There are several carbon tax proposals by Vermont lawmakers that would make heating and driving more expensive.

What Local Benefit?

We are often told that this will help local jobs and that we won’t export our money to oil producers. Rarely is it mentioned that the majority of our electricity comes from outside of Vermont and the single largest provider of power (Hydro Quebec) is from Canada. The Quebec energy conglomerate that owns 100% of the natural gas pipeline in Vermont and sells electricity to 4 out of every 5 homes in Vermont is a FOR-PROFIT corporation that sends its profits back to its shareholders in Canada.  Meanwhile, the local home energy companies that provide thousands of local jobs in Vermont and pay millions in taxes are being targeted for removal by this carbon tax scheme.

What about the roads?

Vermont sells about 300 million gallons of motor fuels annually which generate approximately $100 million in Vermont State excise taxes. These taxes directly fund road and bridge repair and construction in Vermont. Elon Musk didn’t invent a hovercraft.  We still need to maintain our highways for the newly incentivized electric vehicles. So whatever discount comes in the form of electric rate reduction MUST be taken back by the state of Vermont if the roads and bridge are to be maintained in the face of declining sales of gasoline and diesel fuel. Deduct these funds from the “revenue neutral” argument.

What about existing heating fuel taxes?  

Vermont already has a Sales Tax, Fuel Tax and Pollution tax on heating fuels which together raise another $10 to $15 million for the general fund, low income weatherization, and pollution mitigation. If these fuels are being replaced with electrons, the money will have to come from somewhere to replace it. Deduct these funds from the “revenue neutral” argument as well.

Tax Gives Canadian Pipe a Pass

The tax is on CO2 and NOT on other greenhouse gases, such as methane (also called natural gas). Why does this matter?   Because methane is 20 to 30 times more damaging as a greenhouse gas than CO2.  And that means this is an inequitable method of taxing emissions. And such inequity benefits the urban areas of Chittenden County that have access to a gas pipeline.  Rural Vermont will be paying a greater share of this carbon tax on their heating bill.

Carbon Tax Supports Coal Fired Air Conditioners

Vermont relies on the ISO NE mix for approximately a third of our electricity and the ISO NE mix is 70% coal/oil/gas in 2017 and is expected to be 76% coal/oil/gas in 2025. That reliance will likely increase as IF we move more of our energy system from liquid fuel to electrons. This tax scheme encourages the switch to electrons— but not all will be renewable or locally sourced— despite what carbon tax supporters claim.  This increases the dependence on out of state coal/oil/gas electric power plants which are highly inefficient due to line loss.

Energy Tax Discourages Energy Intensive Economic Development

It sounds obvious — but needs to be stated. Any energy intensive company in Vermont will have to consider whether to relocate to a state that does not have a tax on motor, process and heating fuels. Some of these carbon tax plans would make liquid fuels 25% to 50% more expensive. For those business owners considering moving to Vermont, even this conversation of a possible carbon tax puts us at the bottom of the list.  And while those sitting in the corner office on Lake Street in Burlington might be ambivelant to these costs, in rural Vermont we need that economic development, jobs, and property tax revenue to sustain our way of life.

How much will it cost to police the river?

Half the population of Vermont lives near the border of New Hampshire, Massachusetts, or New York. There are hundreds of ways to cross over.  Raising the cost of energy purchased in the our state will only provide an economic advantage to our neighbors, convincing businesses to move out of here as Vermonters to fill up over there.  According surveys by the National Association of Convenience Stores (NACS), three in five (63%) consumers say they would drive five minutes out of their way to save 5 cents per gallon.  Is there any doubt that Vermonters will cross over to save 40-cents per gallon?  Our bridges will be worn down with all the traffic….but there won’t be any money to replace them because the excise taxes will be collected in Concord— not Montpelier.  And what will stop people crossing back over into Vermont with trucks loaded with skid tanks of diesel, SUVs with 20 gallon jerry cans of kerosene, and cars with propane tanks. Out of economic necessity, there will be widespread carbon tax avoidance.  Vermonters who are living on the margins will figure out a way to keep their homes warm. But it won’t be safe.

So what is being done about reducing fuel consumption?

Plenty.  Vermont is unique in that it REQUIRES electric utilities to reduce liquid fuels used for transportation and heating among their customers (as per the 2015 Vermont Energy Act). Most utilities are complying with the Tier 3 mandate by incentivizing electric heat pumps and electric cars. There is a real sense of purpose amongst the anti-fuel lobby do to something new and bold every year. But there is little patience to allow existing programs to develop.

A carbon tax is a regressive scheme to harm those who choose to live outside of Burlington. Raising the cost of living in a cold, rural state is not a solution to anything but economic ruin.

Vermont Fuel Dealers Association

963 Paine Turnpike N.

Berlin, VT 05602


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Some lawmakers in Montpelier are determined to raise the cost of fuel used for heating and driving through a carbon tax.

The Essex Plan would create a new tax the fuel that 99% of Vermonters need to drive and 75% of Vermonters need to heat their homes. The legislation (found here) would hand the money over to electric utilities to lower rates in an attempt to convince more people to buy an electric car and electric heating system. While rural Vermonters would suffer, the Canadian companies that produce and sell electrons would benefit. The Essex Plan would also benefit the more urban Chittenden County, as it exempts the gas pipelin. Rural Vermonters that heat with oil and drive longer distances to work would be subsidizing electric bills in Burlington and driving up profits for shareholders in Quebec.

CLICK HERE to read the proposed legislation.

The fuel that keeps our homes warm and gets us to work is essential to our economy.

Governor Phil Scott who promised to veto any proposal that makes it more expensive to live and work in Vermont. Even carbon tax lobbyists recognize that these proposals aren’t going to pass this year and are simply “conversation starters.”

It is time to finish the conversation.