Alternative Fuel Grants and Rebates

The Arkansas Alternative Fuels Development Program (Program) provides grants to alternative fuel producers, feedstock processors, and alternative fuel distributors. Producers may be eligible to receive $0.20 per gallon of alternative fuels produced, not to exceed $2 million. Feedstock processors may be eligible to receive up to $3 million or 50% of the project cost, whichever is less, for the construction, modification, alteration, or retrofitting of a feedstock processing facility that is located and operated in Arkansas. Alternative fuel distributors may be eligible to receive up to $300,000 or 50% of the project cost, whichever is less, for assisting with the distribution and storage of alternative fuels or alternative fuel mixtures at distribution facilities that are located and operated in Arkansas. Alternative fuels include biofuel, ethanol, compressed natural gas, or a synthetic transportation fuel.

The Program also provides rebates for the cost of converting diesel or gasoline vehicles to dedicated or bi-fuel natural gas or propane vehicles. The rebate amount is 75% of the conversion system and incremental conversion costs and is determined by the gross vehicle weight rating (GVWR) as shown in the table below.

GVWRRebate Amount
0-8,500 lbs.$5,000
8,501-14,000 lbs.$8,000
14,001-26,000 lbs.$20,000
Over 26,000 lbs.$32,000

A public entity, company, organization, or affiliate may receive up to $50,000 per fiscal year for conversion costs. Other restrictions and requirements may apply. For more information, see the Arkansas Agriculture Department Programs page.

The Arkansas Agriculture Department must prepare and submit an annual progress report to the governor and the legislative council to include the amount and purpose of each rebate, the total amount expended by the rebate recipient for conversion costs, and the results produced or the progress made in converting conventional vehicles to operate on natural gas or propane.

(Reference Arkansas Code 15-13-101, 15-13-102, 15-13-301 to 15-13-306, and 19-6-809)

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