Senate approves bill for biodiesel incentives

PROVIDENCE – The Rhode Island Senate last week unanimously approved changing the state’s tax incentive for the sale of biodiesel fuel, a move aimed at spurring production of the cleaner-burning, renewable-resource fuel made from vegetable fat.
The bill, S-0525aa, will now be forwarded to the House. The bill would make blended biodiesel motor vehicle fuel that is manufactured in Rhode Island eligible for exemption from state fuel taxes, currently 30 cents per gallon.
Currently, the law allows only 100 percent biodiesel fuel to qualify for the state exemption. Much of the current technology requires blended biodiesel – or biodiesel mixed with regular diesel – and a range of federal incentives allow for blending of biodiesel. Depending on a variety of factors, federal tax credits can range from 50 cents to $1 per gallon in tax credits.
“It’s a great idea to have an incentive that encourages consumers to use more environmentally friendly biodiesel, but if it doesn’t apply to the kind of fuel that consumers actually need, it’s not effective. Adjusting this incentive is another incremental step that will help encourage reductions in our dependence on fossil fuels,” said Sen. Louis P. DiPalma, D-Little Compton, the bill’s lead sponsor. &#8226