Now is not the time, Gov. Pritzker, to repeal successful incentives for carbon-cutting fuels
Updated: Feb 17, 2021
Illinois Gov. JB Pritzker released a balanced budget proposal for the state in which he intends to “close corporate loopholes” to save the state nearly $1 billion. One of these “corporate loopholes,” as the governor calls them, is a wildly successful fuel sales tax exemption for blends of biodiesel 11 percent or higher.
The governor’s plan hopes to “accelerate the expiration of exemptions for biodiesel” to save $107 million. Since this incentive was passed nearly two decades ago, it has been a powerful measure in getting higher blends of biodiesel to the end-user. In 2011, I drove through Illinois in a diesel-powered dually on my way from North Carolina to Minnesota and was thrilled that every fuel pump I stopped at was labeled B11 or higher.
This tax incentive for the cleaner-burning, low-carbon fuel has helped Illinois become a leader in the consumption of biodiesel blends. Illinois uses 180 million gallons of biodiesel a year, providing an estimated value of $600 million to Illinois farmers. Furthermore, biodiesel can reduce carbon emissions by nearly 90 percent compared to petroleum diesel fuel.
As the world trends toward a lower-carbon future, biodiesel is integral to providing a diverse mix of fuels to mitigate the effects of climate change. The state of Washington is on the verge of passing a low carbon fuel standard (LCFS). California’s LCFS targets are largely being met by renewable liquid fuels such as biodiesel, renewable diesel and ethanol. Iowa is entertaining legislative ways to increase in-state consumption of biodiesel, while simultaneously incentivizing the buildout of infrastructure to successfully do so. Minnesota is a national leader with the first U.S. B20 standard. In fact, Illinois has a bill under consideration, HB229, which would incentivize B20 and higher blends.
The Illinois Soybean Growers says it commits to continued discussion with Gov. Pritzker to reconcile the proposals in a way that enhances the use of biodiesel in Illinois for improved air-quality outcomes.
Now is not the time to scale back incentives promoting green jobs that revitalize rural economies, clean the air, and reduce carbon emissions in our fight against change.
From the federal government to local administrations, policymakers and regulators have been pushing the electrification agenda more and more in recent years. There are some in the biodiesel space who see a utopian future in which biodiesel and renewable diesel can peacefully coexist with electrification. There are those who say we need to embrace electrification in a collective effort to curb carbon emissions.
Only a small fraction of U.S. power, however, is renewable today. According to the EIA, this share was 17 percent in 2019. The same agency predicts that, by 2050, nearly 30 years from now, only 42 percent of our power will come from renewable energy. The remainder—58 percent—will still come from fossil fuels and nuclear sources.
But those who are solely and exclusively pushing the electrify-everything agenda—passenger vehicles, medium- and heavy-duty transport, heating and more—to the detriment of other clean, renewable, sustainable fuels are hoping people won’t notice this. With only 42 percent of U.S. electricity expected to be renewable 30 years from now, this approach only appears to be shifting carbon emissions from tailpipes to smokestacks.
If we truly wish to see a kumbaya future in which liquid renewable fuels like biodiesel can peaceably and synergistically coexist with the steamroller of electrification, then we need to advocate loudly and convincingly today for a diverse low-carbon energy future tomorrow—not a monochromatic, single-source monopolistic debacle. Otherwise, we might as well prepare to sit back and watch as clean fuels like biodiesel get legislated out of existence to save a few dollars while proponents of electrification plan to spend untold trillions to prop up an energy economy that won’t even be half renewable by 2050.
We can reconcile our nation’s prosperity and economic livelihood with climate-conscious endeavors. This must be done, however, in an energy-diverse, inclusionary way. The best way to accomplish our goals of continued economic growth, clean energy, cleaner air, and risk mitigation does not begin with repealing successful policies that have expanded the use of lower-carbon fuels such as biodiesel for nearly two decades. In fact, Illinois’ sales tax exemption should be heralded as a model to follow.
“As a farmer who understands that there are markets around the world for my crop, I am always reminded of the value that biodiesel has right here at home,” said Doug Schroeder, a soybean farmer from Mahomet, Illinois, who chairs the Illinois Soybean Growers. “Biodiesel adds value to my farm, my community and my state. This last year and COVID-19 have put extra attention on air quality for all Illinoisans. Sustaining our use of B11 at a minimum and moving to B20 and higher biodiesel blends helps in promoting an Illinois product, all while reducing our dependence on fossil fuels. I look forward to continuing the conversation, and working with all partners to use more biodiesel to improve our economy and public health.”