Kansas Passes Renewable Fuels Standard

June 25, 2007

Kansas Governor Kathleen Sebelius signed House Bill 2145 in early May, which gives a tax credit to fuel retailers who meet a renewable fuels standard beginning in 2009. The measure will help the state increase consumption of biofuels produced from homegrown corn and sorghum.

Fuel retailers whose total sales include 10 percent ethanol would receive a $0.065-per-gallon tax credit. A retailer who comes within 2 percent of the target will receive a $0.045-per-gallon tax credit. Retailers that do not meet the target will not be subject to penalty, but will not be eligible for a credit. The 10 percent target will be raised by 1 percent per year until it hits 25 percent in 2024.

The bill also gives a tax credit of $0.03 per gallon of biodiesel sold if the retailer meets the target, which begins at 2 percent in 2009 and increases 2 percent per year until 2017. At that point the standard increases 1 percent per year until it hits 25 percent in 2025.

There are eight ethanol plants in Kansas that produce 215.5 million gallons of ethanol annually. Two more plants in Pratt and Garden City are slated to begin production this summer and will add 105 million gallons per year, bringing the Kansas production total to 320.5 million gallons annually. More plants are being built near Liberal, Lyons, Goodland, and Scandia and are expected to contribute 195 million gallons per year.

Sebelius has been an advocate for ethanol production and use. She chaired the Governor's Ethanol Coalition last year, and at the 2006 annual meeting stated, "There's a new energy behind our efforts to promote biofuels…Clearly there's a recognition of ethanol's potential to create jobs, particularly in rural areas, while at the same time reducing the country's dependence on foreign oil."

For more information on the renewable fuel standard, see the text of the bill. (PDF 58 KB). Download Adobe Reader.

Source: May 29 article in Biofuels News.

To read more about renewable energy and energy efficiency projects in Kansas, see: