Why should there be tax incentives for distributors and wholesalers of biofuels? Well because we need to make sure that the product gets to market. Additionally, because biofuel blends such as ethanol work much better in warmer climates. Currently most of the ethanol is sold in the northern Midwest and where it is cooler and therefore you lose 10% of the advantage of ethanol and ethanol gets 10% less fuel mileage per gallon.
However in warmer climates it works 110% to 119% better. That means if we distribute ethanol to the southern latitudes in the United States of America it will be much better for all concerned. But this does cause a distribution and transportation issue to get it to market. This means that the free market may not be interested in distributing ethanol in regions, which are over 1500 to 2000 miles away from where they are refined and grown.
Some Reasoning Behind Tax Incentives for Distributors and Wholesalers include the fact that Consumers will choose these hybrids when they purchase cars if ethanol is available in their area. Better deals for wholesale distributors will mean Lower prices at the pump for Bio Fuels, which will trigger consumer response. These incentives will allow dealers to carry the Bio Fuels and Flex Fuels and thus gives them a leg up on competition; also meaning gas stations will demand it and refineries will make it due to this demand. Please consider this in 2006. |
