OPINION: Other people’s money

By Robert White, vice president of industry relations at the Renewable Fuels Association | April 03, 2019

It is not every day that free money is available to expand your business, but that is the case for many retailers if they are willing to consider offering higher blends of ethanol. We often hear from fuel retailers that are interested in diversifying their fuel choices at the pump to allow them to stand out from the competition, but simply don’t have the money to do it. Some stations require simply changes, some complex, but thankfully there are many programs out there that can provide some assistance to lower that cost of entry, no matter how small or big.

Over the years, there have been numerous programs that have aided fuel retailers in adding higher blends of ethanol. USDA’s Biofuels Infrastructure Partnership (BIP) Program provided millions in funding to retailers across the country. The ethanol industry has also provided millions through its Prime the Pump initiative. Congress is working on a tax extenders package that would renew a federal tax credit for the installation of alternative fuels, also referred to as the Alternative Fuels Infrastructure Tax Credit. This allows fuel retailers that installed alternative fuels (such as E85) in that approved tax year to become eligible for a federal tax credit equal to 30% of the total spent to install qualified equipment to offer the alternative fuel, with a maximum credit of $30,000 per station.

Additionally, some states have other programs available for dispensers, and/or tanks. For example, Iowa has its Renewable Fuels Infrastructure Program that provides cost-share dollars to fuel retailers to install blender pumps and other equipment necessary to offer higher blends of ethanol. It can provide up to 70% of the total costs. South Dakota has also funded millions in infrastructure to support higher blends of ethanol. Corn grower organizations in states like Nebraska and Kansas have also funded infrastructure dollars. Other states have provided promotional dollars once retailers offer higher blends of ethanol.

However, note that if retailers are in an area that has funding, it will likely cost more to avoid ethanol by missing out on these funding opportunities.

Last year marked another large growth in availability and consumption of both E15 and E85, and I expect that 2019 will be no different. There are now more than 22 million flex fuel vehicles (FFVs) on the roads that can use E85. The number of vehicles approved by EPA for E15 represents more than 90% of all light duty vehicles on the roads today, and a strong opportunity for fuel retailers. These fuels can help differentiate retailers from the competition and provide the opportunity to diversify your portfolio.

Since 1981, the Renewable Fuels Association (RFA) has represented U.S. ethanol producers. We do not have anything to sell, but we do have lots of information to give away. We can help you track down the money available from all programs, fill out the needed applications, do site equipment surveys, and even help pick out the right conversion kits or equipment. If you are interested in learning more about available funding and equipment options, please don’t hesitate to contact me directly at rwhite@ethanolrfa.org or RFA Director of Market Development Cassie Mullen at cmullen@ethanolrfa.org.

 

Robert White, VP of Industry Relations

Renewable Fuels Association (RFA)