North Carolina, in spite of having a lofty goal stated in the ” North Carolina’s Strategic Plan for Biofuels Leadership that by 2017, 10% of liquid fuels sold in North Carolina will come from biofuels locally grown and produced”, is not the best place in the South to start a biofuels company.
Why? Because other states have better incentives for you to build it there. I recently had a discussion with a member from the NC Biofuels Center regarding what NC could do to provide better incentive for companies to build biofuel plants in NC. I told him, simply, “Tell the NC legislature to just copy South Carolina’s”. That’s it. Really.
See, NC doesn’t have any production credits for biofuels producers, and no consumer credits for actually using it. South Carolina does. See: http://www.afdc.energy.gov/afdc/laws/state_summary/SC. Specifically, retailers can get a .25 credit for every gallon of biodiesel sold in SC. (That’s what Flying J was doing, selling our biodiesel at truck stops in South Carolina before the $1.00 per gallon federal tax credit expired, and Pilot bought them and canceled the program).
Biofuels Retail Incentive
Ethanol retailers selling fuel blends of at least 70% ethanol (E70) are eligible for a $0.05 incentive for each gallon of ethanol blended fuel sold, provided that the fuel is subject to the South Carolina motor fuel user fee. Additionally, biodiesel retailers are eligible for a $0.25 incentive for each gallon of biodiesel (B100) sold as pure biodiesel or as part of a biodiesel blend, provided that the blend contains at least 2% biodiesel (B2). These incentives apply only to fuel sold before July 1, 2012. Biodiesel fuel is defined as a fuel for motor vehicle diesel engines comprised of vegetable oils or animal fats and meeting ASTM specifications D6751 or D975. (Reference South Carolina Code of Laws 12-63-20)
This credit, all by itself, would provide a huge boost to retail sales of biodiesel (and ethanol, but we don’t care much about that at TBI since we only make biodiesel) in North Carolina.
Additionally, a producer tax credit, which would make us hugely competitive with neighboring states would also help us:
Biofuels Production Tax Credit
Qualified corn-based ethanol and soy-based biodiesel producers are eligible for an income tax credit of $0.20 per gallon of fuel produced through 2016. Producers using feedstocks other than corn or soy oil are eligible for $0.30 per gallon tax credit. An eligible production facility must be operating at a production rate of at least 25% of its name plate design capacity and must maintain that production rate for at least six months, before denaturing, on or before December 31, 2011. The credit is allowed for up to 60 months beginning with the first month for which the facility is eligible to receive the credit and ending before December 31, 2016. Beginning January 1, 2017, the credit changes to $0.075 per gallon of fuel produced. The credit may be carried forward for ten years. Additional restrictions apply. (Reference South Carolina Code of Laws 12-6-3600)
This credit would help us offset the lack of a federal tax credit, and make us more competitive with other states that are importing biodiesel in to NC. Remember that lofty goal I mentioned above? It says that our 10% offset of liquid fuels in this state are to be “from biofuels locally grown and produced”. We’re not doing that. The state of NC is currently purchasing biodiesel to meet it’s state contract obligations for biofuels by purchasing biodiesel that is made outside of NC. Why? Because it’s cheaper.
Oh, and South Carolina has a biodiesel mandate for all state owned vehicles:
State Agency Biodiesel Blend Mandate
All state-owned diesel fueling facilities must provide fuel containing at least 5% biodiesel (B5) at all diesel pumps. (Reference South Carolina Code of Laws 12-63-30)
If you’re a NC legislator and are reading this blog (please let me know! I’d be impressed), why isn’t North Carolina doing more to improve the production capacity of our own state biofuels plants?
If you’re just an ordinary tax-paying citizen like me. Please call or write your state representative and ask them to “please copy South Carolina’s biofuels incentive program”, and point them to this blog article. You can find your state representatives here: http://www.ncga.state.nc.us/house/house.html. Look for “Who Represents Me?” down at the bottom right and enter your zip code.