Missouri's House Bill 642 is making waves as it aims to boost the sale of higher ethanol blends in the state, a move that could reshape the local fuel market and promote renewable energy. Introduced on April 10, 2025, the bill proposes a tax credit for retail dealers and distributors who sell ethanol blends containing 15% to 85% ethanol, incentivizing them to offer these greener fuel options.

Under the bill, starting from January 1, 2023, eligible retailers can claim a tax credit of five cents per gallon sold, directly impacting their state income tax liability. This initiative is designed to encourage the adoption of higher ethanol blends, which proponents argue can reduce greenhouse gas emissions and support local agriculture by utilizing corn-based ethanol.

However, the bill has sparked significant debate. Critics express concerns about the potential economic implications, questioning whether the tax credits could lead to increased fuel prices for consumers. Additionally, there are worries about the environmental impact of increased ethanol production, including land use changes and water resource management.

Supporters, including local farmers and renewable energy advocates, argue that the bill could create jobs in the agricultural sector and reduce dependence on fossil fuels. They emphasize the importance of transitioning to sustainable energy sources and the role of ethanol in achieving that goal.

The bill caps the total amount of tax credits at $5 million per fiscal year, which has raised eyebrows among some lawmakers who fear it may not be enough to meet demand. If the total claims exceed this cap, credits will be apportioned among eligible claimants, potentially limiting the benefits for many retailers.

As the bill moves through the legislative process, its future remains uncertain. If passed, it could significantly alter Missouri's fuel landscape, making higher ethanol blends more accessible while igniting ongoing discussions about the balance between economic growth and environmental stewardship.