Biofuels
Working Group Recommendations
The Biofuels Working Group
has developed the following recommendations for consideration. These actions are proposed to increase the
production, availability and use of biofuels for transportation in Alabama.
1. Encourage
alternative transportation fuel and hybrid and electric technology usage by
state agencies and other governmental entities.
The advisory group recommends
this be addressed by an executive order including the following provisions: 1)
All state agencies shall be directed to use alternative transportation fuels
and hybrid and electric vehicle technologies when available and feasible; 2)
Other governmental entities shall be encouraged to use alternative fuels and hybrid
and electric vehicle technologies when available and feasible; 3) The state bid
list for flex fuel and hybrid and electric vehicles and alternative fuels shall
be extended; and 4) Vendors using alternative fuels and/or hybrid and electric
vehicles in their operations shall be designated as “preferred vendors”.
2. Provide
funding for alternative fuel research, development and education. In
addition to any other possible funding sources, an income tax check-off program
should be established as a funding mechanism for alternative fuel research,
development and education. These funds
should be made available through a competitive grant process. Funds for R&D should address
commercialization in addition to technology development.
Feedstock Development. Increased
funding should be made available to Alabama universities for research, development and extension
of regionally appropriate feedstock development and a balanced portfolio of
fuel conversion technologies.
3. Establish an
Alabama Energy
Commission. An Alabama Energy Commission should be
established to further prepare Alabama for leadership in alternative fuels. This Commission would be responsible for, but
not limited to: 1) conducting yearly
status reports for the legislature and general public; 2) proposing legislation
and establishing policy to keep Alabama in line with federal guidelines; 3)
establishing an Alternative Fuel Incentives Fund to provide state grants as
available and appropriate; 4) establishing benchmarks for the State to reduce
consumption of foreign oil by the use of alternative fuels; and 5) establishing
Prosper Alabama: a promotion, education, and research fund to promote biofuels
use and research new sources of biofuels from agriculture and forest products.
4. Incentives
for Biofuel Feedstock Producers. Legislation should be drafted to provide an income tax
credit equal to $.20 per gallon of 100% biofuel used on-farm and in non-farm
feedstock production. Additional
incentives should be provided to encourage sustainable feedstock production and
conservation practices. Slight language
changes are recommended to the Wallace Linked Deposit Program (Chapter 21,
Title 5; Code of Alabama) to provide low-interest loans and to the Tax
Incentive Reform Act (Chapter 9B, Title 40; Code of Alabama) to provide tax
abatement for new feedstock harvesting, handling, processing and transporting
equipment. See recommended definition of
biofuel.
5.
Income Tax Credit for Retail Distribution and
Infrastructure. The advisory group supports previously drafted
legislation providing an income tax credit equal to 50% of the cost of
constructing and installing the part of the dispensing facility, including
pumps, storage tanks, and related equipment, that is directly and exclusively
used for dispensing or storing alternative fuels. See recommended definition of alternative
fuel.
6. Incentives
for Consumers. A sales tax credit for the purchase of alternative
fuel vehicles similar to that in the previously drafted legislation should be
made available to consumers. The
provision should be expanded to cover not only flex fuel vehicles that can
operate on E85 but also other alternative fueled vehicles, including hybrid and
electric vehicle technologies and other proven fuel conservation technologies.
7. Motor Fuels
Excise Tax Exemption for Biofuels. The fuel excise tax should be removed or
significantly reduced for blended biofuels produced and sold in Alabama.
8. Biofuel Fuel
Production Incentives. The advisory group supports previously drafted
legislation providing an income tax credit equal to $.10 per gallon of 100%
biofuel produced in Alabama ($.20 per gallon of 100% biofuel produced in “Favored
Geographic Areas”). See recommended
definition for biofuel.
9. Establish an
Interagency Alternative Fuels Working Group. The advisory group recommends
that an interagency working group be established by executive order to
facilitate coordination between state agencies on fuels and energy. The working group should be tasked to promote
education, research & development, production, and consumption of
alternative fuels. An invitation should
be extended to agencies not directly under control of the Governor’s Office to
participate in the working group through a Memorandum of Cooperation (MOC).
10. Quality
Assurance. Legislation should be drafted to require all motor fuels sold in Alabama to meet the fuel appropriate American Society of
Testing and Materials (ASTM) standards.
The operating budget for the Alabama Department of Agriculture &
Industries (ADAI) should be increased to cover additional lab costs and related
expenditures to allow for quality assurance and direct regulation of
alternative fuels. The ADAI percentage
of the current fuel inspection fee should be increased to help cover these
costs.
11. Amend Title
28 Code of Alabama to permit
the manufacture, sale and transportation of ethyl alcohol where the ethyl
alcohol is manufactured, sold and transported for use as a transportation fuel.
12. Legislation
developed in regard to alternative fuels should be economically feasible and
include provisions for tax exempt entities.
DEFINITIONS
Biofuel means motor vehicle fuel that:
(I) is
produced from grain, starch, oilseeds, vegetable, animal, or fish materials
including fats, greases and oils, sugarcane, sugar beets, sugar components,
tobacco, potatoes, and lignocellulosic or other biomass. (II) is used to replace fossil fuel or reduce the
quantity of fossil fuel present in a fuel mixture used to operate a motor
vehicle.
Biofuel
includes:
(I)
cellulosic biomass biofuels and waste derived biofuels; and
(II) biodiesel (as defined in section 757(e) of 2005 EPACT: `biodiesel' means a
diesel fuel substitute produced from nonpetroleum renewable resources that
meets the registration requirements for fuels and fuel additives established by
the Environmental Protection Agency under section 211 of the Clean Air Act (42
U.S.C. 7545) and that meets the American Society for Testing and Materials
D6751-02a Standard Specification for Biodiesel Fuel (B100) Blend Stock for
Distillate Fuels.) and any blending components derived from renewable fuel
(provided that only the renewable fuel portion of any such blending component
shall be considered part of the applicable volume under the renewable fuel
program.)
Cellulosic
biomass biofuels means any biofuel such as ethanol, butanol, diesel, gasoline
and aviation fuel derived from any lignocellulosic, hemicellulosic and/or
cellulosic matter that is available on a renewable or recurring basis,
including dedicated energy crops and trees; wood and wood residues, plants;
grasses; ag residues; fibers, animal wastes and other waste material and
municipal solid waste.
Alternative Fuel means motor vehicle fuel that is produced from:
(1)
biofuel (as defined above)
(2)
compressed natural gas
(3)
liquefied natural gas
(4)
propane
(5)
electricity
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