California Incentives and Laws for Biodiesel

The list below contains summaries of all California incentives and laws related to Biodiesel.

State Incentives

Alternative Fuel and Advanced Vehicle Career Training

The Clean Technology and Renewable Energy Job Training, Career Technical Education, and Dropout Prevention Program provides grant funding to school districts for occupational training programs that focus on employment in clean technology businesses or renewable energy businesses, such as clean vehicle technologies, or cellulosic ethanol, biodiesel, biomass power, green waste, and fuel cell production. (Reference Senate Bill X1 1, 2011, and California Education Code 54690-54699)

Alternative Fuel and Vehicle Research and Development Incentives

The California Energy Commission (CEC) administers the Alternative and Renewable Fuel and Vehicle Technology Program to increase the use of alternative and renewable fuels and innovative technologies. The CEC must prepare and adopt an annual Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program to determine funding priorities and opportunities and will describe how program funding will be used to complement other public and private investments. Grants and loans are available for projects that:

• Develop and improve alternative and renewable low carbon fuels;
• Optimize alternative and renewable fuels for existing and developing engine technologies;
• Produce alternative and renewable low carbon fuels in California;
• Decrease the overall impact of an alternative and renewable fuel's lifecycle carbon footprint and increase sustainability;
• Expand fuel infrastructure, fueling stations, and equipment;
• Improve light-, medium-, and heavy-duty vehicle technologies;
• Retrofit medium- and heavy-duty on-road and non-road vehicle fleets;
• Expand infrastructure connected with existing fleets, public transit, and transportation corridors; and
• Establish workforce training programs, conduct public education and promotion, and create technology centers.

(Reference Assembly Bill 1314, 2011; California Code of Regulations, Title 13, Chapter 8.1; and California Health and Safety Code 44270-44274.7)

Low Emissions School Bus Grants

The Lower-Emission School Bus Program provides grant funding for the replacement of older school buses and for the purchase of air pollution control equipment for in-use buses. The California Air Resources Board must verify that the air pollution control devices reduce particulate matter emissions by at least 85% for each retrofitted school bus. Public school districts in California that own their buses are eligible to receive funding. Private school transportation providers that contract with public school districts in California to provide transportation services are also eligible to receive funding for the retrofit of in-use buses. New buses purchased to replace older buses may be fueled with diesel or an alternative fuel, provided that the required emissions standards specified in the current guidelines for the Lower-Emission School Bus Program are met. Funds are also available for replacing on-board natural gas tanks on older school buses and for updating deteriorating natural gas fueling infrastructure. Commercially available hybrid electric school buses may be eligible for partial funding. Contact local air districts for more information about grant funding availability and distribution from the Lower-Emission School Bus Program. (Reference Assembly Bill 462, 2011; Senate Bill 570, 2011; and California Health and Safety Code 41081 and 44099))

Employer Invested Emissions Reduction Funding - South Coast

The South Coast Air Quality Management District (SCAQMD) administers the Air Quality Investment Program (AQIP). The AQIP provides funding to allow employers within SCAQMD's jurisdiction to make annual investments into an administered fund to meet employers' emissions reduction targets. The revenues collected are used to fund alternative mobile source emissions/trip reduction programs, including alternative fuel vehicle projects, on an on-going basis. Programs such as low emission, alternative fuel, or zero emission vehicle procurement, and old vehicle scrapping may be considered for funding. Current requests for proposals and funding opportunities are listed on the AQIP website.

Heavy-Duty Diesel Vehicle Vouchers - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District (SJVAPCD) administers two voucher incentive programs to reduce vehicle emissions from heavy-duty diesel trucks. The Voucher Incentive Program (VIP) provides funding for fleets with three or less trucks to replace or retrofit heavy-duty diesel trucks. The Diesel Emissions Reduction Act Voucher Program provides funding for fleets with four or more trucks to replace heavy-duty diesel trucks. Vouchers funded under these programs must achieve emissions reductions beyond those required by law or regulation. Applications for these voucher programs can only be obtained and submitted at an SJVAPCD certified dealership or retrofit installer. Applications will be accepted on a continual basis until funding for the program is exhausted. Applicants must be awarded a voucher from the SJVAPCD prior to ordering and/or purchasing the replacement truck or equipment.

Low Emission Vehicle Incentives and Technical Training - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District administers the REMOVE II program, which provides incentives for the purchase of low emission passenger vehicles, light-duty trucks, small buses, and trucks with gross vehicle weight ratings of 14,000 pounds or less. The purpose of REMOVE II is to encourage the early introduction of low emission vehicles in the San Joaquin Valley. Funding in the amount of $1,000 to $3,000 is available per vehicle according to the emissions certification level and size of the vehicle. Vehicles must be powered by alternative fuel or electric or hybrid electric engines/motors. REMOVE II also includes an Alternative Fuel Vehicle (AFV) Mechanic Training Component that provides incentives to educate personnel on the mechanics, operation safety, and maintenance of AFVs, fueling stations, and tools involved in the implementation of alternative fuel technologies.

Utility/Private Incentives

Biofuel Volume Rebate Program - Propel Fuels

Propel Fuels offers a rebate to qualified fleet customers for monthly purchases of more than 500 gallons of biodiesel blends and E85. Fleet customers must purchase the fuel directly from Propel public retail locations using the Propel CleanDrive Wright Express fleet card. The program offers a rebate of $0.03 per gallon for purchases of less than 1,000 gallons of biofuel per month, and $.05 per gallon for purchases of 1,000 gallons or more per month. The rebate is applied at the end of each monthly billing cycle.

Laws and Regulations

Low Carbon Fuel Standard

California's Low Carbon Fuel Standard (LCFS) Program requires a reduction in the carbon intensity of transportation fuels that are sold, supplied, or offered for sale in the state by a minimum of 10% by 2020. Beginning January 1, 2011, transportation fuel producers and importers must meet specified average carbon intensity requirements for fuel in each calendar year. Carbon intensity reductions are based on reformulated gasoline mixed with 10% corn-derived ethanol and low-sulfur diesel fuel. Liquefied petroleum gas (propane) is exempt from LCFS requirements, as are non-biomass-based alternative fuels that are supplied in California for use in transportation at an aggregated volume of less than 3.6 million gasoline gallon equivalents per year. Other exemptions apply for transportation fuel used in specific applications. The LCFS Program allows producers and importers to generate, acquire, transfer, bank, borrow, and trade credits. Fuel producers and importers regulated under the LCFS must meet quarterly and annual reporting requirements. (Reference California Code of Regulations Title 17, Section 95480-95490; Executive Order S-01-07, 2007; and California Health and Safety Code 38500-38599)

State Transportation Plan

The California Department of Transportation (Caltrans) must update the California Transportation Plan (Plan) by December 31, 2015, and every five years thereafter. The Plan must address how the state will achieve maximum feasible emissions reductions, taking into consideration the use of alternative fuels, new vehicle technology, and tailpipe emissions reductions. Caltrans must prepare and submit an interim report to the California Transportation Commission and to the Senate and Assembly committees related to transportation, environmental quality, natural resources, and local government by December 31, 2012. Caltrans must consult and coordinate with related state agencies, air quality management districts, public transit operators, and regional transportation planning agencies. Caltrans must also provide an opportunity for general public input. Caltrans must submit a final draft of the Plan to the legislature and governor. (Reference California Government Code 65071-65073)

Low Emission Vehicle (LEV) Standards

California's LEV II exhaust emissions standards apply to Model Year (MY) 2004 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles meeting specified exhaust standards. The LEV II standards represent the maximum exhaust emissions for LEVs, Ultra Low Emission Vehicles, and Super Ultra Low Emission Vehicles, including flexible fuel, bi-fuel, and dual-fuel vehicles when operating on an alternative fuel. New MY 2009 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles must meet specified fleet average greenhouse gas (GHG) exhaust emissions requirements. Each manufacturer must comply with these fleet average GHG requirements, which are based on California Air Resources Board calculations. Bi-fuel, flexible fuel, dual-fuel, and grid-connected hybrid electric vehicles may be eligible for an alternative compliance method. Manufacturers may earn credits for fleet average GHG values lower than the fleet average GHG requirement applicable to MY 2012.

As of October 2011, the California Air Resources Board is considering changes to the regulations, referred to as LEV III, which would control smog-causing pollutants and GHG emissions and include efforts to accelerate the production and use of plug-in hybrid electric and zero emission vehicles in the state. See the LEV III Program website for more information.

(Reference California Code of Regulations Title 13, Section 1961-1961.1)

Alternative Fuel and Plug-in Hybrid Electric Vehicle Retrofit Regulations

Converting a vehicle to operate on an alternative fuel in lieu of the original gasoline or diesel fuel is prohibited unless the California Air Resources Board (ARB) has evaluated and certified the retrofit system. ARB will issue certification to the manufacturer of the system in the form of an Executive Order once the manufacturer demonstrates compliance with the emissions, warranty, and durability requirements. A manufacturer is defined as a person or company who manufactures or assembles an alternative fuel retrofit system for sale in California; this definition does not include individuals wishing to convert vehicles for personal use. Individuals interested in converting their vehicles to operate on an alternative fuel must ensure that the alternative fuel retrofit systems used for their vehicles have been ARB certified. For more information, see the ARB Alternative Fuel Retrofit System website.

A hybrid electric vehicle that is Model Year 2000 or newer and is a passenger car, light-duty truck, or medium-duty vehicle may be converted to incorporate off-vehicle charging capability if the manufacturer demonstrates compliance with emissions, warranty, and durability requirements. ARB issues certification to the manufacturer and the vehicle must meet California emissions standards for the model year of the original vehicle.

(Reference California Code of Regulations Title 13, Section 2030-2032, and California Vehicle Code 27156)

Vehicle Acquisition and Petroleum Reduction Requirements

The California Department of General Services (DGS) is responsible for maintaining specifications and standards for passenger cars and light-duty trucks that are purchased or leased for state office, agency, and department use. These specifications include minimum vehicle emissions standards and encourage the purchase or lease of fuel-efficient and alternative fuel vehicles (AFVs). On an annual basis, DGS must compile information including, but not limited to, the number of AFVs and hybrid electric vehicles acquired, the locations of the alternative fuel pumps available for those vehicles, and the total amount of alternative fuels used.

Vehicles the state owns or leases that are capable of operating on alternative fuel must operate on that fuel unless the alternative fuel is not available. Additionally, the California State and Consumer Services Agency, in consultation with DGS and other appropriate state agencies, must develop, implement, and submit to the California Legislature and governor a plan to increase the state fleet's use of alternative fuels, synthetic lubricants, and fuel-efficient vehicles. This must be done by reducing or displacing the fleet's consumption of petroleum products by 10% by January 1, 2012, and 20% by January 1, 2020, as compared to the 2003 consumption level. DGS must also take steps to transfer vehicles between agencies and departments to ensure that the most fuel-efficient vehicles are used and to eliminate the least fuel-efficient vehicles from the state's motor vehicle fleet. DGS must submit annual progress reports to the California Department of Finance, related legislative committees, and the general public via the DGS website.

(Reference Executive Order S-14-09, 2009, and California Public Resources Code 25722.5, 25722.6, and 25722.8)

Alternative Fuel and Vehicle Policy Development

The California Energy Commission must prepare and submit an Integrated Energy Policy Report (IEPR) to the governor on a biannual basis. The IEPR provides an overview of major energy trends and issues facing the state, including those related to transportation fuels, technologies, and infrastructure. The IEPR also examines potential effects of alternative fuels use, vehicle efficiency improvements, and shifts in transportation modes on public health and safety, the economy, resources, the environment, and energy security. The IEPR's primary purpose is to develop energy policies that conserve resources, protect the environment, ensure energy reliability, enhance the state's economy, and protect public health and safety. (Reference California Public Resources Code 25302)

Mobile Source Emissions Reduction Requirements

Through its Mobile Sources Program, the California Air Resources Board has developed programs and policies to reduce emissions from on-road heavy-duty diesel vehicles through the installation of verified diesel emission control strategies (VDECS) and vehicle replacements.

An on-road heavy-duty diesel vehicle rule requires the retrofit and replacement of nearly all privately owned vehicles operated in California with a gross vehicle weight rating (GVWR) greater than 14,000 pounds. School buses owned by private and public entities and federal government owned vehicles are also included in the scope of the rule. The requirements phase in the installation of VDECS on certain heavier in-use vehicles beginning January 1, 2012, and require the replacement of older vehicles starting January 1, 2015. By January 1, 2023, nearly all vehicles must have engines certified to the 2010 engine standard or equivalent. A drayage/port truck rule regulates heavy-duty diesel-fueled vehicles that transport cargo to and from California's ports and intermodal rail facilities. The rule requires that certain drayage trucks be equipped with VDECS and that all applicable vehicles have engines certified to the 2007 emissions standards by January 1, 2014. A public transit agency fleet rule regulates public transit fleets and sets emissions reduction standards for new transit vehicles. A solid waste collection vehicle rule regulates solid waste collection vehicles with a gross vehicle weight rating of 14,000 pounds or more that operate on diesel fuel, have 1960 through 2006 engine models, and collect waste for a fee. The fleet rule for public agencies and utilities requires fleets to install VDECS on vehicles or purchase vehicles that run on alternative fuels or use advanced technologies to achieve emissions requirements by specified implementation dates.

A summary of Requirements for Diesel Truck and Equipment Owners can be found in the Multi-Rule Summary Fact Sheet. (Reference California Code of Regulations Title 13, 2021-2027)

Fleet Emissions Reduction Requirements - South Coast

The South Coast Air Quality Management District (SCAQMD) requires government fleets and private contractors under contract with public entities to purchase lower emission and alternative fuel vehicles. The rule applies to transit bus, school bus, refuse hauler, and other vehicle fleets of at least 15 vehicles that operate in Los Angeles, San Bernardino, Riverside, and Orange counties. (Reference SCAQMD Rules 1186.1 and 1191-1196)