New Mexico Biodiesel Laws and Incentives

State Incentives

Biodiesel Blending Tax Credit

A tax credit against the state corporate income tax liability is available for each gallon of diesel fuel blended with a minimum 2% biodiesel (B2). The credit is available until December 31, 2012, and will be phased out as follows: $0.03 per gallon from January 1, 2007, to December 31, 2010; $0.02 per gallon from January 1, 2011, to December 31, 2011; and $0.01 per gallon from January 1, 2012, to December 31, 2012.

A biodiesel blending facility tax credit is also available for up to 30% of the cost of purchasing equipment and for up to 30% of the cost of installing the equipment. The blending facility tax credit is limited to $50,000 per facility.

(Reference New Mexico Statutes 7-2A-23 and 7-9-79.2)

Biofuels Tax Deduction

The cost of biomass materials used for processing into biofuels, biopower, or bio-based products may be deducted in computing the compensating tax due under the Gross Receipts and Compensating Tax Act. Biofuels include biomass converted to liquid or gaseous fuels such as ethanol, methanol, methane, and hydrogen. (Reference New Mexico Statutes 7-9-98)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants

The Clean Energy Grants Program is administered by the Energy Conservation and Management Division of the New Mexico Energy, Minerals, and Natural Resources Department and provides grants for projects utilizing clean energy technologies (including alternative fuel vehicles and fueling infrastructure) and projects that provide clean energy education, technical assistance, and training programs. These grants are provided on a competitive basis to qualifying entities such as municipalities and county governments, state agencies, state universities, public schools, post-secondary educational institutions, and Indian nations, tribes, and pueblos. (Reference New Mexico Statutes 71-7-1 to 71-7-7)

State Laws and Regulations

State Biodiesel Study

The New Mexico Energy, Minerals, and Natural Resources Department (EMNRD) and the Economic Development Department of the New Mexico Department of Agriculture are required to study the state biodiesel industry and evaluate ways to provide incentives to the industry to increase the distribution of biodiesel in the state. The EMNRD must report all study findings and recommendations to the state legislature by December 1, 2009. (Reference House Joint Memorial 33, 2009)

Green Jobs Training Program

Under the Green Jobs Act, the New Mexico Higher Education Department must develop a state plan for the development of green jobs training programs, focusing on rural and tribal communities, by the end of 2010. These programs will train individuals to work in green industries, including the production and distribution of biofuels. The New Mexico Department of Finance and Administration will administer a green jobs fund to support the program. (Reference House Bill 622, 2009)

Biodiesel Blend Mandate

After July 1, 2010, all diesel fuel sold to state agencies, political subdivisions of the state, and public schools for use in operating on-road motor vehicles must contain at least 5% biodiesel (B5). After July 1, 2012, all diesel fuel sold to consumers for use in on-road motor vehicles must contain at least B5. The Director of the New Mexico Department of Agriculture and Secretary of the Energy, Minerals, and Natural Resources Department may suspend these requirements for up to six months if there are insufficient amounts of biodiesel available or if the price of biodiesel significantly exceeds the price of diesel fuel for at least two months. (Reference New Mexico Statutes 57-19-28 and 57-19-29)

State Agency Energy Plan

In order to conserve energy and promote renewable energy development, all state agency fleets in the executive branch must reduce their transportation energy consumption by 20%, based on 2005 levels, by 2015. The New Mexico General Services Department (GSD) must develop an implementation plan to achieve this goal based on energy use per employee. The GSD must also continue to aggressively pursue increased use of renewable fuels by state agency fleets; using renewable fuels does not count towards the energy reduction goal. (Reference Executive Order 07-053, 2007)

State Green Jobs Cabinet

The Green Jobs Cabinet (Cabinet) is directed to prepare a statewide strategic plan for clean energy and clean technology economic development and job creation. As part of this effort, the Cabinet will consider and quantify opportunities and strategies addressing regionally appropriate biofuels production, research, and infrastructure. (Reference Executive Order 09-002, 2009)

Biofuels Use Requirement

By 2010, all cabinet-level state agencies, public schools (K-12), and institutions of higher education are required to take action toward obtaining 15% of their total transportation fuel requirements from renewable fuels such as ethanol and biodiesel. (Reference Executive Order 2005-049, 2005)

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Acquisition Requirements

A minimum of 75% of state government and educational institution fleet vehicles purchased must be HEVs or bi-fuel or dedicated AFVs, which includes plug-in electric vehicles. Vehicles must meet or exceed the corporate average fuel economy standards issued by the National Highway Transportation Safety Administration of the U.S. Department of Transportation. Certified law enforcement pursuit vehicles and emergency vehicles are exempt from this requirement. (Reference Senate Bill 450, 2009, and New Mexico Statutes 13-1B-3)

Alternative Fuel Vehicle (AFV) Acquisition Loans

Up to $5 million is authorized for a revolving loan fund for AFV acquisitions by state agencies, political subdivisions, and educational institutions. The maximum amount of a loan to acquire a vehicle must not exceed the actual cost of acquiring the vehicle or $3,000, whichever is less. Projected fuel cost savings from using the AFV is considered when the loan repayment schedule is developed. (Reference New Mexico Statutes 13-1B)

Alternative Fuels Definition

The definition of an alternative fuel includes natural gas, liquefied petroleum gas, electricity, hydrogen, fuel mixtures containing not less than 85% ethanol or methanol, and fuel mixtures containing not less than 20% vegetable oil, or a water-phased hydrocarbon fuel emulsion in an amount not less than 20% by volume. Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets current ASTM biodiesel standards. (Reference New Mexico Statutes 13-1B-2 and 57-19-27)

Alternative Fuels Tax

The excise tax imposed on an alternative fuel distributed in New Mexico is $0.12 per gallon. Alternative fuels subject to the excise tax include liquefied petroleum gas, compressed natural gas, and liquefied natural gas. Alternative fuel purchased for distribution is not subject to the alternative fuel excise tax at the time of purchase or acquisition, but the tax is due on any alternative fuel at the time it is dispensed or delivered into the tank of a motor vehicle. Owners of alternative fuel vehicles with a Gross Vehicle Weight Rating (GVWR) not exceeding 54,000 pounds (lbs.) may pay an annual tax in lieu of the per gallon tax, according to the following schedule:

Alternative fuel distributed by or used for U.S. government, state government, or an Indian nation, tribe or pueblo purposes, is exempt from the excise tax. Alternative fuel distributors must be licensed by the state. (Reference New Mexico Statutes 7-16B)

Alternative Fuel Vehicle (AFV) Acquisition Requirements - Albuquerque

All motor vehicles purchased by the City of Albuquerque must be dedicated, flexible fuel, or dual-fuel AFVs. Alternative fuels are defined as fuels other than gasoline and 100% petroleum diesel and may include ethanol, biodiesel, natural gas, electricity, propane, or other alternative fuels approved by the city's Chief Administrative Officer. (Reference City of Albuquerque Executive Order 19, 2006)