Oregon E85 Laws and Incentives
State Incentives
Biofuels Use Tax Credit
A state resident who purchases gasoline blended with 85% ethanol (E85) or biodiesel blends of at least 99% (B99) for use in an alternative fuel vehicle (AFV) qualifies for an income tax credit of $0.50 per gallon, up to $200 for each AFV that is registered in Oregon and owned or leased by the resident. For the purpose of this tax credit, an AFV is a motor vehicle that can operate using E85 or B99. This incentive is applicable until January 1, 2013. (Reference Oregon Revised Statutes 315.465)
Alternative Fuel Production and Infrastructure Tax Credit
Business owners and others who invest in alternative fuel production and fueling infrastructure projects in Oregon may be eligible for a tax credit of up to 50% of eligible project costs through the Business Energy Tax Credit. Some projects (e.g., propane, compressed natural gas, liquefied natural gas) may only qualify for a tax credit of 35% of eligible costs. The tax credit is filed over five years. For projects with eligible costs of $20,000 or less, the tax credit may be taken in one year. Unused credits can be carried forward up to eight years.
An eligible applicant (a project owner) must meet the following requirements:
1) Be a trade, business, or rental property owner with a business site in Oregon or be an Oregon non-profit organization, tribe, or public entity that partners with an Oregon business or resident;
2) Own or be the contract buyer of the project; and
3) Use the equipment or lease it to another person or business in Oregon.
Non-profit organizations, schools, and other public entities that do not have an Oregon tax liability may receive the credit for an eligible project but must "pass-through" or transfer their project eligibility to a pass-through partner in exchange for a lump-sum cash payment. The Oregon Department of Energy determines the rate that is used to calculate the cash payment. The pass-through option is also available to a project owner with an Oregon tax liability who chooses to transfer his or her tax credit. For additional information on possible tax implications in using the pass-through option, please consult a tax professional.
(Reference Oregon Revised Statutes 316.116, 317.115, 469.160-469.180, and 469.185-469.225)
Alternative Fuel Loans
The Oregon Department of Energy offers a loan program for energy efficiency, renewable resource, and alternative fuel projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling stations, and fleet vehicles. The program issues Oregon general obligation bonds to provide funds for the loans. Loan recipients must complete a loan application and pay a loan application fee. (Reference Oregon Revised Statutes 470.050)
Biofuels Production Property Tax Exemption
Property used to produce biofuels may be eligible for a property tax exemption, provided that it is located in a designated Renewable Energy Development Zone. The Oregon Economic and Community Development Department must receive and approve an application from a qualified rural area to designate the area as a Rural Renewable Energy Development Zone. (Reference Oregon Revised Statutes 285C.350 and 285C.353)
State Laws and Regulations
Provision to Establish Low Carbon Transportation Fuel Standards
The Oregon Environmental Quality Commission (Commission) may adopt low carbon fuel standards for all transportation fuels, including a lifecycle greenhouse gas (GHG) emission standard for the production, storage, transportation and combustion of fuels. The Commission may adopt a schedule to implement standards that reduce average GHG emissions per unit of fuel energy by 10% below 2010 levels by 2020. (Reference House Bill 2186, 2009)
Alternative Fuel Infrastructure Working Group
In order to reduce the state's dependency on gasoline and diesel fuels and to reduce carbon emissions, the Governor of Oregon has convened a Working Group to study and promote alternative fuel vehicles and infrastructure. The Working Group will:
1) Review and evaluate market and policy research on existing alternative fuel infrastructure policies and programs;
2) Identify and encourage opportunities to consistently design, standardize, and operate electric vehicle charging stations;
3) Develop a plan to work with the private sector to build and maintain state alternative fueling stations by October 1, 2010; and
4) Work with the public to ensure that alternative fuel technologies enhance communities and livability and to ensure that the public understands how to utilize investments in infrastructure.
The Working Group is required to provide recommendations to the Governor by December 31, 2009. (Reference Executive Order 08-24, 2008)
Renewable Fuels Mandate
All gasoline sold in the state must be blended with 10% ethanol. This requirement goes into effect within three months after retailers are notified by the Oregon Department of Agriculture (ODA) that Oregon ethanol production has reached 40 million gallons per year. Gasoline containing at least 9.2% agriculturally derived ethanol that meets the standards for ethanol adopted by the ODA, complies with the mandate. For the purpose of the mandate, the ethanol must meet ASTM specification D4806. The governor may suspend the renewable fuels mandate for ethanol if the Oregon Department of Energy finds that ethanol is not available. Beginning in January 2010, gasoline with an octane rating of 91 or above is exempt from this mandate.
All diesel fuel sold in the state must be blended with 2% biodiesel. The biodiesel blending requirement increases to 5% when the production of biodiesel from state sources reaches a level of at least 15 million gallons on an annualized basis. For the purpose of this mandate, biodiesel is defined as a motor vehicle fuel derived from vegetable oil, animal fat, or other non-petroleum resources, that is designated as B100 and complies with ASTM specification D6751. Beginning January 2, 2012, renewable diesel will qualify as a substitute for biodiesel in the blending requirement.
(Reference House Bill 3463 and 3497, 2009, and Oregon Revised Statutes 646.913 and 646.921-646.923)
Biofuels Program Impact Studies
The Oregon Department of Energy must conduct periodic impact studies related to the biofuels industry in the state. These studies should evaluate such criteria as: jobs created; current and projected feedstock availability; amount of biofuels blends produced and consumed in the state; cost comparison of biofuels blends and petroleum fuel; environmental impacts; and the extent to which Oregon producers import biofuels or biofuels feedstocks from outside the state. The Department of Energy will conduct the first study in 2009, and every two years thereafter through January 1, 2025. (Reference Oregon Revised Statutes 318.031)
Regional Climate Change Initiative
Governors of Oregon, Washington, and California approved a series of recommendations for action to combat global warming, as detailed in the West Coast Governors' Global Warming Initiative. It was determined that the three states must act individually and regionally to reduce greenhouse gases (GHGs). The initiative includes adopting standards to reduce GHG emissions from vehicles by expanding markets for efficiency, renewable energy and alternative fuels, including creating a working group on developing hydrogen fuel. Building upon this commitment, Oregon joined other western states and several Canadian provinces and signed an agreement establishing the Western Climate Initiative, a joint effort to reduce GHG emissions and address climate change.
Alternative Fuel Vehicle (AFV) Acquisition, Fuel Use, and Emissions Reductions Requirements
State law requires that all state agencies and transit districts purchase AFVs and use alternative fuels to operate these vehicles to the maximum extent possible, except when it is not economically or logistically possible to purchase or fuel an AFV. Additionally, each state agency is required to develop and report a greenhouse gas reduction baseline and determine annual reduction targets. Reports to the Oregon Department of Administrative Services must include the volume of ethanol and biodiesel used by state agency fleets, as well as any cost savings attributable to driving more fuel-efficient vehicles and using alternative fuels. (Reference Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)
Renewable Fuels Mandate - Portland
All gasoline sold within the Portland city limits must contain a minimum of 10% ethanol (E10), and diesel fuel must contain a minimum of 5% biodiesel (B5) and must meet ASTM D6751 standards. The diesel blend requirement will increase to 10% biodiesel on July 1, 2010. Fuel vendors must place signage denoting the type of biofuels mixture available for sale. A retailer who offers a biodiesel blend of 20% (B20) or greater is exempt from the requirement and is allowed to provide for sale, on the same site or a contiguous site, diesel fuel that does not contain biodiesel. (Reference Portland Policy Documents ENN-6.02)
Biofuels Use Requirement - Portland
All Portland city-owned diesel vehicles must use a minimum B20 biodiesel blend, all city-owned gasoline vehicles must use a minimum of E10 ethanol blended gasoline, and all city-owned flexible fuel vehicles must use E85. (Reference Portland Policy Documents ADM-1.12 and Portland Code and Charter 16.60)
