Officials pitch replacing countercyclical ethanol fund with low‑carbon fuels program

Senate Bill 23‑33 would replace the existing countercyclical ethanol incentive program with a Low Carbon Fuels Fund to help North Dakota ethanol plants finance equipment and practices that reduce carbon intensity and enable participation in emerging low‑carbon markets, witnesses told the House Finance and Taxation Committee.

Doug Goehring, North Dakota Agriculture Commissioner, told the committee the bill would use remaining balances from the existing countercyclical program and continue a revenue stream (from motor vehicle/farm registrations previously dedicated to the old fund) into a new program capped at a legislatively set amount. “The fund would go a long ways in assisting not just our ethanol facilities, but also our producers in the state,” Goehring said. He described eligible costs as equipment and technologies that reduce carbon intensity, including carbon capture and sequestration, energy efficiency upgrades and other improvements.

Industry witnesses urged the committee to approve the replacement fund. Laura Locker, executive director of the North Dakota Ethanol Producers Association, said the bill is modeled on the state’s countercyclical fund and argued that a low‑carbon fund will help ethanol plants compete in markets that reward low carbon intensity—markets in Canada, California and elsewhere that already price lower‑carbon fuels. “This bill ensures the ethanol industry remains competitive in a rapidly evolving market,” Locker said.

Witnesses discussed program mechanics and available sums. The commissioner said the countercyclical program had been funded historically by vehicle‑registration fees and that roughly $6 million remained in the balance that would transfer into the new fund. He and others described program caps discussed in committee: a limit on the total the program could distribute (discussed as $10 million over the life of the program in committee exchanges) and per‑project caps. Testimony referenced federal 45Q tax credits in the context of carbon‑capture projects but emphasized the state fund’s distinct role in helping plants adopt qualifying technologies and improve their carbon‑intensity scores.

Supporters noted market pressure: North Dakota plants that lower carbon intensity can access value‑added markets including sustainable aviation fuel and other regional low‑carbon markets; witnesses said a plant in Georgia had initially imported Brazilian ethanol because U.S. ethanol’s carbon score did not meet a buyer’s threshold. Several commodity groups and the Farmers Union endorsed the bill as a way to preserve and add value to state ethanol production and rural jobs.

Committee members asked about the revenue source and whether moving the countercyclical fund to the new program would change long‑term funding; witnesses said the registration fee stream would remain the funding source under the new program. The hearing record shows support testimony and no recorded opposition in the committee transcript.

Ending: No committee vote was recorded in the transcript for Senate Bill 23‑33; the hearing closed after testimony in support from agriculture and ethanol industry groups.