A tax credit being proposed in the Minnesota legislature to help ethanol producers improve energy efficiency could boost Minnesota’s economy by $189 million. To qualify for the tax credit, ethanol producers in Minnesota would have to make significant capital investments to install and operate combined heat and power (CHP) and expander generators (EG) systems. These systems improve energy efficiency because they can generate process steam and electricity with a lower carbon fuel, like natural gas, without losing electricity over many miles of transmission lines. While this technology is relatively common in Europe, it is still in its infancy in Minnesota. A properly crafted tax credit would provide the necessary push for a diverse mix of ethanol producers and other eligible businesses to make the commitment to install these energy systems.
