Virginia Incentives and Laws for Ethanol
The list below contains summaries of all Virginia incentives and laws related to Ethanol.
State Incentives
Biofuels Production Grants
The Biofuels Production Incentive Grant Program provides grants to producers of advanced biofuels, specifically fuels derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass or algae. A qualified advanced biofuels producer is eligible for a grant of $0.125 for each gallon of neat (100%) advanced biofuels sold. A qualified producer of non-advanced biofuels, including biodiesel, green diesel, and ethanol fuel, is eligible for a grant of $0.10 per gallon of neat biofuels sold in the commonwealth. To qualify, a producer must begin selling neat biofuels on or after January 1, 2008, and must produce at least one million gallons of neat biofuels before September 30, 2011. If a producer began selling neat biofuels before January 1, 2008, the producer is only eligible for a grant if its production of neat biofuels for the given calendar year exceeds its production in the 2007 calendar year by at least one million gallons and, in future years, continues to meet or exceed that amount. Each producer is only eligible for six calendar years of grants. This program expires June 30, 2017. (Reference Senate Bill 1360, 2011, and Virginia Code 45.1-393 and 45.1-394)
Alternative Fuel and Advanced Vehicle Loans
The Virginia Department of Mines, Minerals and Energy (DMME) offers loans from a revolving loan fund for qualifying alternative fuel and advanced vehicle projects and programs. Eligible entities include state and local governments and authorities, investor-owned utilities, electric cooperatives, municipal utilities, and public bodies that received DMME grants for energy projects through the American Recovery and Reinvestment Act. Activities eligible for loans may include the purchase of alternative fuel or advanced technology vehicles, alternative fueling equipment, or vehicle energy conservation equipment.
Alternative Fuels Grants and Loans
The Alternative Fuels Revolving Fund is used to distribute loans and grants to municipal, county, and state governments to support alternative fuel vehicle (AFV) programs; pay for AFV maintenance, operation, evaluation, or testing; pay for vehicle conversions; or improve alternative fuel infrastructure. Eligible alternative fuels include electricity, hydrogen, and natural gas. Projects with a funding match are given priority in the evaluation process. (Reference Virginia Code 33.1-223.4 and 33.1-223.7)
Alternative Fuel Job Creation Tax Credit
Businesses involved in alternative fuel vehicle (AFV) and component manufacturing, alternative fueling equipment component manufacturing, AFV conversions, and advanced biofuels production are eligible for a job creation tax credit of up to $700 per full-time employee. The credit is allowed in the taxable year in which the job is created and in each of the two succeeding years in which the job is continued. Qualified AFVs include vehicles that operate using natural gas, propane, hydrogen, electricity, or advanced biofuels. This credit is effective for taxable years through December 31, 2014. (Reference Senate Bill 1236, 2011, and Virginia Code 58.1-439.1)
Green Jobs Tax Credit
Qualified employers are eligible for a $500 tax credit for each new green job created that offers a salary of at least $50,000, for up to 350 jobs per employer. The credit is allowed for the first five years that the job is continuously filled. For the purposes of this tax credit, a green job is defined as employment in industries relating to renewable or alternative energy, including hydrogen and fuel cell technology, landfill gas, and biofuels. The tax credit expires on January 1, 2015. (Reference Virginia Code 58.1-439.12:05)
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans
The Virginia Board of Education may use funding from the Literary Fund to provide loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)
Alternative Fuel Public-Private Partnership Solicitation
The Virginia Offices of the Secretary of Administration and the Secretary of Natural Resources released a public-private partnership solicitation outlining their interest in forming partnerships with and among alternative fuel providers, infrastructure developers, vehicle manufacturers, and other alternative fuel industry stakeholders to expand fueling infrastructure and to support alternative fuel use in the commonwealth fleet. Projects proposed under the partnership solicitation may include vehicle conversions or purchases and other elements, and must include a plan for vehicle and infrastructure maintenance. Proposers are asked to outline the financing strategy for the project. Given the commonweath's limited resources, the cost of proposals will be strongly considered. By May 2012, the Virginia Department of General Services and the Department of Mines, Minerals, and Energy must make a recommendation on whether the commonwealth should establish more formal public-private partnership agreements to accomplish the overall goal of transitioning commonwealth vehicles to alternative fuels. (Reference Executive Order 36, 2011)
Registration Exemption for Biofuel Feedstock
Individuals that transport waste kitchen grease for conversion to biofuel are exempt from Virginia Department of Health registration and the associated annual application fee of $100 per vehicle. This exemption only applies if the individual transports the waste kitchen grease in a container with a capacity of less than 275 gallons; and possesses no more than 1,320 gallons of waste kitchen grease, biofuel feedstock derived from kitchen grease, or biofuel at any one time, excluding biofuel contained in vehicle fuel tanks. Other restrictions apply. (Reference Virginia Code 3.2-5508 through 3.2-5516)
Laws and Regulations
Alternative Fuel Use and Fuel-Efficient Vehicle Acquisition Requirements
All agencies and institutions must maximize biodiesel and ethanol use in commonwealth fleet vehicles except where the use of biodiesel will void warranties or incur unreasonable additional costs to the agencies. The Virginia Department of General Services (DGS) must make E85 and biodiesel blends of 20% (B20) available for agency use at specified sites selected based on the locations of commonwealth-owned flexible fuel and diesel vehicles. Agencies and institutions that independently purchase fuel must use E85 and B20 fueling sites to the maximum extent reasonably possible; vehicles used for law enforcement and emergency response are exempt from these requirements. Additionally, DGS policies and procedures must include requirements for the purchase of fuel-efficient, low emissions commonwealth-owned vehicles, as well as requirements for leasing vehicles that give a preference to compact, fuel-efficient, and low emissions vehicles. By January 1, 2012, DGS must establish a plan to replace state-owned or operated vehicles with vehicles that operate using natural gas, electricity, or other alternative fuels, to the greatest extent reasonable, considering available infrastructure, vehicle location and use, capital and operating costs, and potential for fuel savings. All state agencies and institutions must cooperate with DGS in developing and implementing the plan. (Reference House Bill 2282, 2011; Executive Order 82, 2009; and Virginia Code 2.2-1176)
State Energy Plan
The Virginia Energy Plan assesses the commonwealth's primary energy sources and recommends actions to meet the following goals: make Virginia the energy capital of the East Coast by expanding traditional and alternative energy production, jobs, and investment, and increasing energy conservation and efficiency; expand public education about Virginia's energy production and consumption, its effect on the economy, and methods to increase energy efficiency; and maximize investment in clean energy research and development. The plan includes policies to promote alternative fuel and efficient vehicle use, encourage efficient driving techniques, and reduce vehicle miles traveled. (Reference Virginia Code 67-101, 67-102, 67-500, 67-501, 67-800, 67-801)
Alternative Fuel Research and Development Funding
The Virginia Universities Clean Energy Development and Economic Stimulus Foundation will identify, obtain, disburse, and administer funding for alternative fuel and related technology research, development, and commercialization. The funds may be distributed as grants, loans, or through other methods. (Reference Virginia Code 23-299 through 23-302)
Alternative Fuels Tax
Liquid alternative fuels used to operate alternative fuel vehicles (AFVs) are taxed at a rate of $0.175 per gallon. Alternatively, AFVs fueled from a private source are subject to a $50.00 per vehicle annual license tax. (Reference Virginia Code 58.1-2249)
Alternative Fuel License
Alternative fuel providers, bulk users, and retailers; or any person who fuels an alternative fuel vehicle from a private source that does not pay the alternative fuels tax must obtain an alternative fuel license from the Virginia Department of Motor Vehicles. (Reference Virginia Code 58.1-2244)
