The Washington Supreme Court has ruled that the state’s Department of Ecology properly carried out the Climate Commitment Act, rejecting claims from the Washington Farm Bureau that farmers were not receiving the fuel tax relief intended by lawmakers.
In a unanimous 9-0 decision issued on June 25, the court said the Department of Ecology does not have the legal authority to control fuel prices or stop fuel suppliers from adding carbon-related surcharges to fuel sold to farmers. The ruling ends the Farm Bureau’s legal challenge against the agency’s implementation of the state’s cap-and-trade program.
The lawsuit focused on fuel costs paid by farmers under Washington’s Climate Commitment Act, which became law in 2021. The law places a price on carbon emissions by requiring fuel suppliers to purchase carbon allowances. Those added costs are often passed on to consumers through higher gasoline and diesel prices.
State lawmakers included an exemption for fuel used in farming and for transporting agricultural products. However, the Washington Farm Bureau argued that many farmers still pay higher prices because they buy fuel at retail gas stations where the surcharge remains included in the final price.
The Farm Bureau said some agricultural businesses can purchase exempt fuel directly from distributors, but many smaller farms depend on local service stations. According to the organization, these farmers continue paying higher fuel prices despite the exemption written into state law.
Writing for the court, Justice Raquel Montoya-Lewis said the Department of Ecology cannot require private fuel suppliers to remove carbon surcharges because the agency does not have authority over retail fuel pricing. The ruling stated that nothing in the Climate Commitment Act gives the department the power to force companies to stop adding those extra charges.
The court also concluded that the law does not directly provide tax relief to farmers. Instead, the exemption applies to fuel suppliers, who may choose to claim it when selling qualifying fuel. The justices found that the law does not prevent suppliers from including additional charges in fuel prices paid by agricultural customers.
Following the decision, Washington Farm Bureau President Rosella Mosby expressed disappointment. She said the ruling leaves farms and ranches facing higher fuel expenses at a time when many agricultural businesses are already dealing with rising operating costs and financial pressure.
The Department of Ecology welcomed the court’s decision. Agency officials said they have worked with fuel suppliers to help them understand how the agricultural fuel exemption should be applied. The department said it remains committed to helping eligible farmers obtain exempt fuel where available.
To support farmers, the Department of Ecology has created a directory listing 93 fuel stations across Washington that sell surcharge-free fuel to qualified agricultural customers. Officials encourage farmers to contact participating stations before visiting to learn what documents are required to receive the exemption.
Representatives of the petroleum industry argued during the case that it is not practical to track every gallon of fuel that will eventually be used on a farm. Industry officials said fuel moves through complex distribution systems, making it difficult to identify every final agricultural customer before fuel reaches retail stations.
Based on the latest state carbon allowance auction results, the cap-and-trade program is estimated to add about 52 cents per gallon to gasoline and approximately 64 cents per gallon to diesel fuel. Those added costs have become a major concern for farmers who depend heavily on fuel for planting, harvesting, irrigation, and transporting crops.
The legal challenge was argued before the Supreme Court in October. The final decision was delayed while justices discussed whether to publicly recognize a law clerk who helped prepare the opinion. A majority decided not to include that recognition, although three justices supported naming the law clerk in a separate concurring opinion. Another justice expressed concern that discussing internal court deliberations could create confusion about the judicial process.
The Washington Cap and Trade ruling provides legal clarity on how the Climate Commitment Act is being enforced. While the Supreme Court upheld the Department of Ecology’s actions, many farmers say they will continue seeking legislative solutions to reduce fuel costs and ensure agricultural exemptions provide the financial relief they believe lawmakers originally intended.
