The ethanol industry is proposing a shift in state tax incentives for Iowa businesses that sell ethanol-blended fuel.
“Some of the retailer tax credits need to be reformed to get more bang for the buck,” says Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Under current law, Iowa retailers get tax credits based on the amount of fuel sold that includes a 10 percent ethanol blend. “This tax credit has been a huge success over the last 10 years, but it’s time has probably come and gone,” Shaw says. “And so we need to focus the dollars that are available on the new challenges, like E15.”
Just two Iowa gas stations are selling E15. Shaw says since a majority of Iowans use E10 in their vehicles, it’s time to take the roughly $8 million worth of tax credits retailers get for selling E10 and redirect it to retailers who sell E15.
“We want to give them a bigger carrot. We know we just can’t ask them for more money. I mean, that’s not going to happen,” Shaw says, with a laugh. “So what we’re saying is, let’s take a program that has been very, very successful for E10 but refocus it for E15 because over the last decade E10 has gone from about 30 percent sales in Iowa to being the national fuel.”
The Fast Stop in Vinton and Popkes Car Care in Rock Rapids are the only two stations in Iowa selling E15. The Environment Protection Agency recently approved E15 for use in cars and light trucks built since 2007, but a decision on older models dating back to 2001 is expected next year.
About a third of the vehicles on the road were made in the past four years. Retailers are unlikely to install new tanks for E15 until the higher blend is approved for most vehicles.