STATE LEGISLATION ENSURES CONSUMER ACCESS TO LOWER COST GASOLINE

May, 04, 2010  |  Today's News |  ICGA |  Ethanol |  Legislation & Regulation

Bloomington, Ill—Today the Illinois Corn Growers Association (ICGA) celebrated the IL Senate’s passage of HB 4652, a measure that will eventually allow higher blends of ethanol to receive the state sales tax exemption.

Specifically, the legislation changes the state’s definition of gasohol, which is currently defined as 10% ethanol, 90% gasoline. The new definition of gasohol will mirror the U.S. Environmental Protection Agency’s (EPA) highest allowable levels of ethanol as defined in the Clean Air Act.

“This is great news for anyone that buys fuel in Illinois,” explained Tim Lenz, a Strasburg, IL corn farmer and president of ICGA. “By linking the state’s definition of ethanol blended fuels to the federal regulations, consumers can continue to enjoy the lower price per gallon for gasoline that is blended with ethanol.”

This definition in Illinois statute relates to a sales tax incentive for marketing ethanol-blended fuel. Marketers can sell ethanol-blended fuel with a sales tax reduction of 20% on each gallon. Current statute ties the tax incentive only to the 10% blends.

“The timing on this legislation is critical,” Lenz explained, “We expect EPA to approve ethanol blends of up to 15% of the nation’s fuel supply sometime this summer. Without this statutory adjustment in Illinois, consumers would have immediately lost some of the price advantages as ethanol blends increase.”

Today, wholesale ethanol prices are over 65 cents per gallon cheaper than wholesale gasoline prices. Consumers will realize significant savings when EPA increases the allowable blend level up to 15 percent.

The Illinois ethanol industry is currently comprised of 15 operating ethanol plants with a combined annual capacity of 1.5 billion gallons, representing 30% of the state’s gasoline usage. Ethanol production is the biggest user of corn that stays in the state. More than 1,000 people are directly employed in Illinois ethanol plants.

ICGA looks forward to Governor Quinn signing HB 4652 into law for the benefit of consumers, the ethanol industry, and corn farmers in Illinois.