Is B.C.’s “carbon” tax little more than a thinly-veiled fuel tax?
While environmental groups laud B.C. for becoming the first North American jurisdiction to announce a full-fledged “carbon” tax, the trucking industry must feel like it will be shouldering an unfair share of the burden. If approved by the legislature, diesel prices will rise by 2.2 cents/litre by this summer and 8.27 cents/litre by 2012.
We all know how difficult it is for trucking companies to pass on the increased cost of fuel at the best of times. Now they must try to do so while competing companies from other jurisdictions can avoid filling up in B.C. altogether and pay substantially less for fuel. This will put B.C.-based carriers at a competitive disadvantage.
The province is promising the new tax will be “revenue-neutral,” with funds re-invested into individuals and businesses that reduce their reliance on fossil fuels. It’s being touted as a carrot-and-stick approach, but who can blame the trucking industry for wondering “Where’s our carrot?”
After all, there’s no recognition of the fact the trucking industry today is already operating remarkably clean equipment. The EPA07 engines are nearly smog-free. By 2010 they will be even cleaner. The trucking industry was “going green” even before the province of B.C. began debating the merits of a carbon tax.
The province’s carbon tax falls short of a cap-and-trade system, which would allow companies that reduce their emissions to then sell carbon credits to other companies that cannot reduce their pollution to agreed-upon levels. While the trucking industry has generally opposed a cap-and-trade system, at least it would provide the proverbial carrot for fleets that are able to demonstrate a marked reduction in fuel consumption. Most of the best-run truck fleets are doing this already. If a fleet operating only the latest environmentally-friendly equipment could turn around and sell credits to, let’s say, an oil and gas producer, it may actually benefit our industry.
There was mention in the province’s news release of funding biodiesel production facilities. One may speculate that fleets that adopt the use of biodiesel may be rewarded under the program. But the potential flaws of adopting alternative fuels have been well-documented. Biodiesel remains a viable option for fleets that are comfortable with its performance and benefits – but should the industry have alternative fuels forced down its throat? Particularly when there are some fairly sensible arguments out there that downplay their environmental benefits? We mustn’t forget that today’s diesel fuel at 15 PPM sulfur is not as dirty as it once was.
There’s also mention in the release of a $2,000 credit towards the purchase of fuel-efficient vehicles. No word on whether trucks will qualify, but they certainly should. The CTA has been pushing for incentives for early adopters of what it’s calling the enviroTruck – a EPA07 engine-equipped truck spec’d for optimum fuel economy. Hopefully this program is broad enough to include incentives toward the purchase of latest generation trucks and engines – even hybrids. Otherwise, it looks like the trucking industry will shell out millions in additional taxes without receiving a fair return. And if that’s the case, let’s just call a spade a spade and a fuel tax a fuel tax.
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.
I’m not in the trucking industry, but I’m familiar with BC’s upcoming carbon tax. You’re right, the trucking industry will feel a heavier burden than the average business or individual. But shouldn’t it? After all, the goal of the carbon tax is to reduce carbon emissions – and trucks tend to emit more CO2 than most.
Just like oil and coal companies, the trucking industry is going to have to change. In the short term, the industry could do everything it can to make trucks more fuel efficient (everything from truck design to driving habits). Long term? What about running trucks on natural gas, methane….or something else. New innovations will not only cut down costs, but could offer a new source of income for the industry when a cap and trade system is put into place.