Arkansas Laws and Incentives for Ethanol

The list below contains summaries of all Arkansas laws and incentives related to Ethanol.

State Incentives

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 motor vehicles to dedicated or bi-fuel compressed natural gas motor vehicles. The rebate amount is 75% of the conversion system and incremental conversion costs. 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.

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

Laws and Regulations

Alternative Fuel Vehicle (AFV) Conversion

Any individual or company who converts a vehicle to operate on an alternative fuel must report the conversion to the Arkansas Department of Finance and Administration within 10 days of the conversion. An owner or operator who fails to report such a conversion may be subject to a penalty. (Reference Arkansas Code 26-62-214)

Alternative Fuels Tax

Excise taxes on alternative fuels are imposed on a gasoline gallon equivalent basis. The tax rate for each alternative fuel type is based on the number of motor vehicles licensed in the state that use the specific fuel, not including vehicles the federal government owns or leases. (Reference Arkansas Code 26-62-201)

Alternative Fuel Definition and Specifications

Alternative fuels include biofuel, ethanol, compressed natural gas, propane gas, or a synthetic transportation fuel. Biofuel is defined as a renewable, biodegradable, combustible liquid or gaseous fuel derived from biomass or other renewable resources that can be used as transportation fuel, combustion fuel, or refinery feedstock and that meets ASTM specifications and federal quality requirements for each category or grade of fuel. Biofuel includes biodiesel or renewable diesel, renewable gasoline, renewable naphtha, biocrude, biogas, and other renewable, biodegradable, mono alkyl ester combustible fuel derived from biomass. Ethanol is ethyl alcohol derived from biomass that meets ASTM D4806-04a and federal quality requirements. Synthetic transportation fuel is a liquid fuel produced from biomass by a gasification process or other refining process that meets any applicable state or federal environmental requirement. (Reference Arkansas Code 15-13-102)