Michigan congressman proposes 50-cent gallon tax on gasoline and a carbon tax; biodiesel and ULS diesel to be exempted

In Michigan, Congressman John Dingell (D-Mich) has proposed a 50-cent-per-gallon tax on gasoline and $50-per-ton tax on carbon emissions. Ultra-low sulfur diesel fuel and biodiesel would be exempt from the carbon tax. Proceeds would go to highways, mass transit, medicare, social security and health care.

The proposal is significant because Rep. Dingell comes from the automaking state of Michigan. Dingell was recently instrumental in removing higher fuel standards from the House energy bill. The Senate bill includes tougher fuel standards. Detroit automakers have embraced conversion to biofuels as a better path towards emission reduction than mandating higher CAFE standards, which they say will cost them more than $100 billion to implement.

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