Appendix D
Brief Survey of State Biofuel Policies in the Upper Midwest

Background Paper for the National Academies’ Workshop: “Expanding Biofuel Production: Sustainability and the Transition to Advanced Biofuels”


June 23-24, 2009

Madison, WI


Bjorn Gangeness

University of Minnesota

INTRODUCTION

Biofuels have been touted as a way to help in achieving energy independence and security, to improve the environment and encourage economic growth in rural areas. Both state and federal governments across the nation have developed policy incentives and other programs to promote the use of bio-based fuels such as ethanol and biodiesel.

Since the late 1970’s, the Upper Midwest states have been leaders enacting these policies and supporting programs to encourage the production and use of biofuels building on the region’s strong agricultural bases. The evolution and impacts of these policies have implications far beyond the region—to other parts of the United States and the world. New policies will likely be necessary to address emerging questions about the economic, environmental, and social impacts of current biofuels and to support a transition to more sustainable advanced biofuels.



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Appendix D Brief Survey of State Biofuel Policies in the Upper Midwest Background Paper for the National Academies’ Workshop: “Expanding Biofuel Production: Sustainability and the Transition to Advanced Biofuels” June 23-24, 2009 Madison, WI Bjorn Gangeness University of Minnesota INTRODUCTION Biofuels have been touted as a way to help in achieving energy independence and security, to improve the environment and encourage economic growth in rural areas. Both state and federal governments across the nation have developed policy incentives and other programs to promote the use of bio-based fuels such as ethanol and biodiesel. Since the late 1970’s, the Upper Midwest states have been leaders enacting these policies and supporting programs to encourage the production and use of biofuels building on the region’s strong agricultural bases. The evolution and impacts of these policies have implications far beyond the region—to other parts of the United States and the world. New policies will likely be necessary to ad - dress emerging questions about the economic, environmental, and social impacts of current biofuels and to support a transition to more sustainable advanced biofuels. 0

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0 APPENDIX D U.S. BIOFUEL PRODUCTION HISTORY Biofuel production has grown dramatically in the last thirty years. In 1980 the United States consumed only 83 million gallons of ethanol in vehicle fuel, and by 2007 this number had reached almost 6.8 billion gallons (Figure 1). Biodiesel consumption was about 9 million gallons in 2001(when statistics were first pub - lished) and increased to almost 0.5 billion gallons in 2007.1 FIGURE 1 U.S. ethanol vonsumption and production capacity 1980-2008. Market gains of this magnitude are significant but the promising future origi - nally imagined by biofuels’ biggest proponents has not materialized, caught, in part, by declines in world petroleum prices and the general economic downturn. At the same time, larger questions of environmental sustainability and economic efficiency have emerged. Advanced ligno-cellulosic biofuels derived from more complex organic feedstocks like wood or grasses are being promoted as more environmentally beneficial than so-called first-generation biofuels and are seen as a way to avoid impacting food supplies and prices. Aggressive goals have been set for advanced biofuels production to be met by 2015. But the transition to large scale commercial advanced biofuels production is still some years away. 2 POLICY IMPLICATIONS OF BIOFUELS Policies to promote the use of biofuels have lowered the cost to producers of entering the market and encouraged increased consumption of biofuels as an 1 Fuel Ethanol and Biodiesel Overview, 1981-2007. Accessed May 22, 2009. http://www.eia.doe. go/emeu/aer/txt/ptb003.html. 2 U.S. Energy Policy Act of 2005 (EPAct 2005) Accessed May 22, 2009. http://www.epa.go/oust/ fedlaws/publ_09-08.pdf.

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03 APPENDIX D alternative or additive to petroleum based fuels. These policies various types of subsidies, tax incentives, mandates, and investment credits. In 2006 there were over 150 policies explicitly supporting biofuels at the state level and another 30+ policies at the federal level.3 The aggregate affect of this abundance of support has been to increase the production and consumption of biofuel products. However, the ultimate effect on the economy and the environ- ment from increased production and consumption of biofuels is unclear. BIOFUELS DEPLOYMENT IN IOWA, MINNESOTA, AND WISCONSIN The Upper Midwest has emerged as the largest source of ethanol production in the country. Three states in particular have embraced the potential benefits of biofuels and deliberately bolstered support of biofuel production over the past 30 years. This support has led to dramatic increases in the acreage devoted to bio - fuel feedstocks—primarily corn—and to the construction of ethanol plants with a large total capacity. Iowa, Minnesota and Wisconsin together have 35 percent of the total U.S. nameplate capacity for producing ethanol.4 Iowa alone delivers almost 25 percent of U.S. ethanol production (Figure 2). Biodiesel production is more nationally diffuse. These three states have a total biodiesel production capacity of 376.5 million gallons or about 15 percent of national capacity. 5 FIGURE 2 Ethanol production capacity. Each state has taken a different approach to biofuels development. In 1992, Minnesota passed a law requiring that all gasoline sold in the state to be blended 3 Koplow, D. 2006. “Biofuels—At What Cost ?: Government Support for Ethanol and Biodiesel in the United States”. International Institute for Sustainable Development. 4 Nebraska Energy Office. Accessed May 26, 2009. http://www.neo.ne.go/statshtml/.htm. 5 National Biodiesel Board. Accessed May 26, 2009. http://www.biodiesel.org/.

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0 APPENDIX D with 10 percent ethanol increasing to 20 percent in 2013.6 Wisconsin has con- sidered a renewable fuel standard (RFS) but so far has only required state fleet vehicles to use at least 10 percent ethanol blended gasoline since 1993. 7 Iowa has mandated that vehicles sold in-state be operable on gasoline blended with at least 10 percent ethanol or more since 1993 and recently passed a RFS mandat - ing 10 percent renewable blends in all gasoline starting in 2009 increasing to 25 percent in 2020.8 STATE BIOFUELS POLICY: DRIVERS AND TOOLS Originally, biofuels policies like the Minnesota blending requirement were introduced by state legislators who saw significant direct benefits to their local constituents or customers. More recently, governors of these states have played a bigger role by proposing renewable fuel mandates like Minnesota’s biodiesel blending mandate of B2 (2 percent biodiesel in diesel fuel) by 2005 increasing up to B20 by 2015. Wisconsin Governor Jim Doyle recently ordered a reduction of 20 percent in petroleum-based content consumed in state gasoline-fueled vehicles by 2010 and a 50 percent reduction by 2015.9 In the case of biofuel development, financial incentives to promote biofuel production within state borders include: • elimination or reduction of excise taxes (currently federal); • renewable fuels standards • accelerated capital depreciation tax benefits; • alternative fuel vehicle mandates; • state fleet fuel consumption quotas; • loan-guarantee programs; • producer payments; • feedstock subsidies; • blender’s credits; • investment and production tax credits (ITCs & PTCs); The Upper Midwest uses all of these incentives10 to promote biofuel produc- tion and use (Table 1). 6 Brown, E., K. Cory, and D. Arent. January 2007. “Understanding and Informing the Policy Envi - ronment: State-Level Renewable Fuels Standards.” NREL Technical Report. 7Wisconsin Biofuels and Alternative Fuels Use Report 2007 Annual Report. Accessed May 26, 2009. http://energyindependence.wi.go/dociew.asp?docid=6&locid=60. 8 Iowa Office of Energy Independence. Accessed May 26, 2009. http://www.energy.iowa.go/ renewable_fuels/IA_renewfuels_standard.html. 9Wisconsin Biofuels and Alternative Fuels Use Report 2007 Annual Report. Accessed May 26, 2009. http://energyindependence.wi.go/dociew.asp?docid=6&locid=60. 10 Koplow, D. 2006. “Biofuels—At What Cost ?: Government Support for Ethanol and Biodiesel in the United States”. International Institute for Sustainable Development.

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TABLE 1 State Programs Supporting Biofuel Production and Use Policy/State Iowa Minnesota Wisconsin Renewable Equivalent of 25 percent of all gasoline Total motor gasoline sales must contain 20 Fuel sales must come from renewable sources percent ethanol by volume (E20) by 1/2013. Standard [either 10 percent or 85 percent ethanol Total diesel sales must contain 5 percent (RFS) blends (E10, E85), or biofuel that is 1 biodiesel by volume (B5) by 5/2009. (1991, percent biodiesel by volume (B1) at a revised 2006) (MN Next Generation Energy minimum] (2006) (NREL 2007)a Act 2007)b Retail 50 percent+ cost-share program for E85 50 percent Cost share for E85 fueling Ethanol Refueling Project has provided $100,000 Infrastructure and biodiesel (B1+) dispensers (2005- stations up to $15,000 (MN Office of to assist with construction of E85 fueling stations Incentives 2008). Iowa Power Fund grants and Energy Security 2009)d (leveraged DOE funding) (WI Office of Energy low-interest loans. (Iowa Office of Energy Independence 2007)e Independence presentation 2009)c Retail tax 25 cpg (cents per gallon) tax credit to credit distributors of E85, 3 cpg to retailers selling B2 or higher and more than 50 percent of total sales (Koplow 2006)f State- Low to 0 percent interest loans backed Low-interest state loans from the Minnesota backed Loan by up to 50 percent public funding to Investment Fund (MN OLA 2009)g Programs renewable energy production facilities up to max of $250,000 (Koplow 2006) Producer 20 cpg ethanol for the first 15 million payments gallons of annual production (1987-2012) (MN OLA 2009) 0 continued

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TABLE 1 Continued 06 Policy/State Iowa Minnesota Wisconsin Ethanol Executive Order in 2006 requiring state vehicles to Blend or reduce fossil fuel use (20 percent by 2010 and 50 Renewable percent by 2015) and replace it with increased use Content of E10, E85, and biodiesel. Also, governor set a Goals (not goal of 25 percent renewable power and fuel in WI RFS) by 2025 (WI Office of Energy Independence 2007) Blender’s Payment to blenders peaking at a total of Credit $25 million/year in 1994 (1980-mid 1990s) (MN OLA 2009) Production or General business development investment PTC of 20 cpg on first 15 MGY of ethanol Investment tax credit programs that are used production; capped at $3 million over 5 years. Tax Credit significantly by biofuel production Expired 1 July 2006 (Koplow 2006) facilities. Usually targeted specifically to job creation or property tax relief. (Iowa Dept of Revenue 2009)h aBrown, E., K. Cory, and D. Arent. 2007. NREL Technical Report. “Understanding and Informing the Policy Environment: State-Level Renewable Fuels Standards.” http://www.osti.go/bridge/product.biblio.jsp?query_id=&page=0&osti_id=898863. bMinnesota Next Generation Energy Act of 2007. Accessed May 30, 2009. http://www.nextstep.state.mn.us/res_detail.cfm?id=03. cIowa Office of Energy Independence. Accessed May 26, 2009. http://www.energy.iowa.go/renewable_fuels/IA_renewfuels_standard.html dMinnesota Department of Commerce–Office of Energy Security. “Renewable and Efficiency Incentives.” Accessed May 30, 2009 http://www.state.mn.us/ portal/mn/jsp/content.do?id=-368938&contentid=36889&contenttype=EDITORIAL&programid=36980&agency=Energy. eWisconsin Biofuels and Alternative Fuels Use Report 2007 Annual Report. Accessed May 26, 2009. http://energyindependence.wi.go/dociew.asp?docid= 6&locid=60. fKoplow, D. 2006. “Biofuels—At What Cost ?: Government Support for Ethanol and Biodiesel in the United States”. International Institute for Sustainable Development. gOffice of the Legislative Auditor. 2009. “Biofuel Policies and Programs.” State of Minnesota. http://www.auditor.leg.state.mn.us. hJin, Z. and B. Teahan. 2009. “Iowa’s Tax Incentive Programs Used by Biofuel Producers Tax Credits Program Evaluation Study.” Iowa Department of Revenue. http://mpra.ub.uni-muenchen.de/9/.

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0 APPENDIX D BIOFUELS POLICIES WITH SIGNIFICANT IMPACTS The States of Iowa, Minnesota, and Wisconsin have each taken a somewhat different path in supporting the development of their biofuel economies. For ex - ample, Minnesota introduced a ethanol blender’s tax credit of 4 cpg to support the blending of ethanol in gasoline in 1980 and a 20 cpg producer payment in 1986. Iowa and Minnesota both established renewable fuels standards requiring increas- ing percentages of ethanol and biodiesel contained in the states’ transportation fuels. Wisconsin has used a combination of a very successful producer payment program with other diverse tax credits and renewable energy loan programs to cultivate its biofuel economy. Minnesota In addition to the tax credits and producer payments, Minnesota has sup - ported ethanol and biodiesel development with many other incentives and pro - grams. The cost-share program for fueling station installation helps to increase the availability of E85 at fuel stations across the state. State managed low-interest loans were used for some biofuel production facilities, but new facilities are now usually subsidized by an economic development program called JOBZ that is not biofuel specific but provides tax relief to new businesses locating in rural areas.11 It is increasingly common for states to support biofuels development with eco - nomic development initiatives that are not specific to biofuels. Iowa Iowa’s biofuel industry has recently taken advantage of economic develop- ment incentives included in the Enterprise Zone and High-Quality Job Creation Programs.12 Ethanol plants have been awarded over $405 million worth of tax credits through these programs. Iowa now also has a Renewable Fuels Standard beginning in 2009 with 10 percent of gasoline sales must be renewably sourced (i. e., corn or other renewable feedstock). This percentage must rise to 25 percent renewably sourced by January 1, 2021 according to the RFS.13 A tax credit mea- sured by pure ethanol gallons sold is also defined in the RFS if retailers reach a certain percentage of sales from ethanol (3 percent below threshold rising to full credit at the threshold point of 10 percent pure ethanol sales in 2009). 11 Office of the Legislative Auditor. 2009. “Biofuel Policies and Programs.” State of Minnesota. http://www.auditor.leg.state.mn.us. 12 Jin, Z. and B. Teahan. 2009. “Iowa’s Tax Incentive Programs Used by Biofuel Producers Tax Credits Program Evaluation Study.” Iowa Department of Revenue. http://mpra.ub.uni-muenchen. de/9/. 13 http://www.energy.iowa.go/renewable_fuels/ethanol/retailers_producers.html.

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08 APPENDIX D Wisconsin In contrast to the tax credits in Minnesota and Iowa, Wisconsin has primar- ily relied upon grants and loans to stimulate the production and distribution of biofuels. One exception is the ethanol production tax credit that was in place for 2 years and was considered so successful that the program was retired after many facilities came online. The governor has also used Executive Order numbers 141 and 192 to promote the use of renewable fuels in state fleet vehicles and to require the use of 25 percent renewably sourced energy for power and transportation by the year 2025. One loan program, called the Freight Railroad Infrastructure Im - provement Program is intended to expand freight capacity for biofuels and other products, has distributed $13.5 million for ethanol plants. The Wisconsin Energy Independence Fund has awarded $7.5 million 50 percent cost share grants to renewable energy projects in 2008 alone.14 Midwest Governors Association In addition to state-specific initiatives, the Midwest Governors Association has also been active in promoting renewable energy and climate change mitiga- tion policies. Though the MGA does not write or implement policy for particular states, it often advocates for positions to the U.S. Environmental Protection Agency and lobbies Congressional leaders for action on energy-related policies at the federal level. The latest MGA letter to EPA called for ethanol blending limits to be raised to 15 percent.15 In 2007 the MGA also released recommendations to establish a regional greenhouse gas management initiative that would rely on biofuels to reduce greenhouse gas emissions, among other actions. ADVANCED BIOFUEL PRODUCTION Lawmakers are beginning to turn to advanced biofuel production as a po- tential way to avoid the adverse environmental consequences often seen with first generation biofuels and to assure that biofuels production does not compete with food production. Advanced, or second generation, biofuels are produced from biomass that is high in lignin or contains high levels of cellulose, such as trees, shrubs, grasses, or corn-stover. These materials cannot be processed into ethanol or biodiesel by the same technology as corn or soybeans. Lignin and cel- lulose must first be broken down into the simple sugars and oil that can then be processed into ethanol or biodiesel. This initial step has proven to be expensive 14 Presentation given at National Academies workshop on “Sustainability and the Transition to Advanced Biofuels.” June 23, 2009. Madison, WI. http://sustainability.nationalacademies.org/pdfs/ Ziewacz.pdf. 15 http://www.midwesterngoernors.org/.

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09 APPENDIX D but public and private research institutions continue to invest heavily in finding a way over this hurdle.16 ADVANCED BIOFUEL DEVELOPMENT PROGRAMS There are many programs that aim to make cellulosic biofuels commercially viable. Most of these programs are set by federal policies including the 2008 Farm Bill, the Energy Policy Act of 2005, and the Energy Independence and Security Act (EISA) of 2007.17 These programs are primarily directed at research and development administered through the Department of Energy or the U.S. De- partment of Agriculture. The EISA 2007 mandates the use of 950 million gallons of biomass-based fuel in the United States in 2010.18 Some advanced biofuels policies have been proposed or passed at the state level, but at substantially lower levels of support. In 2007, Minnesota began creating a program called Reinvest in Minnesota—Clean Energy that proposed using land easements to support the conversion of agricultural land into dedicated cellulosic energy crops. New York has supported the construction of cellulosic ethanol pilot facilities. 19 Due to the nascent development of these advanced biofuels, few significant state incentives are currently in place. FUTURE CHALLENGES Economic—Biofuels have the potential to reduce U.S. dependency on oil. However, studies to date suggest that the ability to reduce U.S. oil imports will not be as dramatic as proponents have claimed. Additional economic con - siderations include indirect consequences of public subsidies to farmers and producers. Subsidies provided to farmers for the production of agricultural com- modities—including biofuel feedstocks—continue to be the subject of inter- national trade debates. In the case of U.S. corn production it is estimated that ethanol accounted for 12 percent of the crop in 2005 increasing to a projected 23 percent in 2014-2015.20 In the US, crop subsidy payments vary with market conditions but averaged about $5 billion/year for 2000-2004. It is also estimated that ethanol captured nearly $1 billion of this annual average and that percent - age would increase if more corn was used for fuel. If corn continues to be the 16 Gardner, Tim. “US drafts rule to lower CO2 output from biofuels.” May 5, 2009. http://www. reuters.com/article/idUSTRE3L300900. 17 Department of Energy Office of Science. “Biofuels Policy and Legislation.” Accessed May 22, 2009. http://genomicsgtl.energy.go/biofuels/legislation.shtml. 18 Department of Energy Office of Energy Efficiency and Renewable Energy. “Federal Biomass Policy.” Accessed May 22, 2009. http://www.eere.energy.go/biomass/federal_biomass.html. 19 Koplow, D. 2006. “Biofuels—At What Cost ?: Government Support for Ethanol and Biodiesel in the United States”. International Institute for Sustainable Development. 20 Baker, A and S Zahniser. April 2006. “Ethanol Reshapes the Corn Market.” Amber Waves 4, no. 2 pp. 30-35.

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0 APPENDIX D main feedstock for ethanol production and crop yields do not keep up with this growth, other areas of the economy are likely to be affected with rising food and fuel prices.21 Environmental—Advanced biofuels have the potential to improve upon the environmental impacts associate with the production and use of first generation of biofuels by reducing the need for fertilizers and pesticides, reducing water use, and eliminating competition between crops for food and fuel. Supporting the development of the market for advanced biofuels will be important to their success. If policy makers decide that achieving improvements on these impacts is important, the environmental, economic and social impacts must be considered in crafting appropriate advanced biofuels policies. ANNEX D STATE POLICIES AND PROGRAMS INFLUENCING BIOFUELS DEVELOPMENT Minnesota Tax Credits A. Blender’s Credit 4 cent per gallon tax credit to blenders distributing gasoline with 10 percent ethanol. Program credits peaked at a total of $25 million/year in 1994 (1980–mid-1990s) (MN OLA 2009)22 B. JOBZ Business Tax Credit 8 ethanol facilities and 2 biodiesel facilities have benefited from cor- porate, property, and sales-tax credits through this program. 370 other non-biofuels industries have also benefited, totaling over $78 million in tax credits. (MN Department of Employment and Economic Develop - ment 2009)23 Grants and Loans C. Retail Infrastructure Incentives 50 percent Cost-share for E85 fueling stations up to $15,000 (MN Office of Energy Security 2009) 24 21 Runge, CF and B Senauer. “How biofuels could starve the poor.” Foreign Affairs. May 2007. http://www.foreignaffairs.org/0000faessay8630-p0/c-ford-runge-benjamin-senauer/how- biofuels-could-stare-the-poor.html. 22 Office of the Legislative Auditor. 2009. “Biofuel Policies and Programs.” State of Minnesota. http://www.auditor.leg.state.mn.us. 23 http://www.deed.state.mn.us/bizde/jobz.htm. 24 http://www.house.leg.state.mn.us/hrd/pubs/ss/ssethnl.htm.

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 APPENDIX D D. Producer payments 20 cent per gallon ethanol for the first 15 million gallons of annual pro- duction, limited to $3 million/year per facility (1987-2012) (MN OLA 2009) Executive Orders or Legislative Mandates E. Renewable Fuel Standard (RFS) Total motor gasoline sales must contain 20 percent ethanol by volume (E20) by 2013. Total diesel sales must contain 5 percent biodiesel by volume (B5) by 5/2009. (1991, revised 2006) (MN Statutes 239 sections 77 and 791) Advanced Biofuels Policies F. Next Generation Energy Board grants A one-time appropriation of $3 million to be granted to renewable en- ergy projects, including advanced biofuels. 2 of 8 grants went to existing biofuels projects to study feasibility of co-locating cellulosic ethanol with conventional ethanol and to convert another ethanol project to be powered by biomass instead of natural gas. (MN OLA 2009) G. Reinvest in Minnesota Clean Energy A proposed agricultural easement program focused on supporting a conversion to perennial energy crops. Level of payment considered at 80 percent of the value of the land converted for a 20 year or longer contract. (proposed but defeated legislation 2008)(Board of Water and Soil Resources 2008)25 Iowa Tax Credits A. Retail tax credit 25 cent per gallon (cents per gallon) tax credit to distributors of E85 dropping to 20 cpg for 2009-2010, 3 cpg to retailers selling B2 or higher and more than 50 percent of total sales (Iowa Office of Energy Indepen - dence 2009)26 B. Investment Tax Credit Iowa has a few general business development investment tax credit programs that are used significantly by biofuel production facilities. Usually targeted specifically to job creation or property tax relief. Some programs have minimum wage requirements. More than $405 million 25 http://www.bwsr.state.mn.us/RIM-CE.html. 26 http://www.energy.iowa.go/renewable_fuels/ethanol/tax_changes.html.

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 APPENDIX D were claimed in tax credits for a total of 55 ethanol projects through 2008 (Iowa Department of Revenue 2009)27 C. Ethanol Promotion Tax Credit The incentive each fuel retailer is eligible for will be directly tied to the preceding IRFS schedule with amounts to be paid only for “pure” etha - nol gallons (E100). The total credit will be based on how closely the fuel sales at each site achieve the IRFS and how many gallons are sold. The credits range from 2.5 to 6.5 cent per gallon depending on the threshold and year until 2020. (Iowa Office of Energy Independence 2009) D. Biodiesel Blended Fuel Tax Credit A retail dealer who sells or dispenses biodiesel blended fuel is eligible for this new income tax credit. The biodiesel must be at least 2 percent blended for the tax credit to apply. The retailer qualifies for the tax credit if they sell 50 percent or more of at least B2 biodiesel from the entire volume of diesel they sell, and the 3 cents per gallon tax credit will apply to every gallon of biodiesel sold if they qualify. (Iowa Office of Energy Independence 2009) Grants and Loans E. Iowa Power Fund $100 million appropriated over 4 years. Provides financial assistance to projects that will improve Iowa’s biofuels, renewable energy, and energy efficiency sectors. The Fund’s board is comprised of 18 members who review and approve project applications. (Iowa Office of Energy Inde- pendence 2009)28 F. Retail Infrastructure Incentives 50 percent+ cost-share program for E85 and biodiesel (B1+) dispensers (2005-2008). (Iowa Renewable Infrastructure Board 2009)29 G. Alternate Energy Revolving Loan Program (AERLP) The revolving loan funds equal to 50 percent of the total financed cost of a project (up to $1 million) at 0 percent interest. The AERLP has served a balanced mix of technologies including solar, biomass, small hydro and small and large wind turbine facilities since 1997. (Iowa Energy Center at Iowa State University 2009)30 27 Jin, Z. and B. Teahan. 2009. “Iowa’s Tax Incentive Programs Used by Biofuel Producers Tax Credits Program Evaluation Study.” Iowa Department of Revenue. http://mpra.ub.uni-muenchen. de/9/. 28 http://www.energy.iowa.go/Power_Fund/about_IPF.html. 29 http://www.iowalifechanging.com/business/renewablefuels.aspx. 30 http://www.energy.iastate.edu/AERLP/index.htm.

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3 APPENDIX D Executive Orders or Legislative Mandates H. Iowa Renewable Fuel Standard (RFS) Equivalent of 25 percent of all gasoline sales must come from renewable sources [either 10 percent or 85 percent ethanol blends (E10, E85), or biofuel that is 1 percent biodiesel by volume (B1) at a minimum] (2006) (NREL 2007)31 I. Executive Order 3 (6/21/2007) from Governor Culver ordered the use of E-85 fuel in the state’s flexible-fuel vehicles shall be increased to at least 60 percent of fuel purchases, and instructs the Office of Energy Independence and DAS to develop a “State Government E-85 Use Plan. (State Library of Iowa 2009)32 J. Executive Order 6 (2/21/08) from Governor Culver ordered the creation of a Biofuels Task Force to oversee the increased use of biofuels in state vehicles, decreased miles traveled, and higher energy efficiency in the state vehicle fleet, among other environmental actions. (State Library of Iowa 2009)33 K. Executive Order 16 (8/20/2009) from Governor Culver ordered the creation of the Iowa Green Jobs Task Force. The fifteen member task force is to help focus state government’s efforts in creating high-pay - ing, green-collar jobs, as well as coordinate the state’s efforts to secure federal green initiative grants through the American Recovery and Re - investment Act. (State Library of Iowa 2009)34 Wisconsin Tax Credits A. Production Tax Credit for Ethanol 20 cent per gallon production tax credit on first 15 MGY of ethanol production; capped at $3 million over 5 years. Expired 1 July 2006 [s. 560.031] (Koplow 2006) B. Production Tax Credit for Biodiesel 10 cent per gallon production tax credit on biodiesel, 2.5 million gallon minimum up to $1 million for tax years 2010 through 2012 [s. 71.07 (3h)]35 (pending legislation) 31 http://www.energy.iowa.go/renewable_fuels/IA_renewfuels_standard.html. 32 http://publications.iowa.go/90//03-006.pdf. 33 http://publications.iowa.go/6//06-080 percentB percentD.pdf. 34 http://publications.iowa.go/99//Executie_Order_No6.pdf. 35 http://www.legis.state.wi.us/RSB/STATS.HTML.

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 APPENDIX D C. Ethanol and Biodiesel Fuel Pump Income Tax Credit Tax credit for 25 percent of the cost of installation, up to $5,000 for tax years 2007 thru 2017. [Statute s. 71.07 (5j)](WI Office of Energy Independence 2009) D. Business Tax Credit Full income and franchise tax credit for motor vehicles that use gasoline and ethanol mixtures as fuel and for fuel efficient hybrid motor vehicles up to $1000 per year. SB-13836 (pending 009 legislation) Grants and Loans E. Energy Independence Fund Renewable energy grants and loans for up to 50 percent of project costs. $7.5 million awarded in 2008 totaling 22 projects. (WI Office of Energy Independence 2009)37 F. Agricultural Diversification Program Supports agriculture-related projects with grants of 75 percent of proj - ects cost up to $50,000. 20 grants have been awarded totaling $600,000 since 2002. [s. 93.46 (1), (2), and (3)] (WI Office of Energy Indepen- dence 2009) G. Biogrant Program Funding provided to 12 projects since 2006. $677,000 has supported 7 biofuels projects. (WI Office of Energy Independence 2009) Transportation Facilities Economic Assistance and Development. 50 percent cost-share grants to biofuels facilities based on job creation. 5 facilities have been funded totaling $665,400. (WI Office of Energy Independence 2009) H. Freight Railroad Infrastructure Improvement Loan program. 100 percent loans to connect industry to rail or rail improvements repaid from 2 percent up to the prime interest rate. 4 biofuels facilities have benefited from the program for a total of $13.5 million. (WI Office of Energy Independence 2009) I. Ethanol Refueling Project $100,000 in total assistance provided for construction of E85 fueling stations (leveraged DOE funding) (WI Office of Energy Independence 2007)38 36 http://www.legis.state.wi.us/009/data/SB38hst.html. 37 http://energyindependence.wi.go/category.asp?linkcatid=99&linkid=6&locid=60. 38 http://www.wisgo.state.wi.us/journal_media_detail.asp?prid=.

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 APPENDIX D Executive Orders or Legislative Mandates J. Executive Order 141 (2006) Requires state vehicles to reduce fossil fuel use (20 percent by 2010 and 50 percent by 2015) and replace it with increased use of E10, E85, and biodiesel. Also, governor set a goal of 25 percent renewable power and fuel in WI by 2025 (WI Office of Energy Independence 2007)39 Advanced Biofuels Policies K. Extensive advanced biofuels legislation introduced in the Assembly providing financial assistance to the use of bioenergy feedstocks, biore - fineries, and biomass energy, and providing some tax credits for the use of renewable fuels. AB-408/SB-27940 (Office of Energy Independence 2009, personal communication) 39 http://www.wisgo.state.wi.us/journal_media_detail.asp?locid=9&prid=88. 40 http://www.legis.state.wi.us/009/data/SB9hst.html.

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