LANSING, MI — A Republican state senator has introduced legislation that would create a tax credit for retailers who sell alternative fuels in an effort to help expand locally produced fuel options.
Sen. Kevin Daley, R-Lum, who chairs the Senate Agricultural Committee, said Tuesday Senate Bill 0814 would assist Michigan in providing cleaner, more affordable options for Michigan drivers using biofuels produced with renewable energy from Michigan farms.
“Biofuels are a major economic engine for rural communities across Michigan, and they help position our state to rely less on foreign oil,” Daley said Tuesday in a statement. “This legislation will help accelerate Michigan’s biofuel production and ultimately provide cleaner and cheaper fuel that is locally grown and produced.”
The legislation would create a tax credit for retailers who sell alternative fuels. The bill would create a five-cents-per-gallon tax credit for the sale of E-15 fuel and a .085-cent-per-gallon for the sale of E-85 fuel. Both of the credits would expire after five years unless renewed by the Legislature.
“The goal of this legislation is to create an incentive for gas stations to offer higher ethanol blends, which will help reduce emissions, benefit Michigan corn farmers, and offer drivers additional, more affordable options at the pump,” Daley said. “This legislation would unlock the potential to grow Michigan’s biofuel production, create jobs, and ultimately provide cleaner and cheaper fuel that is locally grown and produced.
Farming groups supporting the bill said it will stabilize growing markets for Michigan farmers, who supply the corn for the state’s ethanol plants.
Ethanol is a grain-based alcohol which is controversial among renewable fuel advocates and environmental groups. Its supporters argue it reduces reliance on foreign oil needed to make gasoline. Opponents say decades of federal ethanol subsidies have benefitted American farmers, but have failed to reduce the risks the biofuel poses to the climate.
“We support Senator Daley’s bill because it will provide additional opportunities for local corn producers to make some money, clean up the environment and likely give a higher quality product to the consumer public,” said Bob Thompson, President of the Michigan Farmers Union.
Family farms are becoming more difficult to operate and compete as the pressure to get big or get out have increased for the last several decades, particularly in the mid-Michigan area, Thompson said Tuesday in an interview with MLive. The proposal would be one way to help, he said.
“We need to provide our family farms with as many different opportunities to try and turn a profit locally,” Thompson said. “This would be one way to enhance the production of ethanol by offering this tax incentive to the suppliers to put in their pumps, so the consuming public has an opportunity to make a choice between products.”
The alternative fuel is more environmentally friendly fuel than carbon-based products, he said.
Thompson said that the price of corn received by the farmer is typically higher at the ethanol plants because farmers still have leftover byproduct after extracting the ethanol from the corn.
“It just gives an additional market for the corn farmers no matter how many acres you grow,” Thompson said.
Gabe Corey, general manager of Carbon Green BioEnergy and industry representative on the Michigan Corn Growers Association Board, said in a statement that the proposal would help Michigan become more self-reliant.
“With so much uncertainty at the federal level, it’s more important than ever for Michigan lawmakers to promote new markets for biofuels,” Corey said. “The return on investment is clear. Statewide adoption of E-15 and E-85 would slash carbon emissions, save families money at the pump and fuel Michigan’s economy for decades to come.”
The bill has been referred to the Senate Agriculture Committee.
“They’re not criminals, I really don’t think we should continue calling these intentional misrepresentation individuals criminals.”
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