Renewable Fuel Standard (RFS) Current Status ⢠On December 14 ...
Renewable Fuel Standard (RFS) Current Status
On December 14, 2015, EPA finalized its rulemaking establishing renewable volume obligations (RVOs) for 2014, 2015, and 2016. In setting those numbers below the statutory requirements, EPA exercised its “waiver authority” to set a more realistic level to avoid hitting the blend wall. On November 23, 2016 EPA also used this waiver authority in setting the 2017 RVOs for biodiesel and advanced biofuels below statutory levels (conventional biofuel (corn ethanol) RVOs were placed at the statutory maximum).
On July 5, 2017, EPA released its proposal establishing RVOs for 2018. Similar to years past, EPA has proposed to use its waiver authority to lower the RVOs below statutory levels, citing slower-than-expected development of the cellulosic biofuel industry and other challenges that have made it difficult to reach congressionally-mandated goals.
Background
Through the RFS, Congress mandated the production and blending of increasing levels of renewable fuels, culminating in the use of 36 billion gallons by 2022.
When the RFS was enacted, Congress believed that fuel demand would increase and that advanced biofuels would enter the market within the first few years of the program. Neither of those assumptions have held true.
Because the overall gallons consumed are lower than initially anticipated, the fuels market is unable to accommodate the statutory volumes in the RFS, risking a breach of the “blend wall.”
SIGMA has urged EPA to adjust the volume requirements to avoid the “blend wall,” and EPA proposes to make such an adjustment in its 2017 proposed rule.
Talking Points
SIGMA supports the RFS but acknowledges that it must be administered in a rational manner.
SIGMA supports EPA’s decision to exercise its statutory waiver authority to ensure that renewable fuel mandates do not exceed the volume of renewable fuel that the market
could reasonably absorb. SIGMA further believes that this was necessary in order to ensure that the RFS can achieve its objectives.
While the proposed 2018 RVOs appear achievable, further growth in the renewable fuels industry is constrained by insufficient consumer demand and retailer liability concerns.
Biodiesel Tax Credit Current Status
Legislation enacted in December 2015 extended the $1.00 per gallon biodiesel “blender’s” tax credit through 2016, though the credit has since expired. SIGMA supports its reinstatement.
Rep. Diane Black (R-TN) and Rep. Ron Kind (D-WI) introduced legislation (bill number unavailable at time of printing) to extend the credit through December 31, 2021. However, consistent with other provisions that phase out renewable energy tax incentives, the provision phases out the credit over 5 years. Under the phaseout, the tax credit amount is $1.00 per gallon in 2017 and 2018, $0.75 per gallon in 2019, $0.50 per gallon in 2020 and 2021, and zero in 2022 and later. The extension of present law applies to fuel sold or used after December 31, 2016.
Some Members have proposed converting the blender’s credit into a $1.00 per gallon producer’s credit, available only to U.S. producers of biodiesel, regardless of whether the product is used domestically or exported abroad. For example, the American Renewable Fuel and Job Creation Act of 2017 (S. 944/H.R. 2383), introduced this Congress, would try to convert the credit to a producer’s credit. SIGMA opposes this legislation.
Background
Since 2005, there has been a biodiesel and renewable diesel blender’s tax credit of $1.00/gallon.
The purpose of the blender’s credit is to reduce U.S. dependence upon foreign sourced petroleum by displacing it with renewable resources and to achieve improvements in air quality by incorporating a component with more attractive emission characteristics into diesel fuel. The blender’s credit has been successful in these goals and has resulted in lower costs to consumers.
Talking Points
Congress should reinstate the blender’s tax credit and should reject any efforts to change the credit to a producer’s credit.
If the producer’s credit were implemented, it would only apply to biodiesel produced in the United States. This would effectively be a $1.00/gallon tax on imported biodiesel. This would lead to higher prices for biodiesel in the United States.
When the credit is given to blenders, it is more attractive for retailers to blend and sell biodiesel, and these savings are passed along to consumers.
Ask your Member of Congress to co-sponsor legislation to reinstate the blender’s credit.
Transportation Funding Current Status
President Trump has promoted the idea of a significant infrastructure package during his first term in office. The Trump FY18 budget proposal contains language that would allow Interstate tolling and rest area commercialization. SIGMA opposes both Interstate tolling and rest area commercialization. The ban on such activities has been critical to the livelihood of businesses that are located near the highway and the communities that depend on their tax dollars.
An effective, efficient federal highway program is integral to the fuel marketing business. SIGMA supports long-term, sustainable funding for federal highway programs. The solution may include raising the federal motor fuel excise tax. However, SIGMA only supports such increases as long as the revenue generated is directed to fund highway infrastructure projects.
Rep. Jim Banks (R-IN), a freshman member, introduced on April 6, 2017, H.R. 1990, which would overturn the long-standing ban on rest area commercialization and allow states to offer food and commercial services at state-owned rest areas. SIGMA opposes the bill.
Background
On May 23, 2017, the Trump Administration released its FY18 budget proposal, which included President Trump’s preference for public private partnerships as they relate to infrastructure spending, including language to “liberalize tolling policy and allow private investment in rest areas.”
A fact sheet accompanying the release of the budget proposal states, “Tolling is generally restricted on Interstate highways. This restriction prevents public and private investment in such facilities. We should reduce this restriction and allow the States to assess their transportation needs and weigh the relative merits of tolling assets. The Administration also supports allowing the private sector to construct, operate, and maintain Interstate rest areas, which are often overburden[ed] and inadequately maintained.”
If state governments lease Interstate rest areas to private companies to operate commercial services, it would undo a 60-year ban on commercialized rest areas that formed the foundation for Interstate travel in the United States. Off-highway communities – which rely on the motoring public for survival – derive much of their commercial activity and tax
revenue from healthy off-highway businesses. Such commercial activities in off-highway communities would effectively vanish if rest areas were commercialized. Talking Points
SIGMA supports a self-sustaining source of funding for highway infrastructure. Modernizing motor fuels excise taxes seems to be the most effective way to fund the highway program.
SIGMA is strongly opposed to tolling and commercializing rest areas as a means of raising infrastructure revenue. Congress should reject ineffective, inefficient methods of raising money for the highway program that undercut businesses located off of highway exits.
Congress should reject any attempts to weaken the existing prohibition on rest area commercialization. Commercial activity will be diverted from off-highway communities to on-Interstate locations, taking needed tax revenue from localities.
Congress should reject any efforts to expand tolling on existing Interstates.
Menu Labeling Current Status
Representative Cathy McMorris Rodgers (R-WA) and Representative Tony Cardenas (D-CA) introduced H.R. 772, the Common Sense Nutrition Disclosure Act, on January 31, 2017. The legislation currently has 76 bipartisan cosponsors.
Companion legislation was introduced in the Senate (S. 261) on February 1, 2017 by Senators Roy Blunt (R-MO) and Angus King (I-ME). The Senate version of the bill has 14 bipartisan cosponsors.
On May 4, 2017, the Food and Drug Administration (FDA) published an interim final rule, which delays the FDA’s menu labeling rules until May 7, 2018. The interim final rule also solicits comments on how the agency could reduce the regulatory burden of the menu labeling regulation and increase flexibility for businesses. SIGMA will respond to the request for comments and will continue to press for FDA to adjust the rules to give more flexibility to fuel retailers on how they can provide calorie information to consumers. However, SIGMA will continue to advocate for a legislative fix.
Background
In 2010, Congress passed a provision to create a national, uniform nutrition-disclosure standard for foodservice establishments. In November 2014, the FDA released final regulations implementing this provision. These regulations generally cover any retail business that sells prepared food and has twenty or more locations operating or marketing under the same name (even single store operators that use the name of a large chain).
SIGMA does not oppose providing nutrition information to consumers – most of the food our members sell is prepackaged and already contains nutritional information. However, the FDA’s menu labeling regulations, which were written for chain restaurants, but cover a variety of other retail food outlets, do not account for the ways the convenience and motor fuel industry differs from the chain restaurant industry.
As currently written, the menu labeling rules have been exceedingly difficult for our industry to comply with, and further would subject retailers to potentially harsh penalties even if they undertake good faith efforts to comply.
Talking Points
The Common Sense Nutrition Disclosure Act (H.R. 772/S. 261)(“CSNDA”) would minimize unnecessary compliance burdens while enabling consumers to receive clear and helpful nutrition information, and would further revise the FDA’s menu labeling enforcement regime to provide for reasonable, predictable enforcement mechanisms. For example:
The legislation would allow stores to post all of the nutrition information on a single menu or menu board (as chain restaurants do), rather than having to create and post signage at every location within a store that has food (including soda fountains and coffee dispensers).
The bill would also clarify that an advertisement or marketing piece is not a menu and does not, therefore, need to include nutrition information. The bill would make clear that stores do not need to provide the same information in multiple places including on advertisements.
The bill would require FDA to account for natural calorie and nutrition variations in foods so that retailers are not liable for these unavoidable variations.
Currently, violations of the menu labeling rule can lead to individual store managers being charged with a felony. This doesn’t make any sense. The legislation would ensure that liability for violations is limited to high-ranking corporate officers. Additionally, the legislation would: o stipulate that establishments will not be penalized for minor, inadvertent errors; o bar plaintiffs’ lawyers from filing class action lawsuits alleging menu labeling violations; and o provide any retailer 90 days to correct an alleged violation before enforcement action is taken.
Ask your Member of Congress to cosponsor the Common Sense Nutrition Disclosure Act.
On December 14, 2015, EPA finalized its rulemaking establishing renewable volume obligations (RVOs) for 2014, 2015, and 2016. In setting those numbers below the statutory requirements, EPA exercised its “waiver authority” to set a more realistic level to avoid hitting the blend wall. On November 23, 2016 EPA also used this waiver authority in setting the 2017 RVOs for biodiesel and advanced biofuels below statutory levels (conventional biofuel (corn ethanol) RVOs were placed at the statutory maximum).
On July 5, 2017, EPA released its proposal establishing RVOs for 2018. Similar to years past, EPA has proposed to use its waiver authority to lower the RVOs below statutory levels, citing slower-than-expected development of the cellulosic biofuel industry and other challenges that have made it difficult to reach congressionally-mandated goals.
Background
Through the RFS, Congress mandated the production and blending of increasing levels of renewable fuels, culminating in the use of 36 billion gallons by 2022.
When the RFS was enacted, Congress believed that fuel demand would increase and that advanced biofuels would enter the market within the first few years of the program. Neither of those assumptions have held true.
Because the overall gallons consumed are lower than initially anticipated, the fuels market is unable to accommodate the statutory volumes in the RFS, risking a breach of the “blend wall.”
SIGMA has urged EPA to adjust the volume requirements to avoid the “blend wall,” and EPA proposes to make such an adjustment in its 2017 proposed rule.
Talking Points
SIGMA supports the RFS but acknowledges that it must be administered in a rational manner.
SIGMA supports EPA’s decision to exercise its statutory waiver authority to ensure that renewable fuel mandates do not exceed the volume of renewable fuel that the market
could reasonably absorb. SIGMA further believes that this was necessary in order to ensure that the RFS can achieve its objectives.
While the proposed 2018 RVOs appear achievable, further growth in the renewable fuels industry is constrained by insufficient consumer demand and retailer liability concerns.
Biodiesel Tax Credit Current Status
Legislation enacted in December 2015 extended the $1.00 per gallon biodiesel “blender’s” tax credit through 2016, though the credit has since expired. SIGMA supports its reinstatement.
Rep. Diane Black (R-TN) and Rep. Ron Kind (D-WI) introduced legislation (bill number unavailable at time of printing) to extend the credit through December 31, 2021. However, consistent with other provisions that phase out renewable energy tax incentives, the provision phases out the credit over 5 years. Under the phaseout, the tax credit amount is $1.00 per gallon in 2017 and 2018, $0.75 per gallon in 2019, $0.50 per gallon in 2020 and 2021, and zero in 2022 and later. The extension of present law applies to fuel sold or used after December 31, 2016.
Some Members have proposed converting the blender’s credit into a $1.00 per gallon producer’s credit, available only to U.S. producers of biodiesel, regardless of whether the product is used domestically or exported abroad. For example, the American Renewable Fuel and Job Creation Act of 2017 (S. 944/H.R. 2383), introduced this Congress, would try to convert the credit to a producer’s credit. SIGMA opposes this legislation.
Background
Since 2005, there has been a biodiesel and renewable diesel blender’s tax credit of $1.00/gallon.
The purpose of the blender’s credit is to reduce U.S. dependence upon foreign sourced petroleum by displacing it with renewable resources and to achieve improvements in air quality by incorporating a component with more attractive emission characteristics into diesel fuel. The blender’s credit has been successful in these goals and has resulted in lower costs to consumers.
Talking Points
Congress should reinstate the blender’s tax credit and should reject any efforts to change the credit to a producer’s credit.
If the producer’s credit were implemented, it would only apply to biodiesel produced in the United States. This would effectively be a $1.00/gallon tax on imported biodiesel. This would lead to higher prices for biodiesel in the United States.
When the credit is given to blenders, it is more attractive for retailers to blend and sell biodiesel, and these savings are passed along to consumers.
Ask your Member of Congress to co-sponsor legislation to reinstate the blender’s credit.
Transportation Funding Current Status
President Trump has promoted the idea of a significant infrastructure package during his first term in office. The Trump FY18 budget proposal contains language that would allow Interstate tolling and rest area commercialization. SIGMA opposes both Interstate tolling and rest area commercialization. The ban on such activities has been critical to the livelihood of businesses that are located near the highway and the communities that depend on their tax dollars.
An effective, efficient federal highway program is integral to the fuel marketing business. SIGMA supports long-term, sustainable funding for federal highway programs. The solution may include raising the federal motor fuel excise tax. However, SIGMA only supports such increases as long as the revenue generated is directed to fund highway infrastructure projects.
Rep. Jim Banks (R-IN), a freshman member, introduced on April 6, 2017, H.R. 1990, which would overturn the long-standing ban on rest area commercialization and allow states to offer food and commercial services at state-owned rest areas. SIGMA opposes the bill.
Background
On May 23, 2017, the Trump Administration released its FY18 budget proposal, which included President Trump’s preference for public private partnerships as they relate to infrastructure spending, including language to “liberalize tolling policy and allow private investment in rest areas.”
A fact sheet accompanying the release of the budget proposal states, “Tolling is generally restricted on Interstate highways. This restriction prevents public and private investment in such facilities. We should reduce this restriction and allow the States to assess their transportation needs and weigh the relative merits of tolling assets. The Administration also supports allowing the private sector to construct, operate, and maintain Interstate rest areas, which are often overburden[ed] and inadequately maintained.”
If state governments lease Interstate rest areas to private companies to operate commercial services, it would undo a 60-year ban on commercialized rest areas that formed the foundation for Interstate travel in the United States. Off-highway communities – which rely on the motoring public for survival – derive much of their commercial activity and tax
revenue from healthy off-highway businesses. Such commercial activities in off-highway communities would effectively vanish if rest areas were commercialized. Talking Points
SIGMA supports a self-sustaining source of funding for highway infrastructure. Modernizing motor fuels excise taxes seems to be the most effective way to fund the highway program.
SIGMA is strongly opposed to tolling and commercializing rest areas as a means of raising infrastructure revenue. Congress should reject ineffective, inefficient methods of raising money for the highway program that undercut businesses located off of highway exits.
Congress should reject any attempts to weaken the existing prohibition on rest area commercialization. Commercial activity will be diverted from off-highway communities to on-Interstate locations, taking needed tax revenue from localities.
Congress should reject any efforts to expand tolling on existing Interstates.
Menu Labeling Current Status
Representative Cathy McMorris Rodgers (R-WA) and Representative Tony Cardenas (D-CA) introduced H.R. 772, the Common Sense Nutrition Disclosure Act, on January 31, 2017. The legislation currently has 76 bipartisan cosponsors.
Companion legislation was introduced in the Senate (S. 261) on February 1, 2017 by Senators Roy Blunt (R-MO) and Angus King (I-ME). The Senate version of the bill has 14 bipartisan cosponsors.
On May 4, 2017, the Food and Drug Administration (FDA) published an interim final rule, which delays the FDA’s menu labeling rules until May 7, 2018. The interim final rule also solicits comments on how the agency could reduce the regulatory burden of the menu labeling regulation and increase flexibility for businesses. SIGMA will respond to the request for comments and will continue to press for FDA to adjust the rules to give more flexibility to fuel retailers on how they can provide calorie information to consumers. However, SIGMA will continue to advocate for a legislative fix.
Background
In 2010, Congress passed a provision to create a national, uniform nutrition-disclosure standard for foodservice establishments. In November 2014, the FDA released final regulations implementing this provision. These regulations generally cover any retail business that sells prepared food and has twenty or more locations operating or marketing under the same name (even single store operators that use the name of a large chain).
SIGMA does not oppose providing nutrition information to consumers – most of the food our members sell is prepackaged and already contains nutritional information. However, the FDA’s menu labeling regulations, which were written for chain restaurants, but cover a variety of other retail food outlets, do not account for the ways the convenience and motor fuel industry differs from the chain restaurant industry.
As currently written, the menu labeling rules have been exceedingly difficult for our industry to comply with, and further would subject retailers to potentially harsh penalties even if they undertake good faith efforts to comply.
Talking Points
The Common Sense Nutrition Disclosure Act (H.R. 772/S. 261)(“CSNDA”) would minimize unnecessary compliance burdens while enabling consumers to receive clear and helpful nutrition information, and would further revise the FDA’s menu labeling enforcement regime to provide for reasonable, predictable enforcement mechanisms. For example:
The legislation would allow stores to post all of the nutrition information on a single menu or menu board (as chain restaurants do), rather than having to create and post signage at every location within a store that has food (including soda fountains and coffee dispensers).
The bill would also clarify that an advertisement or marketing piece is not a menu and does not, therefore, need to include nutrition information. The bill would make clear that stores do not need to provide the same information in multiple places including on advertisements.
The bill would require FDA to account for natural calorie and nutrition variations in foods so that retailers are not liable for these unavoidable variations.
Currently, violations of the menu labeling rule can lead to individual store managers being charged with a felony. This doesn’t make any sense. The legislation would ensure that liability for violations is limited to high-ranking corporate officers. Additionally, the legislation would: o stipulate that establishments will not be penalized for minor, inadvertent errors; o bar plaintiffs’ lawyers from filing class action lawsuits alleging menu labeling violations; and o provide any retailer 90 days to correct an alleged violation before enforcement action is taken.
Ask your Member of Congress to cosponsor the Common Sense Nutrition Disclosure Act.
