Massachusetts governor signs state biofuels bill; mandates B5 by 2013, cellulosic ethanol tax exemption

In Massachusetts, Governor Governor Deval Patrick signed the state biofuels bill that will require a B2 biodiesel blend commencing in 2012, increasing to B5 by 2013. The bill also exempts cellulosic ethanol from state excise taxes of $0.23 per gallon, based on the percentage of ethanol used.

Qualifying fuels must achieve at least a 50 percent reduction of lifecycle greenhouse gas emissions (GHG) over petroleum. Moreover, all fuels will be required to undergo a full lifecycle analysis, which includes “significant indirect emissions” and land use changes.

Also, the new law allows state regulators to delay or scale back the blending requirement if there are issues associated with supply or cost.

Massachusetts background

A report on biofuel policy initiatives by the Massachusetts Energy and Environmental Affairs office, including an exemption from the state’s gas tax for cellulosic ethanol and a blending requirement for biodiesel, has received endorsements from congressional Rep. William Delahunt and the New Fuels Alliance.

“Advanced biofuels companies located right here in the Commonwealth and their investors are looking for state leadership. This report will be welcome news to those who are actively working to reduce our use of petroleum,” said Andrew Schuyler, director of the Northeast Biofuels Collaborative. Schuyler added that much of the recent coverage of biofuels has been misleading. “While biofuels have been blamed for driving food prices higher, the truth is nothing poses a bigger threat to grocery aisle prices than the skyrocketing price of oil.”

Late last year, a biofuels policy bill was been introduced into the state legislature, generating “overwhelmingly positive” reaction from lawmakers according to the state’s Secretary for Energy and Environment Affairs, but drawing criticism from some industry groups and legislators.

The bill required all diesel and home heating fuel sold in the state to contain 2 percent of renewable alternatives by 2010, increasing to a 5 percent by 2013. The bill also exempts cellulosic ethanol from the state gasoline excise tax.

The Massachusetts Petroleum Council called the bill “ill-advised” and said it would increase natural gas prices. Overall, the bill is expected to create 3,000 new jobs in Massachusetts and add $320 million to the domestic the economy.

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