Biodiesel tax-incentive legislation introduced in Michigan

Legislation has been introduced in Michigan to incentivize the sale and consumption of low-level biodiesel blends throughout the state’s retail fuel stations.

HB 6334, sponsored by Rep. Joe Bellino, R-Monroe, is a voluntary program that offers a 5-cent-per-gallon incentive on blends of 5 percent biodiesel (B5) sold in Michigan. Biodiesel is a renewable fuel predominately made from a variety of agricultural feedstocks like soybean oil. This domestically produced fuel offers numerous health and environmental benefits to Michiganders while reducing the state’s reliance on imported oil.

The Michigan Soybean Association applauded the introduction of this legislation.

“As states look to find solutions for rising fuel prices, Michigan soybean farmers are ready to step up to the plate and offer up a renewable fuel that helps lower the price of diesel while also making our air cleaner to breathe,” said Janna Fritz, CEO of the Michigan Soybean Association.

A recent health benefit study conducted by Trinity Consultants, a globally renowned air quality modeling firm that specializes in air-dispersion modeling, found that in the city of Detroit, switching vehicles to 100 percent biodiesel (B100) would result in a reduction of 656 cancer cases, 10,000 fewer or lessened asthma attacks, 22 fewer premature deaths, and more than $267 million in avoided health-care costs. As a whole, this study has looked at 28 sites and communities around the country where residents are exposed to high rates of petroleum-diesel pollution. In addition to the health benefits of this clean fuel, biodiesel has also been proven to lower the price of diesel fuel.

In April, the World Agricultural Economic and Environmental Services concluded that biodiesel consistently reduces distillate fuel prices by increasing the supply.

The study showed that U.S. biodiesel production generates a 4 percent decrease in the price of diesel, equal to about 22 cents per gallon based on current pricing.

“We are excited to support legislation that will not only add value to Michigan’s soybean farmers but also reduce diesel prices and makes domestically produced fuel a priority for our state,” said Heather Feuerstein, president of the Michigan Soybean Association and a soybean farmer from Ionia County. More information on the legislation can be found here.