Fuel-retailer groups say Inflation Reduction Act will ‘undercut, eliminate’ US biodiesel market

NATSO, representing America’s truck stops and travel plazas, and SIGMA: America’s Leading Fuel Marketers, are strongly urging lawmakers to oppose the Inflation Reduction Act of 2022 unless it provides tax parity between the biodiesel tax credit (BTC) and newly proposed sustainable aviation fuel (SAF) tax credit.

Although the bill extends the $1 per gallon biodiesel and renewable diesel tax credit, it provides a higher tax credit of up to $1.75 per gallon for SAF.

A higher tax credit for SAF will undercut America’s fuel supply, according to the two groups.

“The cost of everyday household goods and home heating bills will soar as the availability of biodiesel and renewable diesel decreases,” NATSO and SIGMA state in a July 29 press release. “Aggregate greenhouse-gas emissions also will increase across the transportation sector.”

Speaking on behalf of NATSO and SIGMA, David Fialkov, NATSO executive vice president of government affairs, said, “This legislation purports to create a ‘technology neutral’ clean fuels tax scheme, which fuel retailers have long supported. Favorable treatment for SAF flies in the face of this approach. SAF is less beneficial for the environment than renewable diesel and is going to cost taxpayers more. Providing more favorable tax treatment for a technology that has fewer environmental benefits undermines the intellectual integrity of the climate provisions in this bill. If special treatment for SAF was motivated by unique environmental benefits, it could fit neatly within what is otherwise a tech-neutral construct that applies to every other fuel under the bill.”

The trucking industry delivers more than 80 percent of America’s goods and relies on biofuels, like renewable diesel and biodiesel, to keep emissions low.

“If Congress passes a higher tax incentive for SAF, America’s supply of biofuels will become limited and more expensive,” NATSO and SIGMA state. “American consumers will pay more for all goods hauled by truck.”

Furthermore, the groups say that a higher SAF tax credit would also mean that “American taxpayers will foot the bill for another airline-industry handout, just two years after their most recent billion-dollar bailout.”

In addition, NATSO and SIGMA add that “SAF is more energy intensive to produce and saves less carbon emissions than renewable diesel. This additional incentive for SAF will undercut and eventually eliminate America’s biodiesel and renewable diesel market as disproportionate pressure is placed on feedstock. Because they compete for the same feedstock and have comparable emissions benefits, it is critical that lawmakers incentivize renewable diesel and sustainable aviation fuel at parity.”

Thus, NATSO and SIGMA say unless the legislative measure “puts the environment and economy first by providing parity between the BTC and SAF” credit, they will strongly urge lawmakers to oppose the bill.