Saving green by going green

Saving green by going green

Being more environmentally conscious has long been heralded as beneficial to the earth, but it can also be beneficial to fleets’ bottom line.

Being more environmentally conscious has long been heralded as beneficial to the earth, but it can also be beneficial to fleets’ bottom line.

The potential economic gain of using alternative fuels and vehicles was explored in Alternative Fuel Vehicle Institute (AFVi) webinar that featured Rich Kolodziej, president of NGVAmerica, and Robert White, interim executive director and director of operations of the Ethanol Promotion and Information Council.

Kolodziej said that credits were a “three-legged stool” consisting of vehicle credits, fueling infrastructure credits, and excise tax fuel credits. He noted that the tax credits go to the purchaser of the vehicle, and if it is leased, it goes to the lessor. He outlined several tax credits available to businesses looking to go green, including the Energy Policy Act of 2005 and EPAct 1342.

“The Energy Policy Act of 2005 has incentives for all types of alternative fuels and advanced technologies—fuel cells, hybrid, electric vehicles, lead burn diesel engines, and dedicated alternative fuel vehicles,” Kolodziej said. He said the credits apply to any vehicle placed into service after January 1, 2006.

The credits vary widely—from $8000 to $40,000 for fuel cell vehicles; from $2500 to $32,000 for alternative fuel vehicles; from $400 to $3400 for lead burn or hybrid electric and from $1500 to $12,000 for heavy- duty hybrids. The credit is a minimum 50% of incremental cost. AFVs that meet “cleanest available emissions standards” receive 80% of incremental cost.

“For hybrids and lean burns, the credit varies—it’s not a flat amount, it’s based on a combination of a conservation credits and fuel economy,” Kolodziej said.

EPAct 1342 federal legislation, signed into law in 2005, includes a tax credit for alternative fuel refueling infrastructure, such as equipment that dispenses CNG, LNG, LPG, hydrogen, and E85 fuel.

White said that E85, previously not economically efficient compared to gasoline in many areas, now has become more affordable. “What’s important about this in the E85 arena is that this will put ethanol storage in places that never saw that storage before, making it more economical for E85 to hit those pockets,” he said.

E85, first introduced in the early 1990s, requires special dispensing equipment and a special vehicle—the Flex Fuel Vehicle (FFV). However, E85 reduces emissions and carbon footprint, and helps the U.S. move away from foreign oil.

The Energy Independence and Security Act of 2007, which will be enacted on January 1, 2009, includes a tax credit of 30% for the total cost of an alternative fuel system, up to a maximum of $30,000, for fleets using E85.

White added that grant programs also give a substantial amount--$200 million is ticketed yearly from 2008 to 2014 for installation of E85 refueling infrastructure--which he said should help add to the number of retail outlets for E85 and other renewable fuels.

Currently fleets can receive $.51 per gallon for every gallon of ethanol blended, although the credit currently is set to expire in 2010.

“What we’re here to talk about is finding different areas other than your own checkbooks to meet demands,” White said.

View more Fleet Owner news relating to alternative fuels, fuel conservation, fuel economy and diesel fuel prices.

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