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NEFI and Partners Reach Out to Northeastern Congressional Delegation

In April, NEFI published and distributed a letter to every member of Congress from the Northeast, emphasizing the crucial role renewable liquid heating fuels (RLHFs) play in reducing greenhouse gas emissions and helping to achieve the region’s ambitious energy and climate goals. In addition to NEFI, the letter was also signed by the National Association of Oil & Energy Service Professionals (OESP) and nearly every state and local liquid heating fuel association in the Northeast.

The letter states that RLHFs “provide an immediate, equitable, and low-cost solution for decarbonizing the thermal sector.” It goes on to remind lawmakers they are a “plug-and-play solution for immediate emissions reductions in the Northeast that utilize existing infrastructure, do not require costly residential conversions to electric space heating technologies, and bolster regional energy reliability and security.”

To facilitate a more immediate, affordable, and equitable energy transition, the letter urges federal lawmakers to support three key policy proposals:

Increase volumes for biodiesel in the Renewable Fuels Standard (RFS),
Extend the existing biodiesel and renewable diesel blender tax credit (BTC) for two years, and
Establish a new, targeted federal incentive for the blending of advanced biofuels into home heating oil.

The full text of the letter is provided below. NEFI was in the process of developing a grassroots “call to action” as Oil & Energy went to print, in order to allow fuel dealers and other industry stakeholders to reach out directly to their members of Congress in support of this initiative.

April 10, 2024

Dear Members of the Northeast Congressional Delegation:

The undersigned organizations write to bring to your attention federal policy issues that affect the heating oil industry’s ongoing transition to renewable liquid heating fuels (RLHFs) and broader regional efforts to reduce greenhouse gas emissions.

Retail distributors of home heating oil, commonly referred to as “heating fuel dealers,” provide warmth and comfort to more than five million American homes and small businesses, 85-percent of which reside in the Northeast region from Maryland to Maine. Most heating fuel dealers are small, family-owned businesses that serve both Main Street and rural communities, and often have close personal relationships with their customers that can span multiple generations.

At a summit in Providence, Rhode Island in 2019, heating fuel dealers from across the region committed to achieving a 40-percent reduction in greenhouse gas (GHG) emissions by 2030 and delivering a net-zero heating fuel to consumers by 2050. This pledge, known as the “Providence Resolution,” was mainly to be accomplished through increasing blends of biodiesel, renewable diesel, and other next-generation biofuels into the region’s heating oil supply.

The Providence Resolution is resulting in historic achievements in carbon reduction. Across the region, retailers are embracing renewable fuels and rebranding their businesses accordingly and educating their workforce and customers on the many economic and environmental benefits of these fuels. Beckett Corp. and Carlin Combustion Technology have introduced new burners compatible with blends of up to 100% renewable fuel, and other manufacturers have certified ultra-efficient furnaces and boilers as compatible with high blends of biofuel. These systems are eligible for a federal tax credit under the Inflation Reduction Act of 2022 (IRA).

Several Northeast states now require by law or regulation the use of blends of biofuel, including biodiesel and renewable diesel, in home heating oil. For example, the blending requirements in Connecticut, New York, and Rhode Island are to increase to as much as 50% by 2030. Other states in the region are developing or have pledged to pursue similar policies. These state efforts rely on robust implementation of the renewable fuels standard (RFS), tax incentives, and other federal policies to ensure sufficient renewable fuel supply and affordability.

This success is owed to the fact that RLHFs provide an immediate, equitable, and low-cost solution for decarbonizing the thermal sector. They are a plug-and-play solution for immediate emissions reductions in the Northeast that utilize existing infrastructure, do not require costly residential conversions to electric space heating technologies, and bolster regional energy reliability and security. However, like all successful policies to reduce GHG emissions, continued support is needed from federal policymakers, including from members of Congress.

Recognizing the important role RLHFs play in building decarbonization in our region, we urgently request your support for the below policy proposals. Note that our focus is largely on biodiesel and renewable diesel, which are distinct from corn ethanol and serve different markets.

1. Increase RFS Renewable Volume Obligations: Renewable Volume Obligations (RVOs) set for 2023, 2024, and 2025 under the EPA’s Renewable Fuels Standard (RFS) do not reflect current market growth, production capacity, or demand. Two U.S. biorefineries recently idled production as a result, and experts warn there may be additional plant closures in the months ahead. Higher RVOs for the biomass-based diesel category, which is comprised of biodiesel and renewable diesel, are needed to ensure a competitive Renewable Identification Number (RIN) market and adequate fuel supplies in the Northeast. Please urge the administration to issue an emergency action that increases the RVOs for biomass-based diesel by at least 500 million gallons for each of these years.

2. Extend the Blender Tax Credit (BTC): Enact legislation to extend the existing $1 per gallon tax credit for biodiesel and renewable diesel blending for two additional years beyond its expiration on December 31, 2024. An extension will encourage continued availability of these fuels in the Northeast for blending into home heating oil supplies.

3. Establish a Targeted RLHF Incentive: Create a new, long-term incentive for blending advanced biofuels into home heating oil to ensure the Northeast remains competitive, particularly as demand grows for these fuels in the global aviation and marine sectors.

Continued support for RLHFs will help lower home energy costs, reduce emissions, support American farmers and Main Street businesses, and ensure our industry and the Northeast states are able to achieve their ambitious carbon reduction goals. We urge your leadership in addressing these policy priorities to facilitate a more immediate, affordable, and equitable energy transition.

Thank you for your consideration of this important matter.

Sincerely,

Eastern Pennsylvania Energy Association
Energy Marketers Association of Rhode Island
Fuel Merchants Association of New Jersey
Maine Energy Marketers Association
Massachusetts Energy Marketers Association
National Energy & Fuels Institute
National Association of Oil & Energy Service Professionals
New York State Energy Coalition
Northeastern Pennsylvania Energy Association
Pennsylvania Petroleum Association
South Central Pennsylvania Energy Association
Vermont Fuel Dealers Association

i U.S. Census Bureau, 2022 American Community Survey, Primary heating fuel by occupied housing units.
ii www.nefi.com/news-publications/recent-news/heating-oil-industry-commits-net-zero-emissions-2050
iii www.fueloilnews.com/2024/02/21/nora-b100-heating-is-here
iv An oil furnace or boiler qualifies for up to a $600 credit if it meets 2021 ENERGY STAR criteria and is certified for use with at least 20% biofuel blends, increasing to 90 AFUE and 50% blends on January 1, 2027. See 26 U.S.C. §25C(d)(2)(C).
v See Conn. Gen. Stat. § 16a-21b; N.Y. Env. Conserv. Law § 19-0327; 23 R.I. Gen. Laws § 23-23.7.
vi www.reuters.com/business/energy/chevron-idles-two-us-midwest-biodiesel-plants-profits-slip-2024-03-01
vii www.agriculture.com/more-biodiesel-plants-may-close-in-2024-says-ag-analyst-8608468
viii www.farmdocdaily.illinois.edu/2024/03/biodiesel-prices-and-profits-again.html
ix See 26 U.S.C. §40A(g), setting forth the expiration date of the biodiesel and renewable diesel blending credit.