LANSING, Mich. (Michigan News Source) — Despite its approval in the 2025 budget, Governor Gretchen Whitmer vetoed a proposed 5-cent per gallon tax credit for E15 ethanol-blended fuel on July 24. The incentive had strong bipartisan support in the legislature and aimed to make E15, also known as Unleaded 88, more widely available and economically beneficial at the pump. The legislation included a cap of $100,000 per fuel retailer for the tax credit.

Viewing the incentive as a necessary support mechanism for the rural economy, the agricultural sector and biofuel industry expressed their disappointment with the veto. 

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“Michigan’s corn farmers are disheartened to see the Governor block this important legislation that was championed by members of her own party,” executive director of the Michigan Corn Growers Association, Jim Zook, said. “Ethanol is not only a significant market that helps keep Michigan’s farm families in business, it’s also a cleaner-burning fuel that reduces greenhouse gas emissions and lowers gas prices for drivers at the pump” (Michigan Corn).

Growth Energy, the nation’s largest biofuel trade association, also voiced its disapproval. CEO Emily Skor discussed the potential benefits of E15, including lower fuel costs and reduced carbon emissions. 

“Governor Whitmer’s unilateral veto of Michigan’s E15 tax incentive will cost consumers more money and leave carbon reductions on the table,” Skor said in a statement. “Members of the Michigan legislature understood this, and that’s why they approved the incentive to expand access to this fuel choice. It’s unfortunate for Michigan drivers their Governor disagreed.”

Michigan’s bioethanol industry is expansive, according to DTN Progressive Farmer, with five plants processing over 100 million bushels of corn annually to produce more than 400 million gallons of ethanol. Currently, there are 23 fuel stations in the state that sell E15—a number that proponents argue would have likely increased had the E15 incentive taken effect. 

Environmental groups, however, supported Whitmer’s veto. According to MLive, they argued that ethanol has not met expectations for emissions reductions.

Christy McGillivray, legislative and political director for the Sierra Club’s Michigan Chapter, expressed concerns to MLive regarding ethanol production, citing research that suggests it may actually increase net emissions. As a result, she said that the Sierra Club has “serious concerns” with tax incentives for ethanol and instead advocates for investments in sustainable infrastructure projects, such as walkable cities.

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Several of these priorities were included in the budget, such as nearly $3 million allocated for promoting e-bike purchases and $30 million for expanding electric vehicle charging infrastructure.