Indiana increases E85 incentives

By Timothy Charles Holmseth | April 08, 2008
Web exclusive posted April 21, 2008 at 11:52 a.m. CST

Retailers and fleets in Indiana may be more inclined to add E85 pumps to their operation with the passing of new legislation that provides up to $20,000 for companies to cover the cost of installing and converting E85 equipment.

Cary Aubrey is program manager for Bioenergy Development at Indiana State Department of Agriculture. Aubrey said a lot of interest has been generated by the $1 million legislation. "The phone has been ringing off the hook," he said.

The recently passed E85 legislation provides financing to cover 50 percent of the cost to install infrastructure for E85. The opportunity however is not limited to businesses - "local units" are also eligible to receive grant assistance. "It used to be stated that only public fueling sites could take effect of this opportunity," Aubrey said. "Now it's been opened also to what we consider local units, which would be towns, cities, counties, or township fleets."

Indiana has been offering incentives for E85 since July 2007, when $1 million became available for an 18-cent sales tax deduction, Aubrey said. The consumer will receive "an 18-cent sales tax deduction on every gallon of E85 sold at these sites," he said. "There was $1 million available for the sales tax deduction starting last July but that has decreased because retailers have been taking advantage of that."

Aubrey said there is more awareness of E85 - and its positive impact, adding that because of education in the past year, the average consumer has learned exactly what E85 and ethanol is and that it's home grown.

"Now the car manufacturers have decided to start flagging vehicles that are flex-fuel and putting those in commercials," Aubrey said. "I think the soccer moms have figured out 'hey, I'm driving a flex-fuel vehicle, I can go over here and fuel and its 50-60-70 cents cheaper.'"

In the past year, Indiana has gone from having one ethanol plant to 12 new ethanol plants and four new biodiesel plants, which are expected to create 620 new jobs in the state.