Oklahoma Laws and Incentives for Biodiesel

The list below contains summaries of all Oklahoma laws and incentives related to Biodiesel.

State Incentives

Biodiesel Production Tax Credit

For tax years beginning before January 1, 2013, a biodiesel production facility may qualify for a tax credit of $0.20 per gallon of biodiesel produced for up to 60 months, beginning with the first month for which the facility is eligible for the credit. An eligible biodiesel facility must have produced at least 25% of its original design capacity on or before December 31, 2008, and must maintain a production rate of at least 25% of its original design capacity for at least six months after the first month for which it is eligible to receive the credit. Producers are also eligible for an expansion credit of $0.20 per gallon of biodiesel produced in excess of the original design capacity that results from expansion of the facility before December 31, 2008. The credit is capped at 25 million gallons of biodiesel per year per biodiesel facility. Producers may use the expansion tax credit for up to 60 months beginning the first month for which production from the expanded facility is eligible and ending before January 1, 2013.

Beginning January 1, 2013, a new or expanded biodiesel facility may receive a credit of $0.075 per gallon of biodiesel for up to 36 consecutive months for new fuel production. To be eligible for this credit, the facility must not have received credits before January 1, 2013, or must have expanded its capacity by at least two million gallons and began operation after January 1, 2013. The credit will be capped at ten million gallons of biodiesel per year per biodiesel facility. If the credit allowed exceeds the amount of income taxes due, the excess amount may be carried forward as a credit against subsequent income tax liability for up to five years. Additional restrictions may apply.

(Reference Oklahoma Statutes 68-2357.67)

Biofuels Tax Exemption

An individual that produces biodiesel or other biofuels from feedstocks grown on their property and uses that fuel in a vehicle they own is exempt from the state motor fuel excise tax. (Reference Oklahoma Statutes 68-500.4 and 68-500.10)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Oklahoma Department of Central Services' Alternative Fuels Conversion Loan program provides 0% interest loans to government fleets for converting vehicles to operate on alternative fuels, the construction of AFV fueling infrastructure, and the incremental cost associated with the purchase of an original equipment manufacturer AFV. The program provides up to $10,000 per converted or newly purchased AFV and up to $300,000 for the development or installation of fueling infrastructure. The borrower must repay the loan within a seven-year period. Repayment is collected through a surcharge on alternative fuel the borrower purchased in the amount equivalent to the per gallon fuel cost savings from using an alternative fuel. If the price of the alternative fuel does not remain below the price of the conventional fuel that it replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities. (Reference Oklahoma Statutes 74-130.4 through 74-130.5)

Alternative Fuel Vehicle (AFV) Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an original equipment manufacturer AFV, and for the installation of AFV fueling infrastructure. The repayment of the loan has a maximum six-year period.

Laws and Regulations

Access to State Alternative Fueling Stations

The Oklahoma Department of Central Services Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure for state agencies and local government use as well as the public in areas of the state where public access to alternative fuel infrastructure is not readily available. The Department of Central Services must discontinue public access to their fueling stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, liquefied petroleum gas (propane), ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference Oklahoma Statutes 74-78)

State Energy Efficiency and Conservation Plans

Each state agency must develop and implement an energy efficiency and conservation plan. As part of its plan, each agency should make every effort to include purchasing preferences for vehicles that use alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Oklahoma Statutes 27A-3-4-106)

Biodiesel Definition and Specifications

Biodiesel is defined as a fuel that is comprised only of mono-alkyl esters of long chain fatty acids, is produced from vegetable oils or animal fats, and meets ASTM specification D6751. A biodiesel blend is a blend of biodiesel meeting ASTM specification D6751 and petroleum-based diesel fuel. (Reference Oklahoma Statutes 52-325)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

All school and government fleets may convert their vehicles to operate on alternative fuels, and all school districts should consider purchasing only vehicles able to operate on alternative fuels. School and government vehicles capable of operating on an alternative fuel must use the fuel whenever a fueling station is located within a five-mile radius of the respective department or district and the price of the alternative fuel is cost competitive. If school and government vehicles must be fueled outside the five-mile radius and no fueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes 74-130.3)

Alternative Fuel Technician Training

The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in fueling alternative fuel vehicles and in the conversion of any engine to operate on an alternative fuel. This includes original equipment manufacturer engines dedicated to operate on an alternative fuel. Electric vehicles (EVs), EV charging infrastructure, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)