INSIDE CFAA: Forward Motion for Clean Fuels
May 29, 2023
BY Floyd Vergara
As state and federal lawmakers continue prioritizing environmental and energy issues, carbon policies are steering the future of biodiesel, renewable diesel and sustainable aviation fuel (SAF), amplifying an already growing market. While the Renewable Fuel Standard continues to be an important federal policy driving biomass-based diesel production, states are increasingly taking leadership roles developing and implementing their own renewable fuel policies.
Momentum from California’s Low Carbon Fuel Standard continues to build the framework for the success of biodiesel and renewable diesel. Nearly 1.7 billion gallons of biomass-based diesel was used in 2022, displacing nearly half of the entire diesel fuel pool in California and accounting for the largest source of carbon reductions in the program. Carbon programs in Oregon and Washington are expected to see similar results from the increase in biodiesel and renewable diesel consumption, helping achieve carbon reduction targets in the hard-to-electrify sectors.
Nearby, legislation in Colorado would have exempted biodiesel and renewable diesel from the state’s excise tax for special fuels. New Mexico was again on the cusp of passing a Clean Fuel Standard and incentives for blending and selling biodiesel. Although these bills did not pass, they opened the door for future conversations about policies that would help promote market growth.
Last year, various policies supporting renewable fuels passed in Iowa, Illinois and Missouri in the form of tax incentives resulting in an additional 280 million gallons of biodiesel demand. These successes have led to states like Nebraska, Indiana and Michigan to also pursue biodiesel incentives while sparking conversation for a Midwest Clean Fuel Standard.
Moving east, New York, Massachusetts, Connecticut and Maryland continue to study and consider policies for biodiesel, renewable diesel, Bioheat fuel and SAF as they work toward net-zero carbon emissions goals. Making up 40% of the home heating oil market in the Northeast, New York, Connecticut and Rhode Island have enacted Bioheat fuel mandates requiring increasing amounts of biodiesel to be blended with traditional heating oil.
Vermont recently passed legislation adopting a Clean Heat Standard, starting a two-year regulatory adoption process. The legislation would require heating oil dealers and suppliers to buy or sell credits based on the carbon content of their fuel, including biodiesel and renewable diesel. Finally, pending legislation in New York would create a Clean Fuel Standard for all transportation fuels.
These efforts are due in large part to the state soybean and Clean Fuels’ member organizations that work diligently with our state and federal teams to advocate for policy that meets America’s energy needs while adding economic value in our heartland.
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