VICTORIA -- With the addition of renewable fuels to B.C.’s diesel and gasoline pools in 2010, the provincial government has decided to relax the controversial carbon tax by 5 percent.

On Jan. 1, 2010 the carbon tax rate on diesel drops from 4.04 cents per litre to 3.84 cents per litre and on gasoline from 3.51 cents per litre to 3.33 cents per litre.

On July 1, 2010 the carbon tax rate will increase to 5.11 cents per litre (adjusted from 5.38 cents per litre) for diesel and 4.45 cents per litre (from 4.68 cents per litre) for gasoline.

The government determined the annual rate increase when the carbon tax first became effective and it will continue until July 2012. Yearly increases for diesel, adjusted for the renewable fuels, will be: July 1, 2011 --¬ 6.39 cents per litre, instead of 6.73 cents per litre; and July 1, 2012 --¬ 7.67 cents per litre, instead of 8.07 cents per litre.

While the tax reduction is welcomed by the trucking community, the B.C. Trucking Association continues to advocate that the government return a portion of the carbon tax to the industry in the next budget, in the form of incentives to encourage wider adoption of fuel-efficient equipment and technologies.