Maine Incentives and Laws for Ethanol

The list below contains summaries of all Maine incentives and laws related to Ethanol.

State Incentives

Biofuels Production Tax Credit

A certified commercial biofuel producer is eligible for an income tax credit of $0.05 per gasoline gallon equivalent of biofuel produced for use in motor vehicles or otherwise used as a substitute for liquid fuels. Biofuel is defined as ethanol, biodiesel, hydrogen, methanol, or any other transportation fuel derived from agricultural crops or residues, or from forest products or byproducts. A taxpayer claiming this credit must receive a letter from the Maine Department of Environmental Protection that certifies the biofuels produced during the taxable year are eligible for the tax credit. For biofuels blended with petroleum or other non-biofuels, the credit is allowed only on the biofuels portion of that blend. Any portion of unused credits may be carried over for up to 10 taxable years. (Reference Maine Revised Statutes Title 36, Section 5219-X)

Laws and Regulations

State Plan to Reduce Petroleum Consumption

By December 1, 2012, the Maine Office of Energy Independence and Security (Office) must develop a plan to reduce petroleum consumption in all sectors of the economy with the overall goal of reducing petroleum consumption in the state by at least 30% and 50%, based on 2007 levels, by 2030 and 2050, respectively. The plan must prioritize the use of alternative energy sources for transportation. The Office must include an update on the progress towards meeting these goals in the state's biennial comprehensive energy plan. (Reference Legislative Document 553, 2011, and Maine Revised Statutes Title 2, Section 9)

Ethanol Fuel Handling Outreach and Education

The Maine Department of Environmental Protection (Department) must conduct an outreach and education campaign to inform residents of the proper handling and disposal of motor fuels containing ethanol. The campaign will provide information on topics including how to determine when phase separation occurs. The Department must also update its website to include information relating to safe handling and disposal options. (Reference Legislative Document 1760, 2010)

Policy Recommendations for Biofuels Promotion

The Maine Office of Energy Independence and Security issued a report, Liquid Biofuels Policy for Maine: A Report to the State Legislature, which recommended specific policy options aimed toward the promotion of biofuels. The recommendations include the following: a) combine existing, unfunded, alternative fuels funds into one Clean Fuel Fund; b) study sustainability measures for biofuels; c) improve implementation of existing policies related to alternative fuels; d) support research and development; e) exempt alternative fuels from exclusivity contracts; f) revise and reinstate an excise tax cut for biofuels; g) institute a biodiesel purchasing requirement for the Maine Department of Transportation; and h) pursue a regional renewable fuels standard and/or low carbon fuel standard. The report includes suggestions for initial implementation actions and next steps. (Reference Legislative Documents 1159, 1284, and 1347, 2007)

Alternative Fuel Tax Rates

Blended fuels that contain at least 10% gasoline or diesel are now taxed at the full tax rates of gasoline ($0.30 per gallon) or diesel ($0.312 per gallon). Alternative fuel tax rates are as follows:

For more information see the Maine Revenue Services website. (Reference Legislative Document 1468, 2011, and Maine Revised Statutes Title 36, Section 3203)

Transportation Efficiency Fund

The Transportation Efficiency Fund is a non-lapsing fund managed by the Maine Department of Transportation to increase energy efficiency and reduce reliance on fossil fuels within the state's transportation system. Funding may be used for zero emission vehicles, biofuel and other alternative fuel vehicles, congestion mitigation and air quality initiatives, rail, public transit, and car or van pooling. (Reference Maine Revised Statutes Title 23, Section 4210-E)

Provision for Establishment of Clean Fuel Vehicle Insurance Incentives

An insurer may credit or refund any portion of the premium charged for an insurance policy on a clean fuel vehicle in order to encourage its policyholders to use clean fuel vehicles, as long as insurance premiums on other vehicles are not increased to fund these credits or refunds. (Reference Maine Revised Statutes Title 10, Sections 963-A, and Title 24-A, Section 2303-B)

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