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 dedicated AFV, and 50% of the cost of alternative fueling equipment. AFVs must be registered in Louisiana to receive the tax credit. Alternatively, a taxpayer may take a tax credit of 10% of the cost of the motor vehicle, up to $3,000. For the purpose of this incentive, 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. Restrictions apply. (Reference 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 energy efficient and advanced drivetrain vehicle industry and the biofuels industry. 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. Restrictions may apply. (Reference Louisiana Revised Statutes 47:6037)
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. (Reference Louisiana Revised Statutes 3:3761 and 3:3763)
Laws and Regulations
Authorization for Alternative Fuel Vehicle (AFV) Loans
The Louisiana Department of Natural Resources (Department) will administer the Alternative Fuel Vehicle Revolving Loan Fund to provide loan assistance to local government entities, including cities, parishes, school boards, and local municipal subdivisions for the cost of converting conventional vehicles to operate on alternative fuels, or the incremental cost of purchasing new AFVs. Eligible alternative fuels must meet or exceed federal emissions standards and include compressed natural gas, liquefied natural gas (propane), biodiesel, ethanol, methanol, and electricity. The Department must promulgate rules and regulations necessary to implement the loan program. As of September 2012, funding has not been appropriated. (Reference Louisiana Revised Statutes 33:1419.1-33:1419.6)
Advanced Ethanol Industry Initiative
To develop an advanced (non-corn based) ethanol industry in Louisiana, the following "field-to-pump" requirements must be met:
- Development of an ethanol feedstock other than corn that:
- Is derived solely from Louisiana harvested crops.
- Is capable of an annual yield of at least 600 gallons of ethanol per acre.
- Requires no more than 50% of the water required to grow corn.
- Is tolerant to high temperatures and waterlogging.
- Is resistant to drought and saline-alkaline soils.
- Is capable of being grown in marginal soils, ranging from heavy clay to light sand.
- Requires no more than one-third of the nitrogen required to grow corn.
- Requires no more than one-half of the energy necessary to convert corn into ethanol.
- Development of a small advanced ethanol manufacturing facility network, which reduces the feedstock supply risk, does not burden local water supplies, and provides for a more broad-based economic development.
- Expansion of advanced ethanol supply and demand beyond the 10% blend market by blending ethanol with gasoline at the gas station pump. Blender pumps, directly installed and operated at local gas stations by a qualified small advanced ethanol manufacturing facility, should offer the consumer a less expensive substitute for unleaded gasoline in the form of ethanol blends of 10% (E10), 20% (E20), 30% (E30), and 85% (E85).
Alternative Fuel and Advanced Vehicle and Infrastructure 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.State agencies may acquire infrastructure to fuel AFVs. If the agency acquires or leases infrastructure it must recoup the cost of the equipment through reduced costs of operating the AFVs within 48 months.(Reference House Bill 1213, 2012, and 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 Biofuel Panel.
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 of Agriculture and Forestry will adopt rules and regulations requiring incentives to compensate for any costs associated with achieving the minimum ethanol and biodiesel standards.
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.
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. (Reference Louisiana Revised Statutes 3:3712)