August 2009 – AggBeat
If the carbon fee is approved, beginning in 2010, about 250 businesses in California that make, sell, or import gasoline, diesel, natural gas, and coal would be charged roughly 12 cents per ton of carbon dioxide that both they and their customers emit into the atmosphere. Cement plants would be subject to the fee because the chemical process they use to make cement produces greenhouse gases. The average cement plant would be charged about $200,000 a year. The charge would drop to 9 cents per ton of carbon dioxide in 2014.
While other industries might pass their costs along to consumers, a cement plant is unlikely to raise its prices in a competitive global market, Dorothy Rothrock, vice president of government relations at the California Manufacturers & Technology Association, told the news agency. “Every additional cost goes right against the bottom line. It’s not that there’s any wriggle room or you can absorb it. A $200,000 fee — that’s four employees.”
Unless they also produce cement, aggregates producers won’t see a huge impact from this fee. “So far, the threshold of emissions for determining who would pay the fee is high enough that most of our [aggregates] sites would not be impacted,” Gary Hambly, president of California Construction and Industrial Materials Association (CalCIMA), tells Aggregates Manager. “Utilities will need to recoup the cost, but it will be a relatively small amount on any single bill. The bigger issue is how they set and distribute the caps on emissions.”
CARB has decided to delay making a decision on the carbon fee. According to the Washington Examiner, the decision to delay came after several electricity providers expressed concerns that California might inadvertently level a charge on energy that would violate federal laws.
Cap and Trade. The “Cap and Trade” global warming bill making its way through Congress, sponsored by U.S. Representatives Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), would limit the emission of greenhouse gases said to cause global warming. The aggregates industry is not a major greenhouse gas emitter, but, according to a special legislative update from the National Stone, Sand & Gravel Association (NSSGA), this bill would drive up energy costs to businesses and consumers without commensurate reductions in carbon emissions. It would raise the price of highway fuel through a hidden tax on the carbon present in the fuel. The Congressional Budget Office estimates that this bill will raise the price of gasoline by 77 cents per gallon over the next decade.
“The federal bill will have a massive impact on fuel and utility costs,” CalCIMA’s Hambly says. “Again, most of our [aggregate] facilities will be under the level that will require direct capping of emissions, but the utilities that serve our industry will be severely impacted and will need to pass on those costs.”
Just how much those pass-on costs will be is unknown at this time, but will surely have an effect on aggregates producers whose fuel budgets can be quite large.
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