South Dakota mulls 2 cent biodiesel tax break, elimination of 2 cent break for ethanol

In South Dakota, consumers are facing the elimination of a long-time 2-cent-per-gallon tax break on ethanol. The bill was introduced by legislators to add an projected $4 million to a badly depleted highway fund. Opponents says that increasing taxes on South Dakota’s most successful new industry was a bad idea. Meanwhile, Gov. Rounds has proposed a 2-cent-per-gallon tax break for biodiesel to jump start demand for the fuel.

South Dakota has been known more as an ethanol state than for biodiesel. However, South Dakota State University has received $26 million from the US Department of Energy for research on biofuels in general. The North Central Sun Grant Center will coordinate the program. The program covers biofuels education, outreach, feedstock assessment and feedstock development. The North Central Sun Grant Center will coordinate the efforts across all of the six Sun Grant Centers nationwide.

A study released by the South Dakota state government in January said that E10 has become the most popular fuel in the state. 37 percent of all state fuel tax revenues come from E10, 31 percent gasoline, 31 percent diesel, and the remaining 1 percent from E85 and liquid petroleum gas (LPG).

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