LIHU‘E — A handful of House bills related to tax incentives specifically for ethanol production companies could be expanded to encompass all biofuel facilities that extract energy from many different forms of organic matter. One of these bills, House Bill
LIHU‘E — A handful of House bills related to tax incentives specifically for ethanol production companies could be expanded to encompass all biofuel facilities that extract energy from many different forms of organic matter.
One of these bills, House Bill 2237, would “expand the existing ethanol facility tax incentive to include other liquid biofuels.” Each “qualifying production facility” would be eligible for a tax credit of 30 cents per gallon.
“Kaua‘i has a real big stake in this game,” said Rep. Mina Morita regarding biofuel production.
Of approximately 7,500 acres of Gay & Robinson land, 3,400 have already been leased to Dow AgroSciences for corn crop and further development of hydroelectric generation. And Pacific West Energy is looking to continue growing sugar cane and “woody biomass” on the additional land, according to Pacific West President and CEO William M. Maloney.
The “potential of a sugar facility on the Westside” could be used as a “platform” for other technologies like algae which would be incentivized with these more encompassing tax credits, Morita said.
“Losing the sugar mill would be a huge loss,” she said during a meeting last month. “We can’t afford to lose the infrastructure.”
The amount of renewable energy propelling Kaua‘i’s electrical needs is currently estimated to be around 14 percent, said Kaua‘i Island Utility Cooperative renewable energy staff engineer Steve Rymsha.
The goal is to have 50 percent of the island’s electrical needs serviced by renewable energy by 2023 and if the biomass project and solar farm on the Westside “move forward as planned,” then Kaua‘i will be well on its way, he said.
But, offering tax incentives may not be the best solution for bringing renewable energy to the island, the Tax Foundation of Hawai‘i said in written testimony.
“While the idea of providing a tax credit to encourage such activities may have been acceptable a few years ago when the economy was on a roll … what lawmakers and administrators have learned in these past few months is that unbridled tax incentives, where there is no accountability or limits on how much in credits can be claimed, are indeed irresponsible,” the letter from the private nonprofit states.
The testimony asks lawmakers to “consider repealing this credit and utilize other strategies to encourage the developers,” such as loan programs which would hold them “to a deliberate timetable or else lose the funds altogether.”
“Finally, this proposal verifies what has been said all along about legislators latching onto the fad of the month without doing much research,” the letter says. “While ethanol was the panacea of yesterday, lawmakers have learned that there are more down sides to the use of ethanol than there are pluses.”
Biofuels are a “marginally cleaner source to gasoline, but still have nitrous oxide emissions,” said Apollo Kaua‘i’s Sharry Glass. “It’s not something we want to do long-term.”
Sugar cane needs plenty of water to grow, said environmentalist and agricultural expert Don Heacock. Though it is “cleaner than fossil fuels,” one ton of water is required to grow about one pound of sugar — not very efficient, he said.
For more information on HB 2237, visit www.capitol.hawaii.gov.
