The American Trucking Associations (ATA) cannot support the American Power Act, the climate change bill introduced May 12 by Sens John Kerry and Joe Lieberman, ATA President and Chief Executive Officer Bill Graves said.
This bill will raise the cost of gasoline and diesel fuel without significantly reducing the output of carbon dioxide by the trucking industry, which is a non-discretionary user of diesel fuel. The Senate bill would require refiners to purchase billions of dollars worth of carbon allowances that correspond to the carbon footprint of the fuels they sell. Refiners will then pass this cost on to consumers in the form of higher fuel prices. As such, the Senate bill operates as a hidden multi-billion-dollar tax.
“While others might object to our characterization, the climate bill clearly imposes a tax on transportation fuels and reallocates revenue from that tax for non-transportation purposes,” Graves said. Only a small portion of the tax would go to the Highway Trust Fund for much-needed improvements and repairs to the nation’s highway infrastructure.
“The bill will markedly increase the cost of fuel, but the trucking industry is not a ‘discretionary’ user of fuel,” Graves said. “While the trucking industry has reduced its fuel consumption and carbon output through the EPA SmartWay Transport Partnership Program and other efforts, the bulk of trucking companies’ fuel use is for their economically vital role of distributing freight whenever and wherever manufacturers, wholesalers, retailers, and consumers demand.”
In addition, forthcoming federal regulations required under existing law will mandate vehicle modifications that, while increasing the cost of trucks, will improve fuel efficiency and further reduce carbon emissions.
“The economically essential nature of trucking means that unless you shrink the economy and reduce the amount of freight transported, which would have disastrous results, you are not going to curb carbon output by trucking under this bill,” Graves said.
The ATA supports dedicating transportation tax revenue to the Highway Trust Fund in order to repair bridges and highways and eliminate congestion points, which would further reduce fuel consumption and carbon emissions.
“Part of our concern is that with this cap-and-tax bill, trucking companies are being asked to pay for the reduction of carbon output three times over,” Graves said. “The first payment will take the form of equipment cost increases for large truck fuel efficiency regulations referred to earlier. The second will be an increase in excise fees we pay into the Highway Trust Fund as the cost of trucks and tires rise under this legislation. And the third will be the enormous hidden fuel taxes that result from the Kerry-Lieberman bill.”
The bill offers incentives to trucking companies for converting from diesel trucks to natural gas trucks. While ATA supports development of natural gas and other alternative fuels, these incentives will be attractive to only a small number of companies with dedicated, short-distance operations. ATA also notes that these incentives are insufficient to ensure the build-out of a competitive natural gas refueling infrastructure.