This summer, Washington State quietly discontinued funding for a rebate program that had provided millions of dollars to farmers facing unfair fuel surcharges as a result of the state’s climate legislation.
Rather than continue down the rebate path, lawmakers are looking to new legislation passed in May to simplify the exemptions for agricultural fuel users and haulers.
The recent legislation mandates the Department of Ecology to create an online map to direct farmers and haulers to retailers selling exempt agricultural fuel without the surcharges tied to the Climate Commitment Act.
Rep. Tom Dent, R-Moses Lake, emphasized that this new initiative will streamline the process for farmers and haulers.
Instead of first paying a surcharge at the pump and then attempting to navigate the rebate process, farmers can now avoid these additional costs right where they fill up.
“This should be an easier way for farmers to not pay a surcharge,” Dent stated.
A complex issue lies at the heart of the Climate Commitment Act, which requires companies like refineries to purchase pollution allowances to offset their carbon emissions.
Under this law, certain sectors—including agriculture, maritime, and aviation—are exempted from the cap on emissions.
Fuel utilized for trucking agricultural products on public highways is similarly exempt, which raises questions about compliance and the associated costs for farmers.
Following the introduction of the cap-and-trade program in 2023, numerous complaints regarding the fuel exemption surfaced.
Farmers highlighted challenges in verifying that diesel fuel was being used for exempt purposes.
The existing procedure, requiring exempt fuel buyers to present certificates to fuel sellers, proved cumbersome and ineffective.
Farmers struggled to identify which fuel distributors would accept exemption certificates, leading to confusion and frustration in the marketplace.
Reports indicated that fuel distributors were passing on costs related to pollution allowances, with increases reaching as high as 70 cents per gallon.
In response, the Department of Ecology formed a workgroup to address these issues throughout 2023.
However, farmers and truckers reported little progress, spurring the Washington Trucking Associations and the Washington Farm Bureau to seek legal action against Ecology’s regulations.
The ongoing dispute eventually reached the Washington State Supreme Court this week.
For the upcoming year, the Legislature had allocated $30 million to provide rebates to farmers and transporters who had unjustly incurred surcharges related to the climate law.
The Agriculture Support Program, administered by the Department of Licensing using proceeds from the Climate Commitment Act, began in August 2024 but ended on June 30, 2025.
Farmers and transporters were able to claim rebates for eligible fuel purchased between January 1, 2023, and December 31, 2024.
The program received 2,744 applications, awarded $7,887,820 in rebates, and processed payments by the end of June.
According to the Department of Licensing, the total expenditure for the program amounted to $9.4 million, with $20.6 million reverting back to the climate fund.
Despite Dent’s advocacy for the continuation of the rebate program, budgetary decisions led to its discontinuation.
House Bill 1912, authored by Dent, aimed to extend the rebate program into the 2025-27 budget period.
Although the bill received overwhelming support—passing 94-2 in the House and 49-0 in the Senate—the final budget omitted funding for it.
The House had initially allocated $3 million to maintain the program, but the Senate chose not to include any funding, resulting in a compromise that eliminated the rebate program entirely.
As a result, applications for the rebates closed on June 2, and all received claims were fully processed by the end of the month.
With the conclusion of the rebate program, the Department of Ecology proceeded to develop and implement the online directory of retailers selling exempt agricultural fuel that excludes climate-related surcharges.
This online resource, listing retailer names, addresses, and other relevant details, aims to assist farmers and haulers in finding compliant fuel sources moving forward.
Despite these changes, Rep. Dent indicated that the discussion surrounding the impact of the climate law on agricultural businesses will continue.
As the situation evolves, stakeholders remain vigilant in addressing the ongoing challenges posed by Washington’s climate policies.
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