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Tax Credits & Sustainability in Trucking
As we progress further into the 21st century, it has become more and more significant to us as a society to pay attention to the way we take care of our planet. Generations new and old alike have succeeded in discovering ways for humans to reduce their impact and protect the resources that Earth still provides us. How can we apply this to the world of transportation?
Running in line with the research determined by the Rhodium Group, the results of a study came out roughly a year ago alongside a tax credit extension package being passed through policymakers. The article considers different strategies to be employed by the U.S. to help advance clean energy legislation. For example, if drivers were to exchange their gas-reliant vehicles for their electric counterparts, that change alone would “nearly double the number of electric vehicles on the road through 2025.”
The research states that, “By 2030, wind and solar could supply up to 31% of total US electricity.” The article acknowledges that although the current American political situation likely will not allow for much in the way of “comprehensive climate policy,” small changes are still a very real possibility and may present some opportunities that those in the trucking industry could take advantage of. Some of the proposed target tax edits would be “A credit of up to $7,500 for each new electric vehicle sold (Section 30D),” and, “A suite of tax credits for advanced biofuel producers and blenders (Sections 40, 40A and 6426).”
Shipping sustainably with green trucks
There are some that are hesitant to invest in the difference between electric and gas-powered automobiles, being understandably intimidated by the higher price tags often associated with going green. However, with the reality being that “the transportation sector has been the US’s top-emitting sector since 2016,” it is important to emphasize that “Rapid technology development has already lowered EV prices through steady reductions in battery costs by over 80% since 2010.” If America finds itself interested in becoming a leader in the international community for adopting sustainable practices, the time to start looking closely at these initiatives should be now. Legislation that relaxes policies trying to go green and reducing the costs to do so will prove most effective in providing incentives for companies to help decarbonize the U.S. The article even suggests replacing gasoline with low-carbon substitutes (especially conventional ethanol) to ease the process of transitioning.
Green trucking on a global scale
Looking at it from a global standpoint, the proposed tax credits “could fill up to 25% of the gap between US emissions under current policy and its Paris commitments.” Separate studies conducted by the EEA (European Economic Area show that thanks to their efforts, “[a]verage CO2 emissions of new passenger cars in the EU has fallen steadily over recent years, decreasing by around 30% since 2001.”
“The European Commission’s evaluation study suggests that the CO2 Regulation on cars is likely to have accounted for 65-85 % of the reductions in tailpipe emissions achieved following its introduction.”
Statistics like these show that other countries have seen the importance of sustainability and are making genuine efforts to reach goals that they are setting in that aim. Paolo Gentiloni, the European Commissioner for Economy, stated earlier this year that, “Taxation will have an essential role to play in delivering on our climate commitments.” On the subject of environmental taxes, Gentiloni believes that they “can encourage more responsible behavior and help offset the costs of the environmental transition.”
Earlier this year in March, Gentiloni and his commission outlined a set of laws that intend to make the entire continent eliminate their net carbon emissions by 2050. While governments are figuring out how quickly they want to join the race to save Earth, it is up to companies to act quickly and make use out of the legislation being pushed forward. By pushing for and accepting tax credits, those in logistics can upgrade their technology at reduced costs through investing in better infrastructure.