Fong Moves to End California's Hidden Climate Tax on American Consumers

WASHINGTON, D.C. - Last week, Congressman Vince Fong (CA-20) introduced a Congressional Review Act (CRA) resolution to overturn the EPA's 2023 authorization of amendments to the California's Air Resources Board's (CARB) At-Berth Regulation. Senator Dan Sullivan (R-AK) is leading an identical Senate companion resolution.

California's Ocean-Going Vessels At-Berth regulation imposes costly and unworkable mandates on ports, shipping companies, and critical industries, including requirements for technology that is not yet viable. These regulations threaten the reliable operation of California's refineries, increase the cost of moving goods through our ports, and ultimately drive-up prices for consumers. They also make California's ports less competitive, putting cargo, jobs, and private investment at risk as businesses look to move operations to states with less burdensome regulations.

This action was instituted in 2020 by CARB, an unelected state agency, and approved by the Biden Administration's Environmental Protection Agency (EPA) in 2023. The mandate worsens California's affordability crisis and harms California's fuel supply that is already under severe strain. Additionally, after this EPA authorization, other states across the country may choose to follow in implementing this unfeasible rule which will harm the U.S. economy.

"At a time when California families are already paying the highest gas prices and facing one of the highest costs of living in the nation, the last thing they need is another costly mandate from Sacramento," said Congressman Vince Fong. "This onerous regulation will increase shipping costs, raise prices for consumers, and put California's ports, businesses, and workers at a competitive disadvantage. With refinery closures already straining our fuel supply, this unworkable regulation only adds more uncertainty while relying on technology that isn't ready. We can improve air quality without making California less affordable or driving jobs and investment out of our state."

"I am glad to partner with Rep. Fong on this effort, because West Coast supply chains don't stop at state lines," said Senator Sullivan. "When California imposes onerous and costly mandates, hard-working Alaskan families pay the price. Nearly half of Alaska's crude oil is processed in California refineries. By restricting which ships can call at its ports and driving up operating costs for those that do, California is artificially inflating costs across our entire region. Alaskans shouldn't be forced to foot the bill for California's abuse of its Clean Air Act waiver authority."

Background

California ports handle roughly 40% of the nation's containerized imports, meaning California's regulation on docked vessels doesn't just affect California. It raises costs for consumers in all 50 states.

The CARB At-Berth Regulation requires ocean-going vessels docked at California ports to cut diesel emissions by plugging into the electrical grid, installing state-approved technology, or paying into a state remediation fund. Ships that cannot comply face penalties of approximately $50,000 per vessel per day. Those costs are passed onto freight rates, wholesale prices, and ultimately what consumers pay at checkout.

The Biden Administration's EPA authorized CARB to expand this regulation to ocean-going tankers in October 2023 without submitting it to Congress for review. The Congressional Review Act gives Congress the authority to nullify that authorization with a majority vote. Congress used this exact mechanism last year to strike down three EPA waivers behind California's electric vehicle mandates.

"We applaud Representative Fong for leading this effort to overturn California's Ocean-Going Vessels at Berth mandate. California ports handle roughly 40% of U.S. containerized imports and significant volumes of crude oil and refined fuels. As a result, the costs of this mandate would ripple through supply chains and energy markets, raising prices for American families and consumers. Congress must act to stop California from imposing unlawful, unachievable policies that raise costs for every American and threaten U.S. energy security along our coasts," said Chet Thompson, American Fuel & Petrochemical Manufacturers (AFPM) President and CEO.

"California should not be allowed to make an already constrained West Coast energy market more costly and less reliable," said Kristin Whitman, Senior Vice President of Federal Relations, American Petroleum Institute. "By imposing burdensome new requirements on maritime operators, this rule threatens to disrupt the integrated supply chain that moves crude and other vital energy supplies through the region. We welcome Congressman Vince Fong's resolution to overturn this misguided mandate and protect consumers from further supply constraints and higher costs."

"For years, CARB's At-Berth Regulation has created significant challenges and uncertainty for California refiners and importers at a time when stabilizing the industry is a top priority," said Jodie Muller, President and CEO, Western States Petroleum Association (WSPA). "Policymakers and regulators have been unable to solve the many problems related to the At-Berth Regulation and Congress has decided that it is time to move forward. California consumers should not have to bear the brunt of a further constrained fuel supply."

"Manufacturers strongly support the introduction of H.J.Res.210 by Rep. Vince Fong to nullify the At-Berth Rule," said Chris Phalen, Vice President of Domestic Policy, National Association of Manufacturers. "The rule injected needless uncertainty into the regulatory process by granting a federal waiver for this sweeping state regulation. A patchwork of conflicting state laws drives up costs and undermines manufacturing growth across America, and we welcome this legislation to ensure a more straightforward, standardized regulatory process."

Rep. Fong's CRA is endorsed by the American Fuel & Petrochemical Manufacturers (AFPM), American Petroleum Institute (API), Western States Petroleum Association (WSPA), and National Association of Manufacturers (NAM).

To view the CRA text, click here.