Rhode Island would be first state to impose carbon tax; trucking industry braces for higher costs

Carbon TaxA bill currently under consideration by the Rhode Island legislature would make the Ocean State the first to impose a “carbon tax” on fossil fuel production. This is important news for the trucking industry because if enacted as written it means gasoline and diesel fuel producers will be hit with a new tax which will be passed along one way or another to long haulers.

Meant to accelerate the state’s transition from oil, gasoline, and natural gas to local renewable energy like solar and wind power, it would do so by taxing, among other products, gasoline and diesel fuel. The bill, known as the Clean Energy Investment and Carbon Pricing Act of 2017, imposes a $15 tax on each ton of carbon dioxide or other greenhouse gasses emitted from the burning of a fossil fuel.  Gas and diesel retailers would either have the fee paid by their distributors or collect it at the pump.

Either way, that cost will be coming out of truckers’ pockets.

Meant to be proactive against the effects of climate change, the bill’s intent is to “Create a clean energy and jobs fund to foster innovative practices, which will strengthen Rhode Island’s position in advancing efficient use of energy, make Rhode Island a nationally recognized leader in energy efficiency, stimulate job creation, and enhance innovation-based economic growth.”

These are lofty goals. State Senator Jeanine Calkin of Warwick, sponsor of the bill, called it “our generation’s moonshot and we need to take steps to do it right now.”

Providence Rep. Aaron Regunberg, sponsor of the bill in the state house, added, “The need for this legislation has never been more critical.”

Will it pass? That’s hard to say, but the tendency of politicians to draft legislation that chips away the trucking industry’s bottom line isn’t going away anytime soon.

The Rhode Island carbon tax is just one of many trucking and transportation related issues that we follow closely here at Sinclair Risk. We couldn’t do our job if we didn’t! We pride ourselves on our deep industry knowledge and our proven track record of helping clients mitigate risk and keep their losses low.

Sinclair’s proprietary Risk Safeguard Advantage is a financial risk management system designed to dramatically reduce organizational exposures and premium costs while consistently improving productivity and morale. Elements included for our trucking clients include a driver incentive program, driver qualifications review program, defensive driver training, and expert help on responding to OSHA citations.

Interested in learning more? Check out my recent white paper, “How to avoid getting run over by a massive fleet insurance price increase.”

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Jon Belek