Oklahoma Incentives and Laws for Ethanol

The list below contains summaries of all Oklahoma incentives and laws related to Ethanol.

State Incentives

Ethanol Production Tax Credit

For tax years beginning before January 1, 2013, an ethanol production facility is allowed a tax credit of $0.20 per gallon of ethanol produced for up to 60 months, beginning with the first month in which the facility is eligible for the credit. An eligible ethanol facility must have produced at least 25% of its original design capacity on or before December 31, 2010, and must maintain an average production rate of at least 25% of its original design capacity for at least six months after the first month for which it is eligible to receive the credit. Producers are also eligible for an expansion credit of $0.20 per gallon of ethanol produced in excess of the original design capacity that results from expansion of the facility before December 31, 2008. This expansion 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 new or expanded ethanol facility is eligible for a credit of $0.075 per gallon of ethanol, before denaturing, for new production for up to 36 consecutive months. To be eligible for this credit, the facility must not have received credits before January 1, 2013, or must have expanded the capacity by at least two million gallons, first placed into service after January 1, 2013. Additional restrictions apply. Due to a moratorium on certain state tax incentives, producers may not claim this tax credit for ethanol produced between July 1, 2010, and June 30, 2012.

(Reference Oklahoma Statutes 68-2357.66)

Ethanol Fuel Retailer Tax Credit

Retailers that sell fuel blends of gasoline containing up to 15% ethanol by volume (E15) are eligible for a motor fuel tax credit of $0.016 per gallon of ethanol blended into gasoline and sold in Oklahoma, as long as the retailer provides a price reduction to the purchaser of the ethanol fuel in the same amount. This incentive is effective unless the federal government mandates the use of reformulated fuel in an area within Oklahoma that is in nonattainment with the National Ambient Air Quality Standards. (Reference Oklahoma Statutes 68-500.10-1)

Biofuels Tax Exemption

An individual that produces biodiesel or other biofuels from feedstocks grown on their property and uses that fuel in a vehicle they own is 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' Alternative Fuels Conversion Loan program provides 0% interest loans to government fleets for converting vehicles to operate on alternative fuels, the construction of AFV fueling infrastructure, and 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 AFV and up to $150,000 for the development or installation of fueling infrastructure. The borrower must repay the loan within a seven-year period. Repayment is collected through a surcharge on alternative fuel the borrower purchased 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 it 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.

Laws and Regulations

Access to State Alternative Fueling Stations

The Oklahoma Department of Central Services Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure for state agencies and local government use 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 stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, liquefied petroleum gas (propane), ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference Oklahoma Statutes 74-78)

State Energy Efficiency and Conservation Plans

Each state agency must develop and implement an energy efficiency and conservation plan. As part of its plan, each agency should make every effort to include purchasing preferences for vehicles that use alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Oklahoma Statutes 27A-3-4-106)

Ethanol Labeling Requirement

Motor fuel containing more than 1% ethanol or methanol may not be sold or offered for sale from a motor fuel dispenser unless the individual selling or offering the fuel for sale prominently displays a label on the pump stating the fuel "Contains Ethanol" or "Contains Methanol" as applicable. The retailer must display the label in a clear, conspicuous, and prominent way on the same side of the motor fuel pump where the price is shown. If a motor fuel pump dispenses fuel that contains at least 10% ethanol (E10), the label must also state the percentage of ethanol by volume. In addition, the person selling motor fuel or offering it for sale must provide the following information to the fuel user if requested: 1) the percentage of ethanol contained in the motor fuel being sold; 2) the percentage of methanol contained in the motor fuel being sold; and 3) if the motor fuel contains methanol, the types and percentages of associated co-solvents in the motor fuel being sold. (Reference Oklahoma Statutes 52-347)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

All school and government fleets may convert their vehicles to operate on alternative fuels, and all school districts should consider purchasing only vehicles able to operate on alternative fuels. School and government vehicles capable of operating on an alternative fuel must use the fuel whenever a fueling station is located 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 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 alternative fuel vehicles 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), EV charging infrastructure, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)