Biodiesel Laws and Incentives in Texas
The list below contains summaries of all Texas laws and incentives related to biodiesel.
State Incentives
Alternative Fuel Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Alternative Fueling Facilities Program (AFFP) as part of the Texas Emissions Reduction Plan (TERP). The AFFP offers grants for the construction or reconstruction of an alternative fueling facility for natural gas, hydrogen, biodiesel, propane, electricity, and methanol. Priority will be given to public entities. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.153 and 393.001-393.007)
Biofuel Blend Tax Exemption
The biodiesel, renewable diesel, or ethanol portion of blended fuel containing taxable diesel is exempt from the diesel fuel tax. The biodiesel, renewable diesel, or ethanol fuel blend must be clearly identified on the retail pump, storage tank, and sales invoice in order to be eligible for the exemption.
(Reference Texas Statutes, Tax Code 162.204 and House Bill 3599, 2023)
Clean School Bus Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean School Bus (TCSB) Program as part of the Texas Emissions Reduction Plan (TERP). The TCSB program provides grants to public school districts and charter schools for the incremental costs to replace school buses or install diesel oxidation catalysts, diesel particulate filters, emission-reducing add-on equipment, and other emissions reduction technologies in qualified school buses. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 4 Rule 114.640-114.648 and Texas Statutes, Health and Safety Code 390)
Clean Vehicle and Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Emissions Reduction Incentive Grants (ERIG) Program as part of the Texas Emissions Reduction Plan (TERP). The ERIG program provides grants for various types of clean air projects to improve air quality in the state’s nonattainment areas and other affected counties. Eligible projects include those that involve replacement, retrofit, repower, or lease or purchase of new heavy-duty vehicles; alternative fuel dispensing infrastructure; idle reduction and electrification infrastructure; and alternative fuel use. For more information, including application periods, , see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.101-386.117 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 3 Rule 114.620-114.629)
Seaport and Rail Yard Emissions Reduction Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Seaport and Rail Yard Areas Emissions Reduction (SPRY) Program as part of the Texas Emissions Reduction Plan (TERP). The SPRY program provides grants to eligible entities to replace, repower, or purchase drayage and cargo handling equipment. Eligible projects include heavy-duty on-road vehicles with a gross vehicle weight rating over 26,000 pounds, off-road yard trucks, and other cargo handling equipment. Eligible engines or motors must be powered by electricity or meet federal emissions standards and reduce nitrogen oxide emissions by at least 25% compared to the engine being replaced. For more information, including current application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.181-386.183)
Laws and Regulations
Alternative Fuel Use and Vehicle Acquisition Requirements
State agency fleets with more than 15 vehicles, excluding emergency and law enforcement vehicles, may not purchase or lease a motor vehicle unless the vehicle uses natural gas, propane, ethanol or fuel blends of at least 85% ethanol (E85), methanol or fuel blends of at least 85% methanol (M85), biodiesel or fuel blends of at least 20% biodiesel (B20), or electricity (including plug-in hybrid electric vehicles). Waivers may be granted for fleets if the fleet will operate primarily in areas where neither the state agency or a supplier can reasonably be expected to establish adequate fueling infrastructure for these fuels or the agency is unable to obtain equipment or fueling facilities necessary to operate alternative fuel vehicles at a cost that is no greater than the net costs of using conventional fuels.
Covered state agency fleets must consist of at least 50% of vehicles that are able to operate on alternative fuels and use these fuels at least 80% of the time the vehicles are driven. Covered state agencies may meet these requirements through the purchase of new vehicles or the conversion of existing vehicles. State agencies that purchase passenger vehicles or other ground transportation vehicles for general use must ensure that at least 25% of the vehicles purchased during any state fiscal biennium, other than exempted vehicles, meet or exceed federal Tier II, Bin 3 emissions standards.
(Reference Texas Statutes, Government Code 2158.004-2158.009)
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.