NATSO Files Comments With EPA on Renewable Fuel Mandates

NATSO on Oct. 19 filed comments with the Environmental Protection Agency (EPA) in response to the agency's request for input on reducing renewable fuel mandates. Specifically, EPA has suggested that it is considering reducing annual renewable volume obligations (RVOs) by tying them to domestic renewable fuel production capacity, rather than the market's ability to consume renewable fuel. NATSO, in its comments, told EPA that this policy shift would undercut the purpose of the RFS and ultimately lead to higher fuel prices for consumers.

Congress has charged EPA with implementing the program in a manner that incentivizes NATSO's members to incorporate as much renewable fuel into their fuel supply as possible every year, NATSO wrote. "Built into this directive is the implicit recognition that fuel marketers will only sell products that their customers want to buy, and that consumers will only buy renewable fuel if it is an attractive value proposition. The RFS does not require consumers to purchase renewable fuel."

"To effectuate its congressional directive, EPA must constantly evaluate motor fuel market dynamics, including external policy developments, that affect fuel marketers' incentives to blend -- and their customers' incentives to buy -- renewable fuel." Although EPA appears inclined to do this, NATSO expressed concern that the agency's discussion of external policy issues -- such as the expiration and potential extension of the biodiesel tax credit -- "inaccurately characterizes the effect the issues' resolution will have on fuel retailers' incentives to incorporate renewable fuels into their fuel supplies."

With respect to the biodiesel tax credit, NATSO noted that the "benefit of a biodiesel blenders' credit is that it applies to all biodiesel blended in the United States regardless of where it is produced." Were Congress to convert the credit to a producer credit, as some midwestern lawmakers are advocating, "it would substantially reduce NATSO members' access to biodiesel that can be sold to customers at a price that is competitive with the diesel fuel it is designed to displace. It would be responsible for EPA to account for this policy shift, should it occur, in establishing the RVOs."

EPA is expected to issue its final renewable volume obligations by late November of this year. NATSO will be actively engaged in the biodiesel tax credit debate in Congress in the coming weeks.

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David Fialkov

David Fialkov is the Vice President of Government Relations, as well as the Legislative and Regulatory Counsel, at NATSO. In this capacity, Mr. Fialkov directs NATSO's legislative, regulatory, and legal strategy on a range of issues, including transportation, energy and fuels, labor, data security, and taxes. Mr. Fialkov also oversees NATSO's political engagement program, including individualized legal and political counsel to member companies. Prior to joining NATSO, Mr. Fialkov was the senior associate in the Government Affairs and Public Policy practice at the law firm of Steptoe and Johnson in Washington, D.C. At Steptoe, Mr. Fialkov advised clients on legislative, regulatory, and political issues, as well as legal concerns. His primary clients included trade associations representing the motor fuel wholesale and retail industries, including the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America. Mr. Fialkov's focus was not only on the motor fuels business, but also the litany of other issues that retailers confront, including labor matters, foodservice issues, healthcare and employment issues, tax matters and data security. Prior to joining Steptoe, Mr. Fialkov graduated with honors from George Washington University Law School. He received his B.S. Summa cum laude with highest honors from Clark University in Worcester, MA. He lives in Washington, D.C. with his wife Allison and daughter Lilah. More
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