Written on: January 9, 2024 by Kris Delair
What are you seeing from a public policy standpoint on climate issues in New York State as it relates to home heating specifically?
In 2019, New York State enacted the Climate Leadership and Community Protection Act (CLCPA), which is calling for 70% renewable electricity by 2030 then 100% zero emission electricity by 2040, as well as a 40% reduction statewide of greenhouse gas emissions by 2030, an 85% reduction of greenhouse gas emissions by 2050 and then net zero statewide by 2050.
In the heating sector, we were able to get our biodiesel blending standard, which had been effect downstate for some years, enacted statewide with B5 on July 1st, 2022. However, that was delayed until enforcement began in July 1st of 2023. We will be going to a statewide 10% blend by 2025 and a 20% blend by 2030. We have been pushing for a renewable diesel, in addition to biodiesel, to be enacted into that blending standard. It really should encompass all liquid renewable fuels.
We have been getting pushback, however, from [some] environmentalists who believe that all combustibles are bad for the environment
We have been working very hard to educate our lawmakers and the public about what our fuels can do in reducing carbon. We have been decarbonizing for many years and we can decarbonize faster than anybody at less expense.
We also know that New York is contemplating enacting a cap and invest program and it would be on all fuels, from heating to transportation. They are currently trying to determine what the standards will be. They’re also trying to fit it into that mandate of reaching that 40% reduction by 2030, which is an extremely fast time line. As you know, California took their time to implement a program that rolled out slowly. Prices have increased but it has taken years. They were looking for stability and created a program that would have the least negative economic impact on businesses as possible.
When Washington State rolled its program out, parties did not know what the cost of allowances would be. They didn’t hold their first auction until after the compliance began. They set their cap at a 7% reduction in emissions in the first year, which is very high. Prices for those allowances went from $20 an allowance to $60 within six months’ time and increased the price for all goods and services. They’re in a mess in Washington right now because they were trying to roll out this program too quickly.
A cap and invest program needs time to allow the market to adapt and make investment. And like I said, by setting time frames too quickly, they’re not going to allow that.
That’s still in the discussion stage right now?
Right. What came of last legislative session is that New York Department of Environmental Conservation (DEC) has been charged with implementing a cap and invest and we’ ll see more of that come out in the beginning of 2024. Our job is going to be to try to figure out a way and make suggestions to do it in a responsible way—one that is not going to crush people and crush small business in New York.
Getting back to the fuel standard you have now. Is this for heating and transportation?
It’s for heating fuel only. It’s not on the transportation side yet.
What is the timetable for renewable blends?
B5 is the requirement across the State right now. In 2025 we’ll move to B10 and to B20 in 2030..
Did the B-5 have any negative or positive impact especially upstate—downstate has had that requirement for many years now.
The retailers are not having any issues. Our biggest challenge was some wholesale suppliers who weren’t completely ready when the mandate was supposed totake effect. People were doing upgrades to their terminals, and because of COVID-19 and various other things, there were supply chain issues, etc.
One supplier in the North Country exited the market because they are not doing biodiesel. The day before the standard was to take effect the DEC issued and discretionary enforcement waiver, meaning they were not going to police compliance. This delayed getting the standard functioning for about a year.
Is that waiver still in effect?
No, everyone in the state must be delivering a minimum of B5 today with a jump to B10 by mid-2025.
How do the retailers in NY feel about this?
The ones involved with our associations have known about this and were prepared. We did a Bioheat® tour across the state to bring this story everywhere, from technical, marketing, operations to public policy. We really made a strong effort to get them ready. There has been some grumbling from those not involved but the adoption has been quite easy. We have seen a lot of retailers jump right in, skip B5 altogether and go right to 10%.
One of our members in the central New York region jumped right into a 10 % blend. Many of their customers have outdoor tanks and they had no issues— but they were very smart. They talked to their additive company and they made sure that the fuel was additized properly for cold conditions and so, no issues.
As I said, if people are playing it smart, if they’re listening to the education that’s provided, they are not having issues. I do know however, that we are going to have to continue to be proactive about the continuing education process.
Tell us more about New York’s Climate Leadership and Community Protection Act.
It is calling for a statewide 40% reduction in greenhouse gases by 2030, on all sources.
In this past legislative session, a bill was passed requiring all-electric new construction, meaning, anything below seven stories has to be zero emissions, that is all electric, in 2026. Then it included construction above seven stories in 2028.
So, pretty much every residence and every small business built in the state will have to be electric, zero emissions in 2028?
Yes. There are some exceptions, like mobile homes. There has to be a grid feasibility study to be certain it can handle that. There are carve-outs for restaurants and things like that.
There’s nothing with existing construction. So, if something happens in your boiler or your furnace, and it needs to be replaced, there’s nothing saying right now that you have to switch to all electric. Now, is that something in the future we’re going to be fighting? Yes, it is likely. We’re certainly seeing that in other areas and they did try to include that in the bill. It was taken out because there was a lot of pushback on it.
In 2027, when all under-seven story building new construction needs to be zero carbon, which really means heat pumps, there is no provision that you can’t keep your liquid fuel fire system as long as it meets the fuel standard?
That is correct.
How do you see the future of liquid fuel heating in NY, especially if you can get renewable diesel into your standard?
I believe liquid heating fuels will have a sustainable and viable future through the increased blending of renewables such as biodiesel and renewable diesel. The more liquid renewable fuels we have the better off the industry will be, but I think we have our work cut out for us and it’s because of that misconception that all combustibles are potentially bad.
We need to actively be working to educate our lawmakers, environmentalists and public that we are decarbonizing now we are going to continue to decarbonize. What we’re looking at and what we’re asking for is a well-rounded, diverse energy plan. To have that, you need to include all energy sources. It doesn’t make sense to keep looking at just one energy source, such as electricity.
I think a lot of people agree that it’s more important to decarbonize today instead of waiting 10 or 20 years down the road when infrastructure is built out. We have the product, we have the customers, we have the infrastructure—everything’s in place. If it’s truly about decarbonization, then that’s us all day long. ICM