Washington Biodiesel Laws and Incentives

State Incentives

Alternative Fuel Loans and Grants

The Energy Freedom Program (Program) is administered by the Washington Department of Commerce in consultation with other state agencies. The Program includes the Energy Freedom Account, which provides financial and technical assistance for bioenergy production, research, and market development, primarily in the form of loans used to convert farm products, organic wastes, cellulose and biogas into electricity, biofuel, and related coproducts. The Program also includes the Green Energy Incentive Account, which provides financial assistance for alternative fueling infrastructure along Interstate corridors. Funds have yet to be appropriated for these accounts, which are set to expire June 30, 2016. (Reference House Bill 2289, 2009, and Revised Code of Washington 43.325)

Biofuels Retail Tax Exemption

Fuel delivery vehicles and machinery, equipment, and related services that are used for the retail sale or distribution of a biodiesel blend or E85 motor fuel are exempt from state retail fuel sales and use taxes until July 1, 2015. (Reference Revised Code of Washington 82.08.955 and 82.12.955)

Biofuels Tax Deduction

A tax deduction is available for the sale or distribution of biodiesel or E85 motor fuel. This deduction is available until July 1, 2015. (Reference Revised Code of Washington 82.04.4334)

Biofuels Production Tax Exemption

Qualifying buildings, equipment, and land used in the manufacturing of alcohol fuel, biodiesel, or biodiesel feedstocks are exempt from state and local property and leasehold excise taxes for a period of six years. In addition, a reduced Business and Occupation tax rate of 0.138% applies to individuals engaged in alcohol fuel, biodiesel fuel, or biodiesel feedstock manufacturing and is available until July 1, 2009. (Reference Revised Code of Washington 82.04.260, 82.29A.135, and 84.36.635)

State Laws and Regulations

Renewable Fuel Standard

At least 2% of all diesel fuel sold in Washington must be biodiesel or renewable diesel. This requirement will increase to 5% 180 days after the Director of the Washington Department of Agriculture has determined that in-state feedstocks and oil-seed crushing capacity can meet a 3% requirement. Renewable diesel is defined as a diesel fuel substitute produced from non-petroleum renewable sources, including vegetable oils and animal fats, meets the federal registration requirements for fuels and fuel additives and ASTM specification D975. Additionally, at least 2% of the total gasoline sold in the state must be denatured ethanol. The ethanol requirement may be increased if the Director of the Department of Ecology determines that this increase would not jeopardize continued attainment of federal Clean Air Act standards and the Director of the Department of Agriculture determines that the state can economically support the production of higher ethanol blends. All state agencies with jurisdiction over renewable fuel infrastructure, specifically storage, blending, and dispensing equipment, are required to expedite related application and permitting processes. The Governor may suspend these requirements by Executive Order if the standard is temporarily technically or economically infeasible, or poses a significant risk to public safety. (Reference House Bill 1010, 2009, and Revised Code of Washington 19.112.010, 19.112.110 through 19.112.180, and 43.21C)

Alternative Fuels Corridor Pilot Project

Under the Alternative Fuels Corridor Pilot Project, the Washington Department of Transportation may enter into partnership agreements with other public and private entities to use land for alternative fuel corridor pilot projects. These agreements are subject to funding availability. (Reference House Bill 1481, 2009, and Revised Code of Washington 47.38)

Biofuel Quality Program

Through the Biofuels Standards Program (Program), the Washington State Department of Agriculture tests and assesses biofuel quality and quantity in order to resolve any quality issues before the product reaches the consumer. The Program is currently sampling biofuel throughout Washington on a quarterly basis, monitoring and tracking the quality of biofuel, and working with producers and manufacturers to help supply the highest biofuel quality fuel available to consumers. The goal of the program is to create equity in the biofuel marketplace for refiners, suppliers, distributors, and retailers, and protect consumers. (Reference Revised Code of Washington 19.112)

Biodiesel Definition

Biodiesel fuel is defined as a mono alkyl ester of long chain fatty acids derived from vegetable oils or animal fats for use in compression-ignition engines and meets the requirements of the ASTM specification D6751 in effect as of January 1, 2003. (Reference Revised Code of Washington 19.112.010 and 82.04.4334)

Biodiesel Storage Regulations

Underground storage tank regulations apply to biodiesel blends but not to 100% biodiesel (B100). An owner changing the use of an underground storage tank from storage of diesel to B100 must communicate the change to the Washington State Department of Ecology and must first have a site assessment performed by a certified site assessor. (Reference Washington Administrative Code 173-360)

Alternative Fuel Vehicle (AFV) Identification Requirement

Every automobile, truck, motorcycle, motor home, or off-road vehicle that is fueled by an alternative fuel must bear a reflective placard issued by the National Fire Protection Association indicating that the vehicle is powered by an alternative fuel. (Reference Revised Code of Washington 46.37.467)

Biodiesel Use Requirement

At least 20% of all diesel fuel used by state agency vehicles must be biodiesel. The Washington Department of General Administration must assist state agencies by coordinating the purchase and delivery of biodiesel if requested by a state agency, using long-term contracts if necessary, to secure a sufficient and stable supply of biodiesel. For state agencies complying with the U.S. Environmental Protection Agency's ultra-low sulfur diesel (ULSD) mandate, at least 2% biodiesel must be used as an additive to USLD for lubricity, provided that the use of a lubricity additive is appropriate and that performance and cost are comparable with other available lubricity additives. (Reference Revised Code of Washington 43.19.642 and 43.19.646)

Alternative Fuel Use Requirement

Effective June 1, 2015, all state and local government agencies are required to use 100% biofuels or electricity to operate all publicly owned vehicles. To phase in this requirement, all state agencies must achieve 40% biofuel or electricity use by June 1, 2013. To allow the motor vehicle fuel needs of state and local government to be satisfied by Washington-produced biofuels, the Department of General Administration and local governments may contract in advance and execute contracts with public or private producers and suppliers for the purchase of appropriate biofuels. (Reference House Bill 1481, 2009, and Revised Code of Washington 43.19.647 and 43.19.648)

Clean Fuel Vehicle Purchasing Requirement

At least 30% of all new vehicles purchased through a state contract must be clean fuel vehicles; this percentage will increase at the rate of 5% each year. It is preferred that dedicated clean fuel vehicles be purchased. In the event that dedicated clean fuel vehicles are not available or would not meet operation requirements, conventionally powered vehicles may be converted to operate on clean fuel or dual-fuel use. (Reference Revised Code of Washington 43.19.637)

Biofuels Production Contracts

Conservation districts and public development authorities are authorized to enter into crop purchase contracts to produce, sell, and distribute biodiesel produced from Washington feedstocks, cellulosic ethanol, and cellulosic ethanol blended fuels. Additionally, municipal utilities and public utility districts are authorized to produce and distribute biodiesel, ethanol, and ethanol blended fuels, as well as enter into crop purchase contracts for the purpose of producing biodiesel produced from Washington feedstocks, cellulosic ethanol, and cellulosic ethanol blended fuels for use by the utilities and the public. (Reference Revised Code of Washington 35.21.465, 35.92.440, 54.04.190, and 89.08.570)

Climate Change Initiative

The State of Washington has committed to reduce greenhouse gas emissions in the state to 1990 levels by 2020. To reach this goal, the state will do the following: work to ensure that cars sold in the state meet stringent emissions standards, beginning with Model Year 2009 vehicles; work with farmers, entrepreneurs, fuel distributors, and retailers to ensure that biofuels feedstocks are grown in Washington; ensure that refiners, blenders, and distributors of biofuels create jobs in the state; and strive to make it possible for the public to purchase fuel blends that reduce dependence on imported oil. (Reference Executive Order 07-02, 2007)

Global Warming Mitigation Initiative - King County

As directed by local Executive Orders and the King County Acting Locally Initiative, King County departments are required to increase their use of "green" power and biodiesel. At least 50% of King County's total energy use must be generated from renewable energy sources by 2012 for non-transit uses and 2020 for transit uses. Additionally, the amount of biodiesel blends used in the county's vehicles must be increased from the current use of B5 to B20 such that the county uses 2.5 million gallons of biofuels annually.

Fleet Action Plan - Seattle

The Clean Green Fleet Action Plan (PDF 444 KB) aims to increase the use of alternative fuels, reduce fleet fuel use, reduce vehicle emissions, and improve the fuel efficiency of the City of Seattle's (Seattle's) fleet. Download Adobe Reader. Seattle's long-term intent is to continue participating in the Northwest Hybrid Medium and Heavy Duty Truck Consortium and to continue increasing the use of E85 fuel and electric vehicles. Seattle met its original goal to have a fleet that is 100% clean and green, through the use of clean fuels and vehicles that have the highest fuel efficiency and the lowest emissions and meet the needs of Seattle's operations. Seattle also met the specific measures called for in the plan, including a 5% reduction in the fleet's annual fuel use by 2005 as compared to 1999.

Utilities/Private Incentives

Clean and Efficient Fleet Assistance

The Puget Sound Clean Air Agency has launched the Evergreen Fleets program, a comprehensive greening plan and certification system for fleets. Evergreen Fleets provides fleet managers with tools to help "green" public and private fleets, reduce pollution, and save money. Evergreen Fleets provides a step-by-step guide to identify the most effective way for fleet managers to green their fleets, including buying greener vehicles, switching to greener fuels, or improving fleet efficiency.