Oklahoma Biodiesel Laws and Incentives
State Incentives
Biodiesel Production Tax Credit
For tax years beginning before January 1, 2013, a biodiesel (B100) production facility is allowed a tax credit of $0.20 per gallon of biodiesel produced. An eligible biodiesel facility must have produced at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2008. Producers are also eligible for an expansion credit of $0.20 per gallon of biodiesel produced in excess of the original nameplate capacity that results from expansion of the facility before December 31, 2008. This tax credit can be used for up to 60 months beginning with the first month for which production from the expanded facility is eligible and ending before January 1, 2013. Beginning January 1, 2013, a biodiesel facility may receive a credit of $0.075 per gallon of biodiesel for new production for a period not to exceed 36 consecutive months. To be eligible for this credit, the facility must not have received credits prior to January 1, 2013, or must have expanded the capacity by at least 2 million gallons, first placed into service after January 1, 2013. If the credit allowed exceeds the amount of income taxes due, the excess amount may be carried forward as a credit against subsequent income tax liability for a period not to exceed five years. Additional restrictions apply. (Reference House Bill 1956, 2008, and Oklahoma Statutes 68-2357.67)
Biofuels Tax Exemption
An individual that produces biofuels or biodiesel from feedstock grown on property and used in a vehicle owned by the same individual are exempt from the state motor fuel excise tax. (Reference Oklahoma Statutes 68-500.4 and 68-500.10)
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans
The Oklahoma Department of Central Services has an Alternative Fuels Conversion Loan program to help convert government-owned fleets to operate on alternative fuels. This program provides 0% interest loans for vehicle conversions, for the construction of AFV fueling infrastructure, and for the incremental cost associated with the purchase of an Original Equipment Manufacturer AFV. The program provides up to $10,000 per converted or newly purchased vehicle and up to $150,000 for the development or installation of fueling infrastructure. Repayment of the loan has a maximum seven-year period and repayment is collected through a surcharge in the amount equivalent to the per gallon fuel cost savings from using an alternative fuel. If the price of the alternative fuel does not remain below the price of the conventional fuel that was replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities. (Reference Oklahoma Statutes 74-130.4 and 74-130.5)
Alternative Fuel Vehicle (AFV) Loans
Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an Original Equipment Manufacturer AFV, and for the installation of AFV fueling infrastructure. The repayment of the loan has a maximum six-year period.
Biofuels Research and Development Promotion
The Oklahoma Bioenergy Center (Center) was established within the Department of Commerce to serve as a strategic partnership in the field of bioenergy research in order to assist Oklahoma in being a recognized leader in the fields of research and production of biofuels, bioenergy and related biobased products; advance research capacity of biofuels; enable the competitive and sustainable production of liquid biofuels, including ethanol; and contribute to the national research effort to enable the U.S. to achieve prescribed levels of petroleum independence. The Center represents a research and economic development collaboration between the University of Oklahoma, Oklahoma State University, and the Samuel Roberts Noble Foundation.
State Laws and Regulations
Access to State Alternative Fueling Stations
The Fleet Management Division within the Oklahoma Department of Central Services is authorized to construct, install, acquire, operate, and provide alternative fueling infrastructure for use by state agencies and local governments as well as the public in areas of the state where public access to alternative fuel infrastructure is not readily available. The Department of Central Services must discontinue public access to their fueling infrastructure if a privately owned alternative fueling station opens within a five mile radius. Alternative fuels include natural gas, liquefied petroleum gas, ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference House Bill 1952, 2009)
State Energy Efficiency and Conservation Plans
Each state agency is required to develop and implement an energy efficiency and conservation plan. These agencies should make every effort to include in their plans purchasing preferences for vehicles that utilize alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Senate Bill 833, 2009)
Biofuels Development and Promotion
The Oklahoma Biofuels Development Act was created to encourage the processing, market development, promotion, distribution, and research of fuels derived from grain, ethanol or ethanol components, biodiesel, bio-based lubricants, co-products, or by-products. The Oklahoma Biofuels Development Advisory Committee will serve until June 1, 2010, to conduct a systematic review and study of the ethanol and biodiesel industry in Oklahoma and other states, study the feasibility of developing and enhancing the ethanol and biodiesel industry in Oklahoma, and otherwise encourage market development, promotion, distribution, and research on products derived from grain, ethanol or ethanol components, bio-based products, co-products, or by-products. (Reference Oklahoma Statutes 2-1950.10 and 2-1950.11)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
Under the Alternative Fuels Conversion Act (Act), all school and government vehicles may be converted to operate on an alternative fuel, and all school districts should consider only purchasing school vehicles which have the capability to operate on an alternative fuel. The Act also requires all school and government vehicles capable of operating on an alternative fuel to use the fuel whenever a fueling station is in operation within a five-mile radius of the respective department or district and the price of the alternative fuel is cost competitive. If school and government vehicles must be fueled outside the five-mile radius and no fueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes 74-130.3)
Alternative Fuel Vehicle (AFV) Technician Training
The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in fueling AFVs and in the conversion of any engine to operate on an alternative fuel. This includes Original Equipment Manufacturer engines dedicated to operate on an alternative fuel. Electric vehicles (EVs), electric charging stations, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)
