U.S. Senate on April 25, 2002 passed legislation that would update U.S. energy policy by promoting alternative fuels and energy conservation, according to Reuters. The Senate bill also calls for tripling the amount of ethanol-blended gasoline sold over the next decade and provides $14 billion energy tax credits and incentives. It would require utilities to increase the amount of electricity generated by renewable energy sources like wind and solar from the current 2 percent to 10 percent by 2020. According to a news release from the Natural Gas Vehicle Coalition, the alternative-fuel vehicle-related provisions incuded in the Energy Policy Act of 2002 are modeled on the CLEAR Act. They include: 1. A tax credit equal to 40 percent of the incremental cost for the purchase or lease of a dedicated AFV. An additional credit equal to 30 percent (for a total of 70 percent) of the incremental cost if the alternative-fuel vehicle meets the most stringent emissions standards. 2. A tax credit per gasoline equivalent to the retail seller of natural gas, hydrogen, methanol, or propane for transportation purposes. 3. An extension of the current tax deduction ($100,000) for the capital cost of an alternative-fuel fueling station, and a new credit of up to $30,000 for the cost of installing alternative fuel sites. The bill also includes several other provisions promoting alternatives to petroleum, including a number of incentives for electric, hybrid, and fuel cell vehicles. Hailed by the National Corn Growers Association (NCGA) as “an unprecedented, historic move,” the energy package includes a renewable fuel standard (RFS). “This is the first time ever that national energy policy would require the use of renewable transportation fuel,” NCGA President Tim Hume said. Provisions of the legislation require refiners to use 2.3 billion gallons of renewable fuels, like ethanol, in 2004 and increase that to 5 billion gallons by 2012. Key elements of the legislation include: the RFS; eliminating the re-formulated gasoline (RFG) oxygen requirement; banning MTBE in four years; creating a renewable credit trading system; and protecting the environmental performance of RFG. The Energy Policy Act of 2002 will now proceed to a joint conference committee where members of the Senate and the U.S. House of Representatives will work out the differences between the Senate bill and the previously passed House bill (the SAFE Act).

Originally posted on Fleet Financials