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Michigan Expands Development and Production of Renewable Fuels and Advanced Batteries

January 15, 2009

Michigan Governor Jennifer Granholm signed 11 bills in late December that will expand production and use of renewable fuels, and another bill January 14 that provides up to $335 million in tax credits to encourage the development and manufacture of advanced battery technologies.

The renewable fuels bills were recommended by the state's Renewable Fuels Commission. The legislation:

  • Adds five new renewable fuels “renaissance zones” in Michigan, bringing the total to fifteen. Renaissance zones are geographic areas designated as tax exempt to encourage economic development. The new law requires that five of the zones be designated for facilities that focus primarily on cellulosic biofuel production (Public Act 329 of 2008).
  • Creates tax incentives for the use of agricultural machinery that can harvest both grain and biomass. These bills aim to encourage farmers to invest in equipment that will allow them to harvest their crops while also collecting biomass residue from the crop or grain that can be used in alternative fuel production (Public Acts 314, 332 and 334 of 2008).
  • Requires the Michigan Department of Agriculture (MDA) to develop rules regulating the quality and purity of biodiesel (Public Act 313 of 2008).
  • Instructs the Michigan Economic Development Corporation to publish an inventory of available sites for renewable fuel plants (Public Act 320 of 2008).
  • Requires the MDA to compile public information about establishing an alternative fuel production facility in Michigan (Public Act 330 of 2008).
  • Provides a Michigan Business Tax credit for gas stations that convert existing gasoline pumps to biofuels pumps (Public Act 335 of 2008)
  • Extends the life of the Renewable Fuels Commission until 2012 and asks the commission to report on the location of alternative fuel producers in Michigan, the amount of alternative fuel sold, and the economic impact of the industry (Public Act 333 of 2008).

The advanced battery legislation, House Bill 6611, provides financial incentives to encourage companies to develop and manufacture advanced batteries and commercialize advanced battery technologies in Michigan. The bill authorizes the Michigan Economic Growth Authority to provide tax credits totaling up to $335 million over five years for:

  • Research, development, and manufacture of battery packs used in hybrid plug-in vehicles
  • Vehicle engineering that supports battery integration
  • Advanced automotive battery technology engineering
  • Construction of integrated battery cell manufacturing facilities.

"Armed with the most aggressive economic strategy in the country and more collective talent in high-tech automotive research and development and manufacturing, no state is more equipped than Michigan to not only build the cars of the future but also the batteries and systems that will power them," Granholm said. "These groundbreaking incentives for battery development and manufacturing add to a comprehensive list of innovative tools and programs like the 21st Century Jobs Fund and Centers of Energy Excellence we now have in place to become the advanced battery capital of the world."

For more information, see the governor’s December 23 and January 14 press releases.

To read more about renewable energy and energy efficiency projects in Michigan, see: