Can You Make Money on Renewable Fuels?
ATLANTA — Three experts on the renewable fuels market pointed out that there are literally hundreds of millions of dollars in federal and state grants, credits and tax breaks available to help retailers fund their expansion into these next-generation fuels.
Kwik Trip Inc., the La Crosse, Wis.-based convenience store chain with more than 500 stores in three Midwest states, has taken an aggressive plunge into alternative fuels. The retailer’s central fueling center sells 10 different types of fuels, Joel Hirschboeck, superintendent of commercial and alternative fuels, shared during an educational session at the 2016 NACS Show, taking place this week in Atlanta.
“This gives us the ability to test all the behind-the-scenes operations and infrastructure needs of different types of fuel,” explained Hirschboeck, who added that Kwik Trip currently has 34 sites selling compressed natural gas (CNG), 80 sites selling biodiesel, and 93 sites selling E85.
He provided five key questions for retailers to ask themselves around the adoption of renewable fuels:
- Will it prepare you for future consumer demand?
- Does offering more fuel options expand your customer base?
- Does it provide better supply availability?
- Can you predict the future of federal and state government incentives?
- Will it help you improve market share or increase margins?
Retailers looking to upgrade their current equipment, such as replacing old dispensers with EMV-capable ones, can do so at almost no cost by taking advantage of tax credits and grants available for those adding renewable fuels, noted fellow presenter Robert White, vice president of industry relations for the Renewable Fuels Association.
Jeff Hove, vice president of the Petroleum Marketers and Convenience Stores of Iowa (PMCI)/RINAlliance, added that all retailers — big and small — can take advantage of the benefits of “playing the RIN” game. RIN stands for renewable identification number.
Alternative fuel blenders receive RINs in essence as a reward for blending renewable fuels, such as ethanol and diesel, as required under the Renewable Fuel Standard. The RINs generated from fuel blending can be sold on the open market.
“If you don’t do it, your competition will. It’s not just for the refiners,” Hove said.
The 2016 NACS Show, hosted by NACS, the Association for Convenience & Fuel Retailing, continues at Atlanta's Georgia World Congress Center through Oct. 21.