Virginia E85 Laws and Incentives
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 advanced biofuels sold on or after January 1, 2008. A qualified producer of non-advanced neat biofuels, including neat biodiesel, green diesel, and ethanol fuel, is eligible for a grant of $0.10 per gallon of neat biofuels sold in the commonwealth on or after January 1, 2008. To qualify, a producer must produce at least one million gallons of neat biofuels in the calendar year in which the incentive is taken. If a producer began selling neat biofuels prior to January 1, 2008, the producer is eligible for a grant only if its production of neat biofuels for the given calendar year exceeds its production in the 2006 calendar year by at least one million gallons and in future years meets or exceeds that amount. Each producer is only eligible for six calendar years of grants. (Reference House Bill 2001, 2009, and Virginia Code 45.1-393 and 45.1-394)
State 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 B20 available for agency use at 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, the DGS must include in its policies and procedures requirements for the purchase of fuel-efficient, low-emission commonwealth-owned vehicles, as well as procedures for leasing vehicles requirements that give a preference to compact, fuel-efficient, and low-emission vehicles. (Reference Executive Order 48, 2007)
State Energy Plan
The Virginia Energy Plan establishes policies for the commonwealth including the following: 1) support for increasing Virginia's reliance on biodiesel and ethanol, including the use of biodiesel and other alternative fuels in public transportation vehicles; 2) support for federal action that increases the Corporate Average Fuel Economy (CAFE) standards by promoting performance-based tax credits to facilitate the introduction and purchase of advanced technology, fuel-efficient vehicles; and 3) support for federal action that promotes market incentives and education programs to build demand for efficient, cleaner vehicles, including tax incentives for highly efficient vehicles. (Reference Virginia Code 67-101, 67-102, 67-500, 67-501, 67-800, 67-801)
Alternative Fuels Tax
A tax of $0.175 per gallon is imposed on liquid alternative fuels used to operate alternative fuel vehicles (AFVs). Alternatively, an annual license tax of $50.00 per vehicle is imposed on AFVs that are fueled from a private source. (Reference Virginia Code 58.1-2249)
Alternative Fuel License
The following individuals must obtain an alternative fuel license from the Virginia Department of Motor Vehicles: a provider of an alternative fuel; a bulk user of an alternative fuel; a retailer of an alternative fuel; and any person who fuels their alternative fuel vehicle from a private source that does not pay the alternative fuels tax. (Reference Virginia Code 58.1-2244)
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans
The Virginia Board of Education may use funding from the Literary Fund to grant loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)
