A dissenting point of view on tax credits for flex-fuel vehicles
John Baily, an energy analyst for the Institute for Local Self-Reliance, offers his personal views on Senate Bill 90:
I’m writing with a comment on your recent bill introduction SB90 relating to tax credits for flexible fueled vehicles (FFVs) and certain hybrids. I’ve read over the bill quickly and while I support the expansion of hybrids and vehicles that use alternative fuels like E-85 (85 percent ethanol), I don’t think that this bill is the right approach. I assume that your ultimate goal is to expand the use of alternative fuels like E-85, right? Therefore, if you’re going to give a tax credit it needs to be tied to vehicles that actually use E-85 rather than those that are simply CAPABLE of using E-85.
According to the National Ethanol Vehicle Association, there are 68 E-85 pumps in Wisconsin. I’d say that fact makes it fairly difficult for E-85 to be used all the time by these vehicles that would be given a tax credit. In the United States, there are about 5-6 million FFVs capable of using E-85 on the road. The Environmental Protection Agency says that “in 2004, the latest year for which sales information is available, around 34 million gallons of E85 were sold. In comparison, an average of about 200 billion gallons of gasoline and diesel fuel is sold in the U.S. each year.” That’s about 6-7 gallons of E-85 per FFV per year. A large part of the problem is the lack of large numbers of E-85 refueling stations.
I think that your proposal could simply amount to a corporate giveaway with no impact on increasing alternative fuel use unless the tax credit is tied to these vehicles actually demonstrating that they are using alternative fuels.