Illinois Biodiesel Laws and Incentives
State Incentives
Biofuels Production Facility Grants
The Renewable Fuels Development Program provides grants for the construction or expansion of biodiesel and ethanol production facilities in Illinois. Each new facility must have a production capacity of at least 30 million gallons per year and an existing facility must expand its production capacity by at least 30 million gallons per year to be eligible for funding. The total amount of the grant awarded may be up to 10% of the total construction costs of the facility. (Reference 20 Illinois Compiled Statutes 689/5 and 689/15)
Clean School Bus Program
The Illinois Clean School Bus Program provides funding to assist schools and school districts to reduce emissions from diesel-powered school buses through emission control retrofits; bus replacements; implementation of cleaner fuels, including biodiesel, propane, and natural gas; and support for emissions reduction policies, including those related to idle reduction. Funding may be restricted to certain counties with further funding being secured through federal grants and other resources to implement the program on a statewide basis.
Alternative Fuel Vehicle (AFV) and Alternative Fuel Rebates
The Illinois Alternate Fuels Rebate Program (Program) provides a rebate for 80% of the incremental cost of purchasing an AFV (up to $4,000), 80% of the cost of federally certified AFV conversions (up to $4,000), and for the incremental cost of purchasing alternative fuels. Eligible fuels for the program include E85, diesel fuel blends containing at least 20% biodiesel (B20), natural gas, propane, electricity, and hydrogen. A vehicle is only eligible to receive one rebate in its lifetime. The AFV or conversion system must be purchased from an Illinois-based company or vendor, except if the vehicle is a heavy-duty specialty vehicle that is not sold in Illinois. Only hybrid electric vehicles fueled with alternative fuels are eligible. To be eligible for a fuel rebate, the majority of fuel purchases must be made from Illinois retail stations or fuel suppliers. The E85 fuel rebate is up to $450 per year (depending on vehicle miles traveled) for up to three years for each flexible fuel vehicle that uses E85 at least half the time. The biodiesel fuel rebate (for B20 and higher blends) is for 80% of the incremental cost of the biodiesel fuel, as compared to conventional diesel. The Program is open to all Illinois residents, businesses, government units (except federal government), and organizations located in Illinois. (Reference 415 Illinois Compiled Statutes 120/30)
Alternative Fuel Vehicle (AFV) Incentives
The Illinois Green Fleets Program recognizes and provides additional marketing opportunities for progressive fleets in Illinois that have a significant number of AFVs and use clean, domestically produced fuels.
Biofuels Research and Development
The Renewable Fuels Research, Development, and Demonstration Program is administered by the Illinois Department of Commerce and Economic Opportunity. The goals of this program are to promote and expand the use of biofuels such as ethanol and biodiesel as clean, renewable transportation fuels, and accelerate the commercialization of new renewable fuel technologies and products. The Biofuels Business Planning Grant Program, a subsidiary of the Illinois Renewable Fuels Research, Development, and Demonstration Program, provides grants of up to $25,000 for the development of business plans, engineering studies, design studies, permit applications, and legal work for potential new biofuel facilities in Illinois.
State Laws and Regulations
Biodiesel Production Tax
Beginning July 1, 2007, if a private biodiesel producer's total biodiesel motor fuel production is less than 5,000 gallons per year, the producer is subject to the annual state motor fuel tax. The return and payment of tax for a given year are due by January 20, of the following year. If the biodiesel producer's total production is 5,000 gallons or more per year, the producer must file returns and make state motor fuel tax payments on a monthly basis. The return and payment of tax are due by the 20th day of each calendar month for the preceding calendar month. A private biodiesel fuel producer is defined as a person whose only activities with respect to motor fuel are: 1) the conversion of any biomass materials into biodiesel fuel, which is produced exclusively for personal use and not for sale; or 2) the blending of biodiesel fuel resulting in biodiesel blends, which is produced exclusively for personal use and not for sale. (Reference 35 Illinois Compiled Statutes 505/2, 505/2a, and 505/2d)
Biofuels Labeling Requirement
Fueling devices that dispense retail biodiesel motor fuel in blends of 5% biodiesel or greater must identify the biodiesel and biodiesel blends by the capital letter "B" followed by the numerical value representing the volume percentage of biodiesel fuel, such as B5, B10, B20, or B100. For devices dispensing motor fuel containing between B5 and B20 blends, either the specific blend must be identified, or a phrase such as "biodiesel blend between 5% and 20%" may be used. For blends above B20, the specific blend must be identified. Specific label format and size requirements apply. Devices dispensing motor fuel containing at least 1% ethanol must also be labeled according to specific labeling and size requirements. (Reference 815 Illinois Compiled Statutes 370/4.1)
Biofuels Education and Promotion
The Promote Illinois Ethanol and Biodiesel Act requires state agencies, including state-supported universities and colleges, to provide links from their Web sites to sites containing information on ethanol and biodiesel fuels. The links must connect to Web sites maintained and operated by state agencies and may also include links to private Web sites. (Reference House Bill 271, 2008, and 505 Illinois Compiled Statutes 150/1)
State Energy Independence Plan
The Governor of Illinois developed an energy independence plan that sets a goal of replacing 50% of the state's energy supply with homegrown fuels by 2017. Specifically, in relation to biofuels, the plan will: 1) invest in renewable biofuels by providing financial incentives to build up to 20 new ethanol plants and five new biodiesel plants; and 2) increase the number of gasoline stations that sell biofuels, to ensure that all gasoline stations in the state offer E85 by 2017, and to help the auto industry increase the number of flexible fuel vehicles they produce and increase public awareness about E85.
Biodiesel Blend Use Requirement
The following entities are required to use a biodiesel blend that contains at least 2% biodiesel (B2) when refueling at a bulk central fueling facility: any diesel powered vehicle owned or operated by the state, county or local government, school district, community college, public college or university, or mass transit agency. These entities are required to use B2 where available, unless the vehicle engine is designed or retrofitted to operate on a higher percentage of biodiesel or on ultra low sulfur diesel fuel. Biodiesel is defined as a renewable fuel conforming to ASTM standard D6751 and registered with the U.S. Environmental Protection Agency. (Reference 625 Illinois Compiled Statutes 5/12-705.1 and 415 Illinois Compiled Statutes 120/10)
State Agency Vehicle Acquisition Priorities and Biofuels Use
The Illinois Department of Central Management Services (CMS) is directed to take all actions necessary to enable the procurement of 2% biodiesel fuel blends (B2) for the state's diesel vehicle fleet and also investigate ways to increase availability of E85 for the state's flexible fuel vehicle (FFV) fleet. The CMS is directed to advise the Illinois Department of Commerce and Economic Opportunity in developing a plan to facilitate the use of E85 and B2 in the state fleet and expand the E85 and biodiesel fueling infrastructure. Additionally, the directors of all executive agencies using the state's fleet of FFVs are directed to implement policies and procedures requiring state employees to use E85 and B2 in state vehicles whenever practical. Furthermore, state agencies are permitted to establish priorities for the acquisition of FFVs, especially hybrid electric vehicles that are capable of using E85, as well as diesel vehicles capable of using biodiesel. (Reference Executive Order 7, 2004 (PDF 113 KB)) Download Adobe Reader
Advanced Vehicle Acquisition and Biodiesel Fuel Use Requirement
All gasoline-powered vehicles purchased from state funds after July 1, 2007, must be flexible fuel vehicles (FFVs) or fuel efficient hybrid electric vehicles (HEVs). FFVs are defined as automobiles or light trucks that operate on either gasoline or E85 (85% ethanol, 15% gasoline). Fuel efficient HEVs are defined as automobiles or light trucks that use a gasoline or diesel engine and an electric motor to provide power and gain at least a 20% increase in combined U.S. Environmental Protection Agency city-highway fuel economy over the equivalent or most-similar conventionally-powered model. Furthermore, any vehicle purchased from state funds that is fueled by diesel fuel must be certified by the manufacturer to run on 5% biodiesel (B5) fuel. The Chief Procurement Officer is permitted to determine that certain vehicle procurements are exempt from these requirements based on intended use or other reasonable considerations such as health and safety of Illinois citizens. (Reference 30 Illinois Compiled Statutes 500/25-75)
Biodiesel Tax Exemption
Sales and use taxes apply to 80% of the proceeds from the sale of biodiesel-blended fuels containing between 1% and 10% biodiesel made between July 1, 2003, and December 31, 2013. However, if these taxes are ever imposed at a rate of 1.25%, then the tax on these biodiesel blends will apply to 100% of the proceeds of sales. These taxes do not apply to the proceeds from the sale of biodiesel blends containing more than 10% biodiesel. The taxes will apply to 100% of the proceeds from biodiesel sales made after December 31, 2013. (Reference 35 Illinois Compiled Statutes 120/2-10 and 105/3-10)
Biofuels Preference for State Vehicle Procurement
In awarding contracts that require procurement of vehicles, state agencies are permitted to give preference to an otherwise qualified bidder who will fulfill the contract through the use of vehicles powered by ethanol produced from Illinois corn or biodiesel fuels produced from Illinois soybeans. (Reference 30 Illinois Compiled Statutes 500/45-60)
Alternative Fuel Taxicab Regulation - Chicago
Chicago taxi companies with 50 or more vehicles in their fleet as of April 1, 2006, must operate at least one alternative fuel taxi. No more than 2% of the taxi fleet's licensed taxicabs may be subject to this requirement. (Reference Municipal Code of Chicago 9-112-060 and City of Chicago Rules and Regulations for Taxicab Medallion License Holders Rule 5.01 (PDF 387 KB)) Download Adobe Reader
