Louisiana Laws and Incentives for Ethanol
The list below contains summaries of all Louisiana laws and incentives related to Ethanol.
Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit
The state offers an income tax credit of 50% of the cost of converting a vehicle to operate on an alternative fuel, 50% of the incremental cost of purchasing an original equipment manufacturer AFV, and 50% of the cost of alternative fueling equipment. Alternatively, a taxpayer may take a tax credit of 10% of the cost of the motor vehicle, up to $3,000. To qualify for the tax credit, vehicles must be dedicated AFVs and registered in Louisiana. For the purpose of this incentive, through 2013, alternative fuels include compressed natural gas, liquefied natural gas, liquefied petroleum gas (propane), biofuel, biodiesel, methanol, ethanol, electricity, and any other fuels that meet or exceed federal clean air standards. Beginning January 1, 2014, alternative fuels will be limited to natural gas, propane, non-ethanol based advanced biofuels (excludes flexible fuel vehicles) and electricity if the vehicle has at least four wheels, is primarily for on-street use, can attain a minimum speed of 55 miles per hour, has a minimum battery capacity of four kilowatt-hours, and can be charged externally. Restrictions may apply. (Reference House Bill 681, 2013; Senate Bill 256, 2013; Louisiana Administrative Code Title 61, Section 1913, and Louisiana Revised Statutes 47:6035)
Green Jobs Tax Credit
The state offers a corporate or income tax credit for qualified capital infrastructure projects in Louisiana that are directly related to industries including, but not limited to, the advanced drivetrain vehicle and biofuels industries. The tax credit is for 10% to 25% of the project costs, calculated based on the investment costs, up to $1 million per state-certified green project. The portion of the base investment expended on payroll for Louisiana residents employed in connection with the construction of the project may be eligible for an additional 10% tax credit on the payroll. Annual credits caps apply and credits will be distributed on a first-come, first-served basis to eligible recipients. Restrictions may apply. (Reference Louisiana Revised Statutes 47:6037)
Compressed Natural Gas (CNG) Project Loans
The Louisiana Department of Natural Resources (DNR) administers a revolving loan program to encourage the development, implementation, and deployment of cost-effective projects, including those involving CNG vehicles and fueling infrastructure. The revolving fund is also intended to create additional employment opportunities and other economic development benefits. Up to $5,400,000 will be available for low-interest rate loans for eligible entities to implement qualified projects. For more information, including program guidelines and applications, see the DNR Request for Loan Proposals website. (Reference Louisiana Revised Statutes 33:1419.1-33:1419.6)
Point of Contact
Louisiana Department of Natural Resources, Technology Assessment Division
Phone: (225) 342-1298
Fax: (225) 242-3605
Advanced Ethanol Fuel Blend Research Grants
The Louisiana Department of Agriculture and Forestry (Department) may award demonstration grants for the purchase of blender pump fueling infrastructure that can dispense advanced ethanol blends of 10% (E10), 20% (E20), 30% (E30), or 85% (E85), and for conducting research and developing guidelines on this infrastructure. The Department may also award grants to purchase vehicles for the purpose of conducting research on advanced ethanol blends and/or the vehicle while operating on advanced ethanol blends. Advanced ethanol is a hydrous or anhydrous ethanol derived from sugar or starch, other than corn starch. Grants are dependent on available funding and further restrictions may apply. No grant funds have been designated for fiscal year 2014 (verified September 2013). (Reference Louisiana Revised Statutes 3:3761 and 3:3763)
Laws and Regulations
Alternative Fuel and Advanced Vehicle Acquisition Requirements
The Louisiana Division of Administration must purchase dedicated alternative fuel vehicles (AFVs) capable of operating on natural gas or liquefied petroleum gas (propane), or bi-fuel vehicles capable of operating on conventional fuel or natural gas, propane, or any non-ethanol advanced biofuel. State agency vehicles may be granted a waiver if fueling stations are not available within a 25 mile radius, the agency cannot recoup the incremental cost of the vehicle within 60 months, or the available vehicles do not meet agency specifications. (Reference Louisiana Revised Statutes 33:1418 and 39:364)
Renewable Fuel Standard
Within six months following the point at which monthly production of denatured ethanol produced in Louisiana equals or exceeds a minimum annualized production volume of 50 million gallons, at least 2% of the total gasoline sold by volume in the state must be denatured ethanol. Ethanol is defined an ethyl alcohol that has a purity of at least 99%, exclusive of added denaturants; meets U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives and ASTM specification D4806; and is produced from domestic agricultural or biomass products. This requirement will not be effective until six months after the average wholesale price of a gallon of Louisiana-manufactured ethanol, less any federal tax incentives or credits, is equal to or below the average wholesale price of a gallon of regular unleaded gasoline in Louisiana for a period of not less than 60 days, as determined by the Louisiana Department of Agriculture and Forestry (Department).
Within six months following the point at which monthly production of biodiesel produced in the state equals or exceeds a minimum annualized production volume of 10 million gallons, at least 2% of the total diesel sold by volume in the state must be biodiesel produced from domestically grown feedstock. Biodiesel is a fuel comprised of mono-alkyl esters of long chain fatty acids derived from renewable resources and meeting the requirements of ASTM specification D6751, or a diesel fuel substitute produced from non-petroleum renewable resources such as vegetable oils and animal fats that meet U.S. Environmental Protection Agency fuel and fuel additive requirements.
Alternatively, these requirements may be met through the production of an alternate renewable fuel, defined as a liquid fuel that is domestically produced from renewable biomass, can be used in place of ethanol or biodiesel, and meets the definition of renewable fuel in the Energy Policy Act of 2005. Within six months following the point at which cumulative monthly production of an alternate renewable fuel produced in the state equals or exceeds a minimum annual production volume of 20 million gallons, at least 2% of the total motor fuel sold by volume in the state must be the alternate renewable fuel produced from domestically grown feedstock. This requirement may not exceed 2% of the total motor fuel sold by volume by owners or operators of fuel distribution terminals.
Blenders and retailers will have six months to meet the new minimum ethanol, biodiesel, or alternate renewable fuel content requirements, unless the Division of Weights and Measures determines that the quality or supply of ethanol or biodiesel in the state is insufficient or fuel distributors are unable to blend ethanol due to delays in obtaining permits or constructing ethanol blending or storage equipment. Any combination of alternative fuels, including but not limited to denatured ethanol, biodiesel, and alternative renewable fuel may be used to meet these requirements. Fuels containing ethanol or biodiesel will not be required to be sold in ozone nonattainment areas. The Department will adopt rules and regulations requiring incentives to compensate for any costs associated with achieving the minimum ethanol and biodiesel standards. The Department defines domestically grown feedstock to include any feedstock produced in the United States. Because in-state volume requirements are currently being met through the U.S. Renewable Fuel Standard, the state has not implemented any formal procedures to enforce the regulation.
The Louisiana Legislature encourages in-state restaurants to provide their waste fats, oils, and grease to biodiesel production facilities and store their waste fats, oils, and grease in a manner that facilitates the use of these products in a biodiesel production facility.
(Reference Louisiana Revised Statutes 3:4674, 3:4674.1, and 3:3712)
Biofuels Feedstock Requirements
Renewable fuel production plants operating in Louisiana and deriving ethanol from the distillation of corn must use corn crops harvested in Louisiana to meet at least 20% of the facility's total feedstock requirement. Renewable fuel plants operating in Louisiana and deriving biodiesel from soybeans and other crops must use soybean crops harvested in Louisiana to meet at least 2.5% of the facility's total feedstock requirement. In succeeding years, the minimum percentage of Louisiana-harvested corn and soybeans used to produce renewable fuel in Louisiana facilities must be at least the same percentage of corn and soybeans used nationally to produce renewable fuel as reported by the U.S. Department of Agriculture's Office of the Chief Economist. To ensure that the appropriate amounts of Louisiana-harvested feedstocks are available for renewable fuel production, renewable fuel manufacturing facilities are responsible for communicating their anticipated production levels and specific feedstock requirements to the Department of Agriculture and Forestry 180 days before the start of commercial operation and on an annual basis thereafter. Additionally, all renewable fuel manufacturing plants must provide an annual report to the state that includes certification that the plant has purchased Louisiana feedstock; production levels; the amount, type, and origination of feedstock used; and any financial benefits the state has provided, including grants, financing, and exemptions. (Reference Louisiana Revised Statutes 3:3712)