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13 East Coast States Propose Cap-And-Trade Limits For Gas, Diesel Distributors

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Thirteen New England and mid-Atlantic states are moving to set pollution regulations aimed at distributors of gasoline, potentially opening another front in the Trump administration’s attempt to prevent states from setting stricter standards than the federal government.

The Transportation and Climate Initiative proposed Tuesday that operators of oil terminals and gasoline distributors would be forced to buy credits to offset the pollution they create from refining gasoline and diesel fuel.

The regulations would not apply to jet or boat fuel.

Unlike emission standards set by the state of California, and followed by many of these same states, the TCI standards would not apply directly to automakers.

The idea borrows from a regional cap-and-trade system called the Regional Greenhouse Gas Initiative that limits pollution from power plants. In that system utilities pay a penalty if they exceed limits on greenhouse gas emissions.

To avoid the penalty, utilities can purchase credits.

As with the RGGI, the Transportation and Climate Initiative would take effect in 13 states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia and the District of Columbia.

Last month, the Trump administration moved to revoke California’s right to limit air pollution from cars, launched an investigation of four automaker who agreed to abide by California’s stricter greenhouse gas emission rules and threatened to withhold federal highway funds from the nation’s largest state.

The Environmental Protection Agency wants to freeze federal fuel economy requirements for automakers at 2020 levels through 2026, or an average per each company’s fleet of about 37 miles per gallon.

But Ford, Honda, BMW and Volkswagen agreed to California’s proposal that vehicles sold in that state get an average of about 51 miles per gallon by 2026.

The transportation sector of the U.S. economy is the largest source of greenhouse gas emissions, accounting for more than one-third of all such emissions in the U.S., according to the TCI’s web site.

“By working together on this, we can really deliver a better, cleaner, more resilient transportation system benefiting all of our communities, particularly those who are underserved by current transportation and also disproportionately affected by pollution,” said Kathleen Theoharides, secretary of Massachusetts executive officer of energy and environmental affairs.

A final agreement, including the specific limits on particular emissions, isn’t expected until spring 2020.

The Quincy Patriot Ledger, citing Massachusetts energy officials, reported that the caps would take effect in 2022 and be reduced each year through 2032.

Theoharides said there would be hundreds of suppliers and distributors in the 13 states signing onto the initiative.

“Fuel suppliers would have to report their emissions and their compliance would be calculated based on how much emissions their fuel would produce when combusted,” she said.

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