Maryland’s Transportation Funding Proposal Hurting Clean Diesel

Maryland Gov. Martin O’Malley was informed last Wednesday by the Diesel Technology Forum (DTF) that his new transportation funding proposal for the state would create tax penalties for diesel car owners.

The DTF said this funding proposal will unfairly penalize 280,000 Maryland diesel car and light duty truck owners by 2020.

The diesel tax inequity was outlined for Gov. O’Malley and legislative leaders in a letter from Allen Schaeffer, the executive director of the DTF.

“Thanks to tremendous advancements, diesel can no longer be viewed as just a fuel used by commercial truckers,” Schaeffer wrote in the letter. “Clean diesel vehicles are quickly becoming widely available and popular. Thanks to their inherent energy efficiency, diesel cars and trucks achieve 20 to 40 percent better fuel economy than a comparable gasoline vehicle and achieve roughly 10 to 20 percent reduction of greenhouse gases along with near zero emissions of smog forming pollutants. Replacing 15 percent of the fleet with diesels would reduce greenhouse gas emissions by 190 million tons over the estimated vehicle lifetime and save 17 billion gallons of fuel.”

Schaeffer added: “We are concerned that the fuel tax disparity included in your proposed transportation funding package could have the unintended consequence of discouraging the purchase of fuel efficient clean diesel vehicles that are already reducing fuel consumption and improving air quality throughout Maryland. We wanted to be sure you were aware of this matter and hope that clean diesel technology is not treated unfairly in the state.”

Clean Diesel Car and Pickup Truck Sales in U.S. Projected To Triple by 2020.

“Maryland and the United States are on the midst of historic increases in clean diesel vehicle sales which many analysts predict will more than triple the number of diesel cars and light duty trucks by 2020,” Schaeffer said.

According to R.L. Polk and Associates, there were 93,958 diesel vehicles in Maryland in 2012 compared to 59,202 hybrid vehicles.

Schaeffer’s letter also highlighted a previous statement about the benefits of clean diesel automobiles from U.S. Transportation Secretary Ray LaHood: “If one-third of all vehicles in the USA were already clean diesel vehicles today, we would be saving 1.4 million barrels of oil every day. That’s the same amount of oil we import from Saudi Arabia, so this is a big deal.”

The following is the content of the DTF Letter sent to Gov. O’Malley:

 

March 13, 2013


Dear Governor O’Malley:

 

On behalf of the Diesel Technology Forum, I would like to highlight the fact that your transportation funding package substantially widens the tax disparity between gasoline and diesel fuel. This growing disparity penalizes residents who drive fuel efficient clean diesel passenger vehicles and discourages investments in clean diesel cars in the future. We understand that your proposal widens the difference between the state tax on gasoline and diesel from about 1 cent to 6 cents per gallon resulting in a substantial disparity in the price at the pump. A typical owner of a diesel car or truck would pay more in state fuel tax than a driver of a gasoline powered vehicle creating a disincentive to purchase diesel vehicles.

Thanks to tremendous advancements, diesel can no longer be viewed as just a fuel used by commercial truckers. Clean diesel vehicles are quickly becoming widely available and popular. Thanks to their inherent energy efficiency, diesel cars and trucks achieve 20 to 40 percent better fuel economy than a comparable gasoline vehicle and achieve roughly 10 to 20 percent reduction of greenhouse gases along with near zero emissions of smog forming pollutants. Replacing 15 percent of the fleet with diesels would reduce greenhouse gas emissions by 190 million tons over the estimated vehicle lifetime and save 17 billion gallons of fuel.

As U.S. Transportation Secretary Ray LaHood stated on May 31, 2011: “If one-third of all vehicles in the USA were already clean diesel vehicles today, we would be saving 1.4 million barrels of oil every day. That’s the same amount of oil we import from Saudi Arabia, so this is a big deal.”

In fact, clean diesel cars and trucks are growing in popularity in Maryland owing to their fuel efficiency and lower emissions. There are just under 94,000 registered diesel cars, light duty trucks and vans in Maryland. This number will increase to almost 280,000 registered diesel vehicles in the state by 2020 as industry analysts project diesel sales to triple.

We are concerned that the fuel tax disparity included in your proposed transportation funding package could have the unintended consequence of discouraging the purchase of fuel efficient clean diesel vehicles that are already reducing fuel consumption and improving air quality throughout Maryland. We wanted to be sure you were aware of this matter and hope that clean diesel technology is not treated unfairly in the state.

It’s also important to consider diesel’s importance to Maryland’s economic and transportation sectors. More than 13 million gallons of diesel fuel powers farm equipment in Maryland and helps support 12,000 farms that cover one-third of Maryland. In 2008, direct construction spending contributed $21.6 billion to the state GDP and employed 180,000. The industry relies on 30,657 pieces of equipment, most of which is powered by diesel engines and fuel. 30 million tons of cargo flowed in and out of the Port of Baltimore valued at $41.9 billion. Much of the equipment used to keep this cargo moving, from cranes, yard tractors, trucks, trains, ocean going vessels and tug boats, are powered by diesel engines. We have included a Fact Sheet outlining the importance of diesel to the state’s economy.

The Diesel Technology Forum is a non-profit educational association representing leaders in clean diesel engines, vehicles, fuels and components. We are happy to provide further information and insights upon request.

 

Thank you,

Allen Schaeffer

 

CC: Senate President Thomas V. Mike Miller, Jr.

 House Speaker Michael E. Busch

Senator Edward J. Kasemeyer, Chairman Budget and Taxation Committee

Senator Nathaniel J. McFadden, Vice-Chairman Budget and Taxation Committee

Delegate Sheila Hixson, Chairwoman Ways and Means Committee

Delegate Frank Turner, Vice-Chairman Ways and Means Committee