Legislative Alert: Coalition Urges Support for Renewable Liquid Heating Fuels

July 26th, 2021 - 5:16 pm

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NEFI and 18 allied trade associations penned a letter to Congress this week urging inclusion of renewable fuels as part of a national strategy to reduce emissions in the residential energy sector.

Democrats are working on a filibuster-proof $3.5 trillion reconciliation bill that could include a myriad of energy, climate, and tax provisions. Among the proposals being considered are robust new tax incentives for the installation of energy efficient HVAC appliances that exclude oil-fired systems; and direct-to-consumer rebates of up to $10,000 or more for the installation of air source heat pumps. In short, federal policymakers are currently focused on an "electrify everything" agenda that may overlook our industry's more cost-effective, lower carbon solutions.

The coalition letter circulating Congress this week highlights the pitfalls of leaning solely on heat pumps to reduce emissions in the building sector. According to the letter, heat pumps are "unaffordable or impractical for many homeowners", as a system conversion can cost $35,000 or more, potentially placing massive economic burdens on vulnerable communities and families on a fixed income.

The letter also shines a bright light on the inefficiencies of heat pumps in colder climates and warns that overreliance on heat pumps can overwhelm the electric grid, increase reliance on fossil fuel generation, and even result in catastrophic power outages. Additionally, the coalition asks lawmakers to consider that leaky refrigerants utilized by heat pumps are 2,088 times worse for the climate than carbon dioxide.

Conversely, renewable liquid heating fuels "utilize existing storage and distribution infrastructure and, with minor modifications, work seamlessly in existing appliances to deliver immediate reductions in greenhouse gas emissions at little to no additional cost to the consumer." The letter points to biodiesel-blended heating oil (i.e., Bioheat® Fuel) and ethyl levulinate (EL), a net-negative carbon fuel being developed in Maine that is derived from forestry products and residues and municipal solid waste.

The coalition urges lawmakers to support the availability, adoption, and use of these fuels by:

  1. making biofuel-compatible heating systems eligible for new federal tax incentives and rebate programs for energy efficiency;
  2. enacting long-term extensions of the biodiesel and cellulosic biofuel tax credits; and
  3. expanding a USDA grant program that encourages downstream investments in biofuel infrastructure.

The letter concludes that policies must "reward fuels and technologies that reduce total lifecycle carbon-equivalent emissions and not favor one specific low- or zero-carbon fuel or technology to the detriment of all others."



In addition to NEFI, the coalition letter is signed by the Advanced Biofuels Association, American Energy Coalition, Berks-Schuylkill Oil Heat Association, Better Home Heat Council of Lehigh Valley, Connecticut Energy Marketers Association, Delaware Valley Energy Marketers Association, Empire State Energy Association, Energy Marketers Association of New Hampshire, Energy Marketers Association of Rhode Island, Fuel Merchants Association of New Jersey, Maine Energy Marketers Association, Massachusetts Energy Marketers Association, National Association of Oil & Energy Service Professionals, New York State Energy Coalition, Oilheat Manufacturers Association, Pennsylvania Petroleum Association, South Central Pennsylvania Energy Association, and Vermont Fuel Dealers Association.