Alternative public-policy incentives and the development of ethanol-production facilities in New York state. Final report

Technical Report · Tue Dec 01 04:00:00 EST 1981

OSTI ID:5355137

The federal and state incentives available to investors are outlined and the impact of selected incentives on ethanol plant feasibility in New York state is assessed. Two ethanol plants are selected as representative facilities against which the various incentive programs can be evaluated. One plant has the annual capacity to produce 1.675 million gallons from deproteinized cheese whey. The second plant has an annual capacity of 25 million gallons from corn grain. These two plants represent significantly different options to potential plant developers. The cheese whey-based plant is a relatively low-volume facility, but utilizes a low-cost waste product of the dairy sector. The corn-based plant is a high-volume enterprise, but utilizes corn, which has many alternative uses to ethanol production and is thus a potentially expensive feedstock. Neither plant necessarily represents an optimal scale of conversion for its respective feedstock. However, each plant is well suited for demonstrating the impacts of incentive programs. Of the various incentives tested, the federal fuel excise tax exemption appears to be the most important, followed by the Federal Energy Investment Tax Credit, state industrial revenue bond financing, and the Accelerated Capital Recovery System provisions of the Economic Recovery Tax Act of 1981. The incentives studied are successful in reducing, to various degrees, the uncertainty surrounding investments in ethanol fuels. However, it would appear that the incentives cannot compensate for a lack of basic economic strength. The whey-to-ethanol plant is relatively risk-free under a wide range of assumptions even when no incentives are utilized.

• Research Organization: Cornell Univ., Ithaca, NY (USA). Dept. of Agricultural Economics
• OSTI ID: 5355137
• Report Number(s): NYSERDA-82-10; ON: DE82904672
• Country of Publication: United States
• Language: English

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AGRICULTURE
CEREALS
COMPARATIVE EVALUATIONS
DAIRY INDUSTRY
ETHANOL PLANTS
FINANCIAL INCENTIVES
FINANCING
FOOD INDUSTRY
GRAMINEAE
GRASS
INDUSTRIAL PLANTS
INDUSTRY
MAIZE
PLANTS
TAX CREDITS
WASTE PRODUCT UTILIZATION