This report explains the costs and benefits of a so-called clean fuel standard in Michigan. We estimate that such a standard would increase gasoline costs by about $350 per year for a typical Michigan household. The extra costs Michigan drivers would pay at the pump will not help upgrade the state's roads and bridges. In fact, the proposal would reduce revenue for roads, because higher prices mean drivers will purchase less fuel, reducing gas tax revenues. The primary beneficiaries of the standard will be companies that profit from producing and selling so-called clean fuels.

The proposed clean fuel standard would increase the state budget, as the program would cost millions to run. Lawmakers would have to either raise taxes or redirect current spending priorities. A clean fuel standard would increase costs for local governments as well.