Renewable fuel mandates can cut both ways to ensure adequate diesel supply

This fireside chat recap is from Thursday, the third day of FreightWaves’ Global Supply Chain Week.

FIRESIDE CHAT TOPIC: How various government policies on energy might impact diesel supply

DETAILS: With renewable diesel and biodiesel becoming ever more important parts of the supply chain, government policies on incentivizing those fuels’ production or mandating their use become significant. David Fialkov, the executive vice president of government affairs for both the National Association of Truck Stop Operators (NATSO) and the Society of Independent Gasoline Marketers of America (SIGMA), has the job of focusing on those policies and how they might impact supply. 

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KEY QUOTES FROM FIALKOV:

“Generally the pandemic did not result in damage to the truck stop and retail fuel industry that it did to others, like hotels and restaurants. Trucks kept moving during the pandemic.”

On Renewable Volume Obligations (RVOs), the tool the federal government uses to mandate renewable fuel use: “RVOs can result in diesel supply being extended by a higher RVO creating favorable economics for buying and producing and blending biodiesel and renewable diesel that wouldn’t be there otherwise.”

“We think that, developed properly, low-carbon fuel programs should be structured in a way where the incentive is tethered to consumer adoption through price. These programs, if implemented properly over a period of time, can result in a situation like what we have now where biofuel blends being sold at a discount to typical petroleum blends.”

On a provision in the Inflation Reduction Act for tax credits for renewable aviation fuel set at a higher rate than biodiesel/renewable diesel: “If the aviation industry is getting tax incentives to underwrite their pillaging of our low-carbon fuel supply, I think that is going to result in some unintended consequences on both the price and availability of diesel fuel.”

The post Renewable fuel mandates can cut both ways to ensure adequate diesel supply appeared first on FreightWaves.

Source: freightwaves - Renewable fuel mandates can cut both ways to ensure adequate diesel supply
Editor: John Kingston