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Plan would help build retail infrastructure

By Seth Teter

State agriculture groups are hoping to increase the availability of ethanol and biodiesel by backing financial incentives for fuel retailers.

The Ohio Corn Growers Association (OCGA) has proposed a standard that would offer tax credits for renewable fuel sales. To be eligible, a retailer would be required to have at least 12 percent of total sales come from such fuels. Essentially, retailers would have to market blends such as E85, which contains 85 percent ethanol, or B20 made from 20 percent biodeisel.

"This program takes it closer to the consumer by putting it in the hands of a retailer" said Tadd Nicholson, OCGA director of programs.

Rocky Black, OFBF senior director of policy and political affairs, said this plan will help complete the picture for the biofuels industry.

"The retail side of this industry has been the missing link in the chain," he said. "Farm Bureau will be working with the governor's office and lawmakers to provide incentives for renewable fuel retailers and consumers."

Nicholson said there has been no need to encourage the production of ethanol as investors have stepped up to fund the booming industry. Five ethanol production facilities are expected to come online in Ohio within the next 18 months and numerous others have been proposed.

By 2015, Ohio could be producing 900 million gallons of ethanol, according to OCGA Executive Director Dwayne Siekman. Ohio currently produces up to 45 million gallons of biodiesel. Siekman said farmers will be able to grow into the ethanol industry but will need to adjust farming practices.

"Absolutely, we will need more (corn) acres, " he said. He notes that increasing yields and crop technologies also will help meet the demand.

But producing ethanol does not necessarily get it into the tanks of Ohio drivers. Already there are nearly 300,000 vehicles in Ohio capable of running on E85, yet there are only 18 ethanol pumps in the state.

"That's not a good ratio," Siekman said.

The proposal is also expected to increase the most common blend of ethanol, E10, which can be utilized in any vehicle. Nicholson said just 60 percent of gasoline in Ohio is blended to make E10, an amount he believes should be higher.

"It just makes good business sense," he said.

Retailers that meet the 12 percent renewable fuels standard would receive tax credits based on the amount of total ethanol or biodiesel sold. The incentive also provides the option of reducing the motor fuels tax for E85 because it gets fewer miles per gallon than gasoline. The standard would incrementally increase to 25 percent by 2025. Nicholson said the tax credits would cost the state around $1 million annually.

"If you can force yourself to look down the road a few years, you'll see its worth it," he said.