WASHINGTON - Today the Senate Environment and Public Works Committee is holding a hearing on renewable fuels, and although not physically a witness at the hearing, NACS submitted comments to help committee members identify strategies that will overcome existing hurdles and achieve the objectives of the Renewable Fuels Standard (RFS).

"The RFS was developed to promote energy independence, reduce U.S. reliance on fossil fuels and benefit the environment. It set ambitious goals and focused on the materials used to produce our fuel. It did not, however, take into consideration how the fuel would be delivered into the consumer€™s vehicle. The distribution and retail infrastructure was largely ignored in favor of broader policy issues, yet it is precisely this component of the system that is presenting some of the greatest obstacles to successful implementation of the program," NACS wrote.

NACS outlined three core challenges that are limiting the retail availability of new renewable fuels:

• Compatibility
• Misfueling
• General Liability Exposure
• Market Acceptance

In conclusion, NACS offered four options available to Congress to help the market overcome these challenges.

• First, because UL will not retroactively certify any equipment, perhaps Congress could authorize an alternative method for certifying legacy equipment. Such a method would preserve the protections for environmental health and safety, but eliminate the need to replace all equipment simply because the certification policy of the primary testing laboratory will not re-evaluate legacy equipment. NACS was supportive of legislation introduced in the House last Congress as H.R. 5778. This bill directed the EPA to develop guidelines for determining the compatibility of equipment with new fuels and stipulates equipment that satisfied such guidelines would thereby satisfy all laws and regulations concerning compatibility.
• Second, Congress can require EPA to issue labeling regulations for fuels that are not authorized for all vehicles and ensure that retailers who comply with such requirements satisfy their requirements under the Clean Air Act and protect them from violations or engine warranty claims in the even a self-service customer ignores the notifications and misfuels a non-authorized engine. H.R. 5778 also includes provisions to achieve these objectives.
• Third, Congress can provide market participants with regulatory and legal certainty that compliance with current applicable laws and regulations concerning the manufacture, distribution, storage and sale of new fuels will protect them from retroactive liability should the laws and regulations change at some time in the future.
• And finally, if Congress takes action to lower the cost of entry and to remove the threat of unreasonable liability, more retailers may be willing to take a chance and offer a new renewable fuel. By lowering the barriers to entry, Congress will give the market an opportunity to express its will and allow retailers to offer consumers more choice. If consumers reject the new fuel, the retail €" like the NACS member in Oklahoma €" can reverse the decision without sacrificing a significant investment.

NACS is also submitting comments for a hearing this Thursday in House Committee on Small Business on the effect fuel prices have on small businesses.