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

Official sees some policies boosting supplies truckers need but remains concerned about others

David Fialkov of NATSO and SIGMA speaks at Global Supply Chain Week.

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. 

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.”


John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.