The Bush administration is extending incentives that make it easier for automakers to meet fuel economy requirements by selling vehicles that can run on corn-based ethanol and other alternatives to gasoline, according to a CNN report on February 19. Congress enacted the program to try to get people to use alternative fuels. The extension covers vehicles through the 2008-model year, the National Highway Traffic Safety Administration (NHTSA) said Feb 18. The program, approved by Congress in 1998, originally covered vehicles from the 1993- to 2004-model years. Critics have called the incentives a failure because most people who buy the dual-fuel vehicles continue to use gasoline instead of the 85-percent ethanol blend that the program was supposed to promote. Now there are only 182 fueling stations that provide ethanol-85 fuel, mostly in the Midwest, according to the government. Automakers have produced 3.4 million dual-fuel vehicles since 1998 when the incentives went into effect. By making the cars, manufactures get a credit against their overall requirements to meet fleet-wide fuel economy standards. Environmentalists have argued that the program should be repealed because it has failed to do what Congress intended since less than 1 percent of the dual-fuel vehicles end up using the alternative fuel, according to CNN. NHTSA, which issues fuel economy standards, acknowledged that the program has not yet achieved significant shifting from gasoline to ethanol-85 fuel. But the agency said it was extending the incentive for another four years "to allow the continued development of dual fuel vehicles" at a time when automakers are stepping up their promotions of the vehicles.

Originally posted on Fleet Financials