With the ethanol tax credit scheduled to sunset on December 31, 2011, a new group has been organized to have Congress reverse its action on the subsidy for blending ethanol with gasoline. The “Coalition for E85” includes gasoline retailers, producers, equipment manufacturers, and others.  As the coalition’s name implies, it also wants to promote E85 to a mainstream fuel.  “E85 is not only an alternative fuel, it is our nation’s most widely adopted alternative fuel,” said Matt Horton, CEO of Propel Fuels, one of the lead members of the Coalition for E85. “If we are to make a meaningful dent in our dependency on foreign oil, we must expand E85 infrastructure and ensure this fuel has fair tax treatment.”

The current tax credit for ethanol fuel is set to expire at the end of this year and that would cause drivers of flex-fuel vehicles to pay as much as 38 cents more per gallon, according to the coalition. It could also force businesses that have invested more than a combined $100 million in E85 to shut down their pumps.

The new coalition urges the Internal Revenue Service to recognize E85 as a true alternative fuel, such as natural gas or propane and not an additive. It also supports developing, commercializing and innovating biofuels, and is pushing for the inclusion of E85 in a group of alternative fuels that receive a 50-cent-per-gallon tax credit.  “The impacts on the price and availability of E85 will be dramatic,” said Todd Garner, CEO of Protec Fuels, another member of the Coalition for E85. “We must not abandon E85 this close to self-sustainability.  Current members of the Coalition for E85 include Propel Fuels, Protec, Pearson Fuels, Clean Fuels Development Coalition, multiple ethanol industry associations, pump and tank companies, and individual E85 retailers.