Advanced Biofuels USA has gone public with a new idea for capturing externalities of non-renewable fuels for funding needed research – a Non-Renewable Carbon Fuel User Fee. The organization made the announcement during the Congressional Renewable Energy and Energy Efficiency EXPO + Forum that took place in Washington D.C. on July 9, 2015.

“If we’re serious about reducing Climate Change caused by Green House Gases, then we need serious actions,” said Joanne Ivancic, executive director of Advanced Biofuels USA. In her presentation, Ivancic laid out the salient points of the plan. “The first steps are including the price of Green House Gas (GHG) effects in non-renewable carbon fuels and committing serious money to renewable fuel research and infrastructure development.”

The Advanced Biofuels USA proposal uses lower priced renewable fuels to drive the consumer market. When the true costs of fuel become apparent, they argue, consumers will demand higher renewable portions of fuels for transportation, power and heat. The fee, which they base on current scientific estimates of climate change effects and mitigation costs, applies to only the non-renewable portion of liquid and gas used for transportation and stationary source combustion.

The fee would be between $50 and $100/ton of non-renewable carbon and translates into only 3.5 percent to 7 percent increases in current transportation fuel prices; or, less than the volatility we commonly experience in gasoline prices. The fee, Ivancic explained, will disappear as lower priced renewable fuels take over the market. Revenues from the fee will be used for two purposes:

• Renewable Fuel R&D: An immediate Apollo type program should be funded with between 50% and 60% of the fees. It should be administered by the National Science Foundation (NSF) and be focused on getting affordable non-food biomass fuels and gases into the pipeline in less than seven years.
• Renewable Fuel Infrastructure: The upgraded fuel pumps, decentralized processing/distribution modules, and temporary rebates to people not able to afford the initial lack of renewable fuel would be funded with between 40% and 50% of the fees. These programs would be run by the states.

Ivancic said the proposal will spur investment, innovation, installation and use of renewable choices. “Not only will we see a rapid reduction in GHG emissions,” she said, “but more important, a sustainable renewable fuel industry will create good jobs for Americans in research labs, rural towns, and urban manufacturing plants.”

Collection of this user fee would not require new bureaucracies. Existing consumer point-of-sale fuel and utility tax collections systems (for natural gas) would be used.