Tuesday, May 30, 2006

Renewable Fuels Standard...TEXAS?

Dark green marks the states with enacted RFS and light green the state in the legislative process.

The Iowa House on Wednesday passed by a vote of 97–1 a Renewable Fuels measure that will require that 25% of motor fuel sold in Iowa by 2020 come from renewable sources. The bill—which creates the most aggressive Renewable Fuels Standard (RFS) in the country—now goes to Governor Tom Vilsack for signature.If signed by the governor, the bill will make Iowa the fifth state with its own RFS.

The House bill, HF 2754, and its companion appropriation bill, HF 2759, create:

A renewable fuels standard (RFS) starting at 10% in 2009 and increasing to 25% by 2019.

A new ethanol promotion tax credit for each gallon of ethanol blended into gasoline (replaces existing tax credit beginning in 2009). This incentive is linked to a retailer dealer’s achievement of the RFS schedule. The tax credit increases from 2.5 cents per gallon (c/g) for retailers within 4% of the RFS schedule to 6.5 c/g for retailers meeting or exceeding the RFS schedule.

A retail tax credit for E85 of 25 c/g (phases out by 2020).

A retail tax credit for biodiesel blends of 3 c/g (for retailers who sell more than 50% biodiesel blends.

$13 million over three year to expand an infrastructure program designed to help retailers and wholesalers offset the cost of bringing E85 and biodiesel blends to consumers.

The RFS does not mandate a specific blend percentage, but allows gasoline retailers flexibility in meeting the standard through the sale of E10, E85, and biodiesel blends.

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