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Ohio Biodiesel Laws and Incentives


State Incentives

Biofuels Development Funding

The Ohio Bioproducts Development Program, administered by the Third Frontier Commission, has been established to improve the state's infrastructure, create jobs, and stimulate business growth and development. Funding in the form of grants and loans will support the development of bio-based products and the production of advanced energy in the state, including biofuels. (Reference House Bill 554, 2008, and Ohio Revised Code 184.25)

Biofuels Retail Tax Credit

Retailers who sell E85 or biodiesel fuel are eligible for a tax credit of $0.15 per gallon of E85 or biodiesel sold using a metered pump at a fueling station in 2007, and $0.13 per gallon of E85 or biodiesel fuel sold in 2008. (Reference Ohio Revised Code 5733.48 and 5747.77)

Biodiesel School Bus Grant Program

The Ohio Department of Development's B20 Biodiesel School Bus Grant Program allows eligible school districts and county Mental Retardation and Developmental Disabilities organizations with school buses to receive up to 100% of the incremental costs of using B20 fuel compared with regular diesel fuel, up to $25,000 per year. This program will expire in June 2009. (Reference Ohio Revised Code 3327.17)

School Bus Retrofit Grant Program

The Ohio Environmental Protection Agency administers the Clean Diesel School Bus Fund Retrofits Grant Program, which offers grants for retrofits for school buses operating on diesel fuel. Priority is given to school districts in communities that do not meet the federal air quality standards for fine air particulates, and districts that employ additional measures such as anti-idling programs, to reduce emissions from their school bus fleets.

Alternative Fuel and Fueling Infrastructure Grants

The Alternative Fuel Transportation Grant Program provides funding for the purchase and installation of E85 and biodiesel fueling and blending facilities. The maximum grant per retail facility for new construction is $40,000 per fuel type at each location, $10,000 for fueling facility conversions, and $5,000 for marketing existing and new facilities. Clean Fuels Ohio is available to assist retailers in evaluating their suitability for these grants, preparing applications, and helping with direct postcard educational mailings. This program will expire in June 2009. Funds are also available for the purchase and use of alternative fuel by businesses, nonprofit organizations, public school systems, and local governments. (Reference Ohio Revised Code 122.075)

State Laws and Regulations

Regional Biofuels Promotion Plan

Ohio has joined Indiana, Iowa, Kansas, Michigan, Minnesota, South Dakota, and Wisconsin in adopting the Energy Security and Climate Stewardship Platform (Platform) (PDF 2 MB), which establishes shared goals for the Midwest region, including increased biofuels production and use. Specifically, the Platform sets the following goals:

  • Produce commercially available cellulosic ethanol and other low-carbon fuels in the region by 2012;
  • Increase E85 availability at retail fueling stations in the region to 15% of stations by 2015, 20% by 2020, and 33% of all fueling stations in the region by 2025;
  • Reduce the amount of fossil fuel that is used in the production of biofuels by 50% by 2025;
  • By 2025, at least 50% of all transportation fuels consumed by the Midwest will be from regionally produced biofuels and other low-carbon transportation fuels.

The Platform also establishes a regional biofuels corridor program. The program directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the region for biofuels and advanced transportation fuels and to collaborate to create regional E85 corridors. The program requires standardized fuel product coding at fueling stations as well as increased education for retailers about converting existing fueling infrastructure to dispense E85. The state transportation, agriculture, and regulatory officials were required to report their corridor implementation plans to the Midwest Governors Association by April 1, 2008.

Alternative Fuel Vehicle (AFV) Acquisition and Fuel Use Requirements

All new motor vehicles acquired by state agencies must be capable of using alternative fuels and must use that alternative fuel if it is reasonably available and priced. State flexible-fuel vehicles must use at least 60,000 gallons of E85 per calendar year, increasing by 5,000 gallons per year after January 1, 2007. Vehicles that operate on diesel fuel must use at least one million gallons of biodiesel, increasing by 100,000 gallons per year after January 1, 2007. Credits for vehicle acquisition will be issued in accordance with the federal Energy Policy Act of 1992. Any additional credits that an agency earns above their requirements may be sold, with proceeds going to the Biodiesel Revolving Fund to pay for the incremental cost of biodiesel for use in vehicles owned or leased by the state. (Reference Ohio Revised Code 125.831-125.836 and Executive Order 2007-02)

Alternative Fuel Vehicle Conversion

Vehicle emission control systems may not be tampered with unless the action is for the purpose of converting a motor vehicle to operate on an alternative fuel and is in compliance with the standards adopted under the Clean Air Act Amendments. (Reference Ohio Revised Code 3704.16)