Make the Most of Legislation

State Biodiesel Programs to Increase Your Bottom Line

Federal legislation has made blending biodiesel more enticing. Learn more about RFS2 and other legislation using the EPA link below.

• $1 per gallon blenders credit
• Renewable Fuel Standards (RFS) requirements

Consumer
Biodiesel blends between B1 and B10 are given a partial exemption of 20% on sales tax until 2013. Blends above B10 are totally exempted on sales until 2013.

Retail
A fuel retailer that distributes blended biodiesel for retail purposes is entitled to a credit of $0.01 per gallon of blended biodiesel distributed. Credit availability is contingent upon funding. For 2008, $1 million was appropriated.

Retail
An income tax credit is available to retail dealers who sell biodiesel blended fuel. Of the total gallons of diesel fuel sold by the retail dealer during the tax year, 50% or more must be biodiesel fuel to be eligible for the tax credit. The tax credit equals $.03/B2 gallons sold during the retail dealer's tax year. This tax credit is repealed on January 1, 2012.

Infrastructure
Provides a cost-share program for the installation or conversion of infrastructure required to establish on-site and off-site terminal facilities that store biodiesel for distribution or to retail sites for blending pumps or injection systems. Three- or five-year cost share agreements can cover 50% or 70% of actual cost, or $30K or $50K respectively, for retail sites. Terminal grants for five year cost share agreements to store, blend, and dispense B2-B98 or B99-B100 can cover 50% of actual costs or $50,000 or $100,000, respectively.

Consumer
B5 = $.03 off fuel tax/gal.

Infrastructure
Matching grant program, Michigan Strategic Fund, provides incentives to retailers to install fuel delivery systems. Existing or new, cannot exceed 75% or 50% of costs up to $3,000-4,000.

RFS
Current B2 requirement on all sales of diesel gallons; beginning May 2009 it goes to B5.

Infrastructure
Cost-share grants to help offset the costs of installing E-85 ethanol tanks and other fuel pumping equipment, of which up to 10% may be used to install or convert to biodiesel fuel pumps.

Consumer
The $0.17 per gallon motor fuel tax does not apply to passenger motor vehicles, certain buses or commercial motor vehicles that are powered by an alternative fuel. Instead, the owners or operators of such vehicles are required to pay an annual alternative fuel decal fee.

No current state incentives.

Retail
A licensed fuel supplier who blends biodiesel into fuel is entitled to an income tax credit in the amount of $0.05 per gallon of B5.

Retail
Retailers who sell biodiesel are eligible for a tax credit of $0.15 per gallon of biodiesel fuel sold using a metered pump at a fueling station in 2008, and $0.13 per gallon of E85 or biodiesel fuel sold in 2009.

Infrastructure
The purchase and installation of new or the conversion of existing facilities to use B20 fuel /refueling equipment. The costs of educational and promotional materials and activities intended for prospective alternative fuel consumers, fuel marketers and others in order to increase the acceptance and use of alternative fuel. The max award for retail conversion of facilities is $5,000 and $20,000 for new facilities. Max award for promotional materials is $2,000.

Consumer
A $0.02 per gallon tax break for a B5 blend. When 35 million gallons are sold, the tax break ends the following quarter.

No current state incentives.