Louisiana Biodiesel Laws and Incentives
State Incentives
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit
The state offers an income tax credit worth 50% of the cost of converting a vehicle to operate on an alternative fuel, 50% of the incremental cost of purchasing an original equipment manufactured AFV, and 50% of the cost of constructing an alternative fueling station. Only vehicles registered in Louisiana may receive the tax credit. A taxpayer may instead take a tax credit worth 10% of the cost of the motor vehicle or up to $3,000, whichever is less. For the purpose of this incentive, alternative fuels include compressed natural gas, liquefied natural gas, liquefied petroleum gas, biofuel, biodiesel, methanol, ethanol, electricity, and any other fuels that meet or exceed federal clean air standards. (Reference House Bill 110, 2009, and Louisiana Revised Statutes 47:6035)
Green Jobs Tax Credit
The state offers a corporate or income tax credit for qualified capital infrastructure projects in Louisiana that are directly related to industries including but not limited to the energy efficient and advanced drive train vehicle industry and the biofuels industry. The tax credit is worth up to $1 million per state-certified green project, calculated on the base investment costs of the project, for up to a total of $5 million per year. Other restrictions may apply. (Reference House Bill 733, 2009, and Louisiana Revised Statutes 47:6035)
Biodiesel Equipment and Fuel Tax Exemption
Certain property and equipment used to manufacture, produce, or extract unblended biodiesel, as well as unblended biodiesel used as fuel by a registered manufacturer, are exempt from state sales and use taxes. Unblended biodiesel is defined as B100 fuel that meets ASTM specification D6751. These provisions are effective through June 30, 2012. (Reference Louisiana Revised Statutes 47:301)
State Laws and Regulations
Renewable Fuel Standard
Within six months following the point at which cumulative monthly production of denatured ethanol produced in Louisiana equals or exceeds a minimum annual production volume of 50 million gallons, 2% of the total gasoline sold by volume in the state must be denatured ethanol. Ethanol is defined an ethyl alcohol that has a purity of at least 99%, exclusive of added denaturants, meets U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives and ASTM specification D4806, and is produced from domestic agricultural or biomass products. This requirement will not be effective until six months after the average wholesale price of a gallon of Louisiana-manufactured ethanol, less any federal tax incentives or credits, is equal to or below the average wholesale price of a gallon of regular unleaded gasoline in Louisiana for a period of not less than 60 days, as determined by the Louisiana Biofuel Panel. The Legislature urges the Louisiana Department of Agriculture and Forestry not to implement the minimum ethanol requirements if the requirements raise the price of gasoline by more than $0.02 per gallon.
Within six months following the point at which cumulative monthly production of biodiesel produced in the state equals or exceeds a minimum annual production volume of 10 million gallons, 2% of the total diesel sold by volume in the state must be biodiesel. Biodiesel is defined as a fuel comprised of mono-alkyl esters of long chain fatty acids derived from domestic, renewable resources and meeting the requirements of ASTM specification D6751, or a diesel fuel substitute produced from non-petroleum renewable resources such as vegetable oils and animal fats that meet U.S. Environmental Protection Agency fuel and fuel additive requirements.
Alternatively, these requirements may be met through the production of an alternate renewable fuel, defined as a liquid fuel that is domestically produced from renewable biomass, can be used in place of ethanol or biodiesel, and meets the definition of renewable fuel in the Energy Policy Act of 2005. Within six months following the point at which cumulative monthly production of an alternate renewable fuel produced in the state equals or exceeds a minimum annual production volume of 20 million gallons, 2% of the total motor fuel sold by volume in the state must be the alternate renewable fuel produced from domestically grown feedstock. This requirement may not exceed 2% of the total motor fuel sold by volume by owners or operators of fuel distribution terminals.
Blenders and retailers will have six months to meet the new minimum ethanol, biodiesel, or alternate renewable fuel content requirements, unless the Department of Weights and Measures determines there is an insufficient supply of ethanol or biodiesel in the state. Any combination of alternative fuels, including but not limited to denatured ethanol, biodiesel, and alternative renewable fuel may be used to meet these requirements. Fuels containing ethanol or biodiesel will not be required to be sold in ozone non-attainment areas. The Department of Agriculture and Forestry will adopt rules and regulations requiring incentives to compensate for any costs associated with achieving the minimum ethanol and biodiesel standards.
To further encourage the production of biodiesel from renewable resources, Louisiana restaurants are encouraged to provide their waste fats, oils, and grease to biodiesel production facilities and store their waste fats, oils, and grease in a manner that facilitates the use of these products in a biodiesel production facility.
(Reference House Bill 624, 2009, and Louisiana Revised Statutes 3:4674, 3:4674.1, and 3:3712)
Biofuels Feedstock Requirements
Renewable fuel production plants operating in Louisiana and deriving ethanol from the distillation of corn must use corn crops harvested in Louisiana to meet at least 20% of the facility's total feedstock requirement. Renewable fuel plants operating in Louisiana and deriving biodiesel from soybeans and other crops must use soybean crops harvested in Louisiana to meet at least 2.5% of the facility's total feedstock requirement. In succeeding years, the minimum percentage of Louisiana-harvested corn and soybeans used to produce renewable fuel in Louisiana facilities must be at least the same percentage of corn and soybeans used nationally to produce renewable fuel as reported by the U.S. Department of Agriculture's Office of the Chief Economist. (Reference Louisiana Revised Statutes 3:3712)
