expansion: The ethanol waiver under the Clean Air Act would be expanded to allow 10% or more ethanol blends (and related language changes), facilitating higher ethanol content in gasoline and relaxing some existing constraints on “additional alcohol” use.