On May 17, 2016, the Senate Environment and Public Works (EPW) Committee approved the Diesel Emissions Reduction Act (DERA) of 2016, legislation that would reauthorize the DERA retrofit grant program at the U.S. Environmental Protection Agency (EPA) through 2021, at $100 million annually. This legislation was later adopted as an amendment to the Energy Policy Modernization Act of 2016, which was approved by the full Senate on May 20. The House has not yet approved a reauthorization measure, but on May 25, the House Interior, Environment and Related Agencies Appropriations Subcommittee unveiled its FY 2017 spending bill which allots $100 million for DERA grants next year.  

Established under the Energy Policy Act of 2005, the DERA Grant Program authorizes funding of up to $100 million annually for FY 2012 through FY 2016 to help fleet owners reduce diesel emissions. The EPA is charged with distributing DERA funds. For reference, the DERA program was awarded $20 million in FY 2014, $30 million in FY 2015, and $70 million for FY 2016. Authorization of the DERA program is set to expire this year. To increase DERA’s odds of receiving funding, NAFA signed onto a multi-industry letter to Congressional appropriators earlier this year requesting the full authorization of $100 million for FY 2017.

 

On May 18, the U.S. Environmental Protection Agency (EPA) released proposed volumes for renewable fuels for 2017 under the Renewable Fuel Standard (RFS), and proposed volumes for biodiesel for 2018. The total proposed volumes for all fuel categories in 2017 are 18.8 billion gallons, a modest increase over 18.11 billion gallons for 2016. Total biofuel volumes are proposed at 10.44 percent of the gasoline supply, as opposed to 10.10 percent in 2015, a critical threshold in moving beyond the current E10 ‘blend wall’.

Reaction to the EPA’s proposal was mixed, with some lawmakers calling the RFS mandate "unsustainable." A statement issued by Reps. Bill Flores (R-TX), Peter Welch (D-VT), Bob Goodlatte (R-VA.), Jim Costa (D-CA) and Steve Womack (R-AR) said the increases will hurt the American economy and environment. "The EPA’s proposal forces more ethanol into the market than our current infrastructure can handle," they wrote. House Energy and Commerce Committee leaders said that while the EPA’s attempt to finish the rule on time was positive — the EPA retroactively finalized requirements for 2014 and 2015 last November — the program itself requires oversight.

The proposal’s increases also failed to mollify industry groups, including those who support the mandate. The Renewable Fuels Association (RFA) criticized the EPA for catering to the oil industry by not sufficiently increasing blending targets. Despite the RFA’s claims that the EPA’s proposed regulations set out to placate the oil industry, American Energy Alliance President Thomas Pyle criticized the rule, calling it "detached from reality."

EPA will accept public comment on the proposal through July 11, 2016. The volumes are expected to be finalized by November 30.

 

On May 25, 2016, Sen. Cory Gardner (R-CO) introduced S.Con.Res. 40, legislation to oppose any increase to the federal excise tax (FET) on new heavy-duty trucks. The current 12 percent FET on the sale of most new heavy-duty trucks is by percentage the highest levied tax by Congress on any product. The legislation doesn’t prevent an increase by statute, but it would put the Senate on record opposing an increase of the FET. S.Con.Res. 40 is companion legislation to H.Con.Res. 33, which was introduced in the House by Reps. Reid Ribble (R-WI) and Tim Walz (D-MN) last year. 

The FET was originally imposed to help defray the cost of World War I. Since 1955, the excise tax rate on new heavy-duty trucks, tractors and trailers has increased by 300 percent, ballooning from 3 percent to its current rate of 12 percent.

"The existing 12-percent FET on heavy-duty trucks, which adds nearly $20,000 to the cost of a new truck, is already a severe detriment to businesses looking to replace aging fleets with newer, safer and more fuel-efficient vehicles," said American Truck Dealers (ATD) Chairman Steve Parker. "An increase in the FET would only further deter these important investments - investments that help keep our roads safer."

In addition to NAFA, S.Con.Res. 40 is supported by a number of industry groups including the American Highway Users Alliance, Owner Operator Independent Drivers Association, and the Truck & Engine Manufacturers Association, among others.