The National Association of Convenience Stores (NACS), Society of Independent Gasoline Marketers of America (SIGMA) and National Association of Truck Stop Operators (NATSO) are urging Congress to advance a group of bipartisan energy and tax policy proposals during the remaining balance of the 118th Congress, which will end Jan. 3.
The groups, which represent convenience stores, travel centers, truckstops and fuel marketers, sent a letter Wednesday addressed to Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Mike Johnson and House Minority Leader Hakeem Jeffries. It was also signed by 36 organizations representing a spectrum of energy and transportation providers, consumers and agriculture.
Starting Jan. 1, and following enactment of the Inflation Reduction Act of 2022, the tax code institutes a planned shift from the longstanding structure of energy tax incentives flowing from the Energy Policy Act of 2005 toward a new “technology neutral” energy tax regime, the letter said. The new regime will represent a significant change for which many of the associations’ companies and industries have spent much of 2024 planning, they said.
The Treasury Department has not yet implemented final regulations for these policies, however, “meaning we approach 2025 with significant uncertainty,” the letter said.
A short-term energy package that incorporates several proposals to extend fuel tax credits for an array of alternative fuels, including the biodiesel blenders’ tax credit, can incentivize a technology-neutral approach to decarbonization and the nation’s energy tax structure while giving industry time to understand and adjust to new tax structures, the associations said.
The proposed short-term tax package would prevent “unnecessary disruption in the energy and fuel markets,” the associations wrote.
“Particularly given the upcoming 2025 tax policy debate, enacting a modest, short-term tax package this fall would help to ensure energy and agriculture market stability and predictability while preserving grounds for an open energy and tax debate in the 119th Congress,” the associations wrote in the letter. “Absent the certainty provided by a bridge package, American consumers would face rising energy and fuel prices, and our organizations and the members we represent would face regulatory, legal, and tax filing uncertainty. The combination of these effects would be economic headwinds at a time when Congress and tax-writers are attempting to consider more broad, holistic reforms and extensions in the tax system.”
Inflation Reduction Act and Biodiesel Blenders’ Credit
The Inflation Reduction Act was signed into law in August 2022 and created a new Clean Fuel Production tax credit known as "45Z." The industry said it has not received guidance from the Biden administration regarding what the value of that credit will be for different fuels. The uncertainty from that, along with the scheduled expiration of the biodiesel blenders’ credit at the end of 2024, is hurting biodiesel producers, fuel retailers, trucking companies and the entire soy complex, the associations said.
Biodiesel and renewable diesel have historically been the most widely used biofuels in commercial trucking and remain the most viable option for reducing carbon emissions from the nation’s trucking, home heating oil and rail industries in the near term, the organizations said. The biodiesel’s blenders’ tax credit lowers the cost of diesel fuel for truck drivers, which reduces shipping costs and helps lower the prices consumers pay for goods transported by truck, they said.
Biodiesel is a liquid fuel used to power compression-ignition engines manufactured from vegetable oils, animal fats and recycled restaurant grease. It can be used in any equipment that operates on diesel fuel.
"The biodiesel blenders' tax credit is a key policy that helps keep diesel prices down and reduces carbon emissions," said Doug Kantor, NACS general counsel. "We should not sacrifice those goals simply because guidance on a new tax credit is not ready. It's time for an extension that will allow for an orderly transition to a new tax policy next year and avoid chaos at the end of this year."
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