OPINION: Take the opportunity to save on capital improvements

By Robert White, vice president of industry relations, Renewable Fuels Association | January 05, 2022

Smart retailers know how to take advantage of every opportunity when it comes to capital improvements, and a federal program to help defray the cost of infrastructure for alternative fuels like E85 sometimes goes overlooked.

While the Alternative Fuel Infrastructure Tax Credit expired at the end of 2021, it still provides fuel marketers the ability to claim a tax credit for 30 percent of the cost, up to $30,000, for fueling equipment for E85 and other alternatives to gasoline, as long as the equipment was installed before December 31. Under the program, fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Click here for more information from the Department of Energy on how to claim the credit.

Even more funding has been made available to help fuel marketers bring new alternative fuels online. Since 2020, the U.S. Department of Agriculture’s Higher Blends Infrastructure Incentive Program (HBIIP) has provided matching grants for higher blend infrastructure projects around the country. Likewise, in December, USDA unveiled a plan to make an additional $100 million available for infrastructure programs, in an effort to continue increasing the sales and use of higher blends of ethanol. The funding will provide grants to refueling and distribution facilities for cost of installation, retrofitting or otherwise upgrading of infrastructure required at a location to ensure the environmentally safe availability of fuel containing bioethanol blends of E15 and greater. The application window for these funds is expected to be announced soon.

Funding opportunities don’t stop there. Thanks to several ethanol champions on Capitol Hill, additional biofuel infrastructure funding of nearly $1 billion was included in the Build Back Better Act, and RFA remains hopeful those provisions become law in 2022.

When it comes to HBIIP and similar programs, RFA has held a leadership role in helping fuel marketers work through the at-times-complicated process of securing matching grants. Through two rounds of HBIIP grants, RFA directly helped a total of 33 companies in 21 states secure $24 million in infrastructure grants which, when coupled with matching retailer commitments of $40 million, is adding more than 1,200 new dispensers at 244 locations across the country. We stand ready to help retailers take advantage of any program that can help bring more low-carbon ethanol to market.

Of course, the complementary challenge is to ensure there are more flex-fuel vehicles on the road, and the number of new FFVs has been on the decline. For model year 2022, for example, only Ford and GM offer FFVs; and of the 11 models available, five are for fleet purchases only. This is a marked difference from the more than 80 different models from eight manufacturers that were available to consumers as recently as the 2015 model year.

RFA continues to strongly advocate for the production of more FFVs and fairness in how alternative fuel vehicles are incentivized under fuel economy and greenhouse gas regulations. One example of our advocacy was the introduction of the Clean Fuels Vehicle Act of 2021   by Sens. Amy Klobuchar (D-MN) and Joni Ernst (R-IA). The bill would establish an automaker tax credit for each FFV produced and restore certain compliance credits for FFVs under federal fuel economy regulations. We strongly encourage retailers to support this legislation to help ensure that drivers have every opportunity to use lower-carbon fuels in their vehicles.

In the end, at some point you will need new equipment just to continue doing business as usual. We just ask that you contact us and see if one of these programs would save you money on something you are already need, and along with it, you would get to offer new products to lure in new consumers.