A coalition of fuel retailers that represent the overwhelming majority of diesel fuel retailers and biodiesel blenders in the state of Missouri urged state lawmakers to oppose legislation (SB 568/HB 1858) that would mandate biodiesel be blended into every gallon of diesel fuel sold in the state.
Beginning in April 2022, SB568/HB1858 would require that all diesel fuel sold in the state be a minimum 5 percent biodiesel blend. By April 2025, the measure would require that fuel sold between April and October include a minimum 20 percent blend. The bill also includes a provision for lowering the percentages to a minimum 5 percent if the price of biodiesel rises to a degree that it "will cause economic hardship to the state."
Signatories included Casey's Retail Co., Kum & Go, L.C., Petro Stopping Centers, The Pilot Co., Travel Centers of America, Love's Family of Companies, Murphy USA Inc., Deluxe Truck Stop, Fast Lane Convenience Store, Joplin 44 Petro and Oak Grove 70 Petro.
In the letter, the companies said they support biodiesel incentive programs that help retailers lower the cost of fuel to customers. A biodiesel mandate, however, would raise fuel prices to a level that would lead truck drivers to fill up in neighboring states. It also would give producers the ability to raise prices regardless of market conditions.
"When it comes to diesel fuel, our customers choose the lowest-cost option because fuel is trucking companies' second-largest expense," the letters said. "When biodiesel incentive programs are structured such that biodiesel is priced competitively with diesel fuel, it becomes more economical for retailers to sell and consumers to buy biodiesel. We and our customers support these types of programs, because they lead to lower-costs for consumers while also increasing the quantity of biodiesel consumed."
The companies said that under a biodiesel mandate biodiesel producers would have greater leverage to increase prices because they would know their customers would be obligated to purchase their product and that the mandate would function like a hidden tax benefitting a small number of producers.
In an interview with OPIS, NATSO Vice President of Government Relations David Fialkov said the fact that biodiesel producers are pushing for mandates shows that biodiesel producers “learned all the wrong lessons” from the federal government’s approval of a measure to extend the biomass-based blenders tax credit (BTC) through 2022 and allow for retroactive payments back to 2017.
Fialkov expressed concern that aggressive efforts to promote mandates could harm efforts to increase the use of renewable fuels such as biodiesel. NATSO supports incentive programs similar to those already used by the federal government to give retailers an incentive for blending biodiesel.
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