Michigan lawmakers consider tax credit on sales of ethanol gas blends

Michigan agriculture leaders are pushing legislation to encourage gas station owners to sell more fuels blended with ethanol and gasoline.

The state Senate agriculture committee heard testimony on Thursday about a proposed tax credit on sales of E15 (15% ethanol) and E85 (85% ethanol) fuel.

As proposed, retailers would get a tax credit of 5 cents on each sale of a gallon of E15 fuel and a tax credit of 8.5 cents per gallon of E85.

Industry supporters like Bob Thompson, president of the Michigan Farmers Union, say the tax credit would encourage gas station owners to increase the number of ethanol fuel pumps.

“The availability of E15 statewide in Michigan would result in an additional demand of 78 million bushels of corn per year, increasing the incomes of our family farmers,” Thompson told senators during the committee hearing.

Environmentalists worry that the increasing use of ethanol fuels will negatively affect air and water quality in Michigan.

Megan Tinsley is with the Michigan Environmental Council. She told senators of her concerns that the increased use of ethanol fuels would have a negative impact on air quality.

“We have areas of Michigan that are sometimes not able to reach ozone,” Tinsley said, “increasing ethanol in the fuel supply and adding to that smog and ozone could pose threats to air quality.”

Environmentalists also worry that growing more corn for ethanol increases could also lead to water quality issues.

The Senate committee should continue to examine the proposal.

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