The economic stimulus package, signed by President Obama, includes an increase in the federal income tax credit for alternative fuel infrastructure. The National Ethanol Vehicle Coalition (NEVC) played a lead role in the inclusion of this incentive and is confident this will lead to a more prominent position of high blends of ethanol in the marketplace.

The American Recovery and Reinvestment Act, or H.R. 1, increases the existing Federal alternative fuel infrastructure tax credit of $30,000 or 30 percent of the incremental cost, to $50,000 or 50 percent of the incremental cost. The NEVC began encouraging the inclusion of this additional tax incentive in November of 2008 by forwarding a letter to the Speaker of the House with nearly ninety industry leader signatures. The original infrastructure development provision was part of the 2005 Energy Policy Act.

More than seven million E85 compatible or flexible fuel vehicles (FFVs) are currently driving on American roads. To date, only 1,958 E85 stations exist to fuel these FFVs. Furthermore, Chrysler, Ford Motor Company and General Motors all have promised to increase their flexible fuel model year availability in a few short years. The additional tax credit will assist those struggling fuel retailers to include this clean burning, alternative fuel to their stations.

According to Bernie Punt, chairman of the NEVC and general manager of Siouxland Energy and Livestock Coop., the increased federal income tax credit should be instrumental in the establishment of new fueling systems across the nation. Punt stated, “The NEVC has been focusing on the lack of E85 fueling infrastructure for the past several years. We lead the effort to establish the tax credit in 2005 and to increase the credit in the stimulus bill. The lack of fueling infrastructure remains the major impediment to using high-level blends of ethanol.”

Also included in the recently signed Stimulus Bill is a grant program providing $300 million to the Department of Energy’s Clean Cities program to implement section 721 of the Energy Policy Act of 2005. The NEVC will be closely monitoring the planned distribution of these funds to encourage DOE to allocate significant portions of the monies to advance E85 fueling systems and educational/marketing efforts.