Oregon Laws and Incentives for Biodiesel

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

State Incentives

Biodiesel Tax Exemption

Beginning January 1, 2014, biodiesel blends containing at least 20% biodiesel derived from used cooking oil are exempt from the state fuel excise tax. The exemption does not apply to fuel used in vehicles with a gross vehicle weight rating of 26,001 pounds or more, fuel not sold in retail operations, or fuel sold in operations involving fleet fueling or bulk sales. The exemption expires after December 31, 2019. (Reference House Bill 2435, 2013, and Oregon Revised Statutes 319.530)

Alternative Fuel School Bus Grant and Loan Program

The Oregon Department of Energy (ODOE) administers the Cool Schools Program, a four-year pilot program to provide technical and financial assistance for energy efficiency or clean energy projects at schools in Oregon. Under this program, school districts may be eligible for grants and loans to retrofit school bus fleets to operate on compressed natural gas, propane, or other alternative fuels, or to operate with highly efficient engine technologies, such as hybrid electric engines. Funds may also be used to replace school buses with buses that operate on these fuels or technologies. This incentive is not currently available for alternative fuel projects (verified September 2013). For more information, please see the ODOE Cool Schools Program website. (Reference Oregon Revised Statutes 470.800 through 470.815)

Alternative Fuel Loans

The Oregon Department of Energy administers the State Energy Loan Program (SELP) which offers low-interest loans for qualified projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling infrastructure, and fleet vehicles. Loan recipients must complete a loan application and pay a loan application fee. For more information, including application forms and interest rate and fee information, see the SELP website. (Reference Oregon Revised Statutes 470)

Biofuels Production Property Tax Exemption

Property used to produce biofuels may be eligible for a property tax exemption if it is located in a designated Renewable Energy Development Zone. The Oregon Business Development Department must receive and approve an application from a qualified rural area to designate the area as a Rural Renewable Energy Development Zone. (Reference Oregon Revised Statutes 285C.350 through 285C.370)

Laws and Regulations

Provision for Establishment of Alternative Fuel Vehicle (AFV) Loan Program

The Oregon Department of Energy must establish an Alternative Fuel Vehicle Revolving Fund to provide loans for the incremental cost of AFVs and AFV conversions. Priority will be given to converting petroleum-powered vehicles to AFVs. Eligible vehicles include those powered by electricity, biofuel, gasoline and alcohol blends with at least 20% alcohol content, hydrogen, natural gas, propane, or any other fuel the U.S. Department of Energy approves that produces lower exhaust emissions or is more energy-efficient than gasoline or diesel. (Reference Senate Bill 583, 2013)

Clean Transportation Fuel Standards

The Oregon Department of Environmental Quality (DEQ) administers the Oregon Clean Fuels Program (Program), which requires fuel producers and importers to register, keep records of, and report the volumes and carbon intensities of the fuels they provide in Oregon. This reporting will allow DEQ and decision makers to assess the feasibility of moving ahead with the next phase of the Program, which would require fuel suppliers to gradually lower greenhouse gas (GHG) emissions of transportation fuels by 10% below 2010 levels. Under current law, the Program ends on December 31, 2015. The second phase will not be implemented unless the legislature removes or extends this end date. For more information, see the DEQ Oregon Clean Fuels Program website. (Reference House Bill 2186, 2009)

Renewable Fuels Mandate

All gasoline sold in the state must be blended with 10% ethanol (E10). Gasoline with an octane rating of 91 or above is exempt from this mandate, as is gasoline sold for use in certain non-road applications. Gasoline that contains at least 9.2% agriculturally derived ethanol that meets ASTM specification D4806 complies with the mandate. For the purpose of the mandate, ethanol must meet ASTM specification D4806. The governor may suspend the renewable fuels mandate for ethanol if the Oregon Department of Energy finds that a sufficient amount of ethanol is not available.

All diesel fuel sold in the state must be blended with at least 5% biodiesel (B5). For the purpose of this mandate, biodiesel is defined as a motor vehicle fuel derived from vegetable oil, animal fat, or other non-petroleum resources, that is designated as B100 and complies with ASTM specification D6751. Renewable diesel qualifies as a substitute for biodiesel in the blending requirement. In addition, diesel fuel blends sold between October 1 and February 28 may contain additives to prevent congealing or gelling.

(Reference House Bill 3448, 2013, Oregon Revised Statutes 646.913-646.923, and Oregon Administrative Rules 603-027-0410 and 603-027-0420)

Biodiesel Quality Testing Procedures

Each biodiesel or other renewable diesel producer, distributor, or importer must retain the certificate of analysis for each batch or production lot of B100 sold or delivered in the state for at least one year. The Oregon Department of Agriculture (ODA) or authorized agents may examine these records as necessary. The ODA or authorized agents may also perform on-site testing or obtain samples of biodiesel or other renewable diesel from any producer, bulk facility, or retail location that sells, distributes, transports, hauls, delivers, or stores biodiesel or other renewable diesel. The related testing cost is the responsibility of the business providing the sample. (Reference Oregon Revised Statutes 646.923)

Biofuels Program Impact Studies

The Oregon Department of Energy (ODOE) must conduct periodic impact studies related to the biofuels industry in the state. These studies should evaluate such criteria as: jobs created; current and projected feedstock availability; amount of biofuels blends produced and consumed in the state; cost comparison of biofuels blends and petroleum fuel; environmental impacts; and the extent to which Oregon producers import biofuels or biofuels feedstocks from outside the state. ODOE issued the first Biofuels Impact Study in 2010 and will conduct a study every two years through January 1, 2025. (Reference Oregon Revised Statutes 469B.400)

Alternative Fuel Vehicle (AFV) Acquisition, Fuel Use, and Emissions Reductions Requirements

All state agencies and transit districts must purchase AFVs and use alternative fuels to operate those vehicles to the maximum extent possible, except when it is not economically or logistically possible to purchase or fuel an AFV. Each state agency must develop and report a greenhouse gas reduction baseline and determine annual reduction targets. Reports to the Oregon Department of Administrative Services must include the volume of ethanol and biodiesel used by state agency fleets, as well as any cost savings attributable to driving more fuel-efficient vehicles and using alternative fuels. (Reference Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)