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Illinois E85 Laws and Incentives


State Incentives

E85 Refueling Infrastructure Grant

Through the Opportunity Returns initiative and a grant from the Illinois Clean Energy Community Foundation, $500,000 in funding is available for the Illinois E85 Clean Energy Infrastructure Development Program to establish new E85 fueling stations at retail gasoline facilities in Illinois. The program, administered by the Illinois Department of Commerce and Economic Opportunity, will provide up to 50% of the total cost for converting an existing facility to dispense E85 (with a maximum grant of $3,000 per fueling station), or up to 30% of the cost to construct a new E85 fueling station or for a major modification to an existing fueling station (with a maximum grant of up to $30,000 per facility).

Clean School Bus Program

The Illinois Clean School Bus Program was established by the Illinois Environmental Protection Agency in November 2003 and provides funding to assist schools and school districts to reduce emissions from diesel-powered school buses through emission control retrofits; implementation of cleaner fuels, including biodiesel, propane, and natural gas; and support for emissions reduction policies, including those related to idle reduction. Funding may be restricted to certain counties with further funding being secured through federal grants and other resources to implement the program on a statewide basis.

Alternative Fuel Vehicle (AFV) and Alternative Fuel Rebates

The Illinois Alternate Fuels Rebate Program (Rebate Program) provides a rebate for 80% of the incremental cost of purchasing an AFV (up to $4,000), 80% of the cost of federally certified AFV conversions (up to $4,000), and for the incremental cost of purchasing alternative fuels. Eligible fuels for the program include E85, diesel fuel blends containing at least 20% biodiesel (B20), natural gas, propane, electricity, and hydrogen. To be eligible, a vehicle must be an on-road vehicle, licensed, and legal to drive on public roads. For all rebates the AFV, conversion system, or alternative fuel must be purchased from an Illinois-based company or vendor. Hybrid electric vehicles are not eligible. The E85 fuel rebate is up to $450, or $340 per year (depending on vehicle miles traveled), for three years for each flexible fuel vehicle that uses E85 at least half the time. The biodiesel fuel rebate (for B20 and higher blends) is for 80% of the incremental cost of the biodiesel fuel, as compared to conventional diesel. The Rebate Program is open to all Illinois residents, businesses, government units (except federal government), and organizations located in Illinois. (Reference 415 Illinois Compiled Statutes 120/30)

Alternative Fuel Vehicle (AFV) Incentives

The Illinois Green Fleets Program recognizes and provides additional marketing opportunities for progressive fleets in Illinois that have a significant number of AFVs and use clean, domestically produced fuels.

Biofuels Research and Development

The Renewable Fuels Research, Development, and Demonstration Program is administered by the Illinois Department of Commerce and Economic Opportunity. The goals of this program are to promote and expand the use of biofuels such as ethanol and biodiesel as clean, renewable transportation fuels, and accelerate the commercialization of new renewable fuel technologies and products. The Biofuels Business Planning Grant Program, a subsidiary of the Illinois Renewable Fuels Research, Development, and Demonstration Program, provides grants of up to $25,000 for the development of business plans, engineering studies, design studies, permit applications, and legal work for potential new biofuels facilities in Illinois.

State Laws and Regulations

State Energy Independence Plan

The Governor of Illinois developed an energy independence plan that sets a goal of replacing 50% of the state's energy supply with homegrown fuels by 2017. Specifically, in relation to biofuels, the plan will: 1) invest in renewable biofuels by providing financial incentives to build up to 20 new ethanol plants and five new biodiesel plants; and 2) increase the number of gasoline stations that sell biofuels, to ensure that all gasoline stations in the state offer E85 by 2017, and to help the auto industry increase the number of flexible fuel vehicles they produce and increase public awareness about E85.

State Agency Vehicle Acquisition Priorities and Biofuels Use

The Illinois Department of Central Management Services (CMS) is directed to take all actions necessary to enable the procurement of 2% biodiesel fuel blends (B2) for the state's diesel vehicle fleet and also investigate ways to increase availability of E85 for the state's flexible fuel vehicle (FFV) fleet. The CMS is directed to advise the Illinois Department of Commerce and Economic Opportunity in developing a plan to facilitate the use of E85 and B2 in the state fleet and expand the E85 and biodiesel fueling infrastructure. Additionally, the directors of all executive agencies using the state's fleet of FFVs are directed to implement policies and procedures requiring state employees to use E85 and B2 in state vehicles whenever practical. Furthermore, state agencies are permitted to establish priorities for the acquisition of FFVs, especially hybrid electric vehicles that are capable of using E85, as well as diesel vehicles capable of using biodiesel. (Reference Executive Order 7, 2004)

Advanced Vehicle Acquisition and Biodiesel Fuel Use Requirement

Effective July 1, 2007, all gasoline-powered vehicles purchased from state funds must be flexible fuel vehicles (FFVs) or fuel efficient hybrid electric vehicles (HEVs). FFVs are defined as automobiles or light trucks that operate on either gasoline or E85 (85% ethanol, 15% gasoline). Fuel efficient HEVs are defined as automobiles or light trucks that use a gasoline or diesel engine and an electric motor to provide power and gain at least a 20% increase in combined U.S. Environmental Protection Agency city-highway fuel economy over the equivalent or most-similar conventionally-powered model. Furthermore, any vehicle purchased from state funds that is fueled by diesel fuel must be certified by the manufacturer to run on 5% biodiesel (B5) fuel. The Chief Procurement Officer is permitted to determine that certain vehicle procurements are exempt from these requirements based on intended use or other reasonable considerations such as health and safety of Illinois citizens. (Reference 30 Illinois Compiled Statutes 500/25-75)

Ethanol Tax Exemption

Sales and use taxes do not apply to ethanol-blended fuels containing between 70% and 90% ethanol sold between July 1, 2003, and December 31, 2013. These taxes apply to 100% of the proceeds from sales made thereafter. (Reference 35 Illinois Compiled Statutes 120/2-10, 105/3-10 and 105/3-44)

Flexible Fuel Vehicle (FFV) Registry

In an effort to support the production of ethanol, and create and expand markets for E85 and other biofuels in the state, the Secretary of State is required to create a database of registered FFVs. The information included in this database should include, but not be limited to, information about the zip code, vehicle make and model, the vehicle identification number of each FFV, and be sorted by the number of vehicles per zip code. The database must be made available to the public in both print and electronic formats. (Reference 415 Illinois Compiled Statutes 120/22)

Biofuels Preference for State Vehicle Procurement

In awarding contracts that require procurement of vehicles, state agencies are permitted to give preference to an otherwise qualified bidder who will fulfill the contract through the use of vehicles powered by ethanol produced from Illinois corn or biodiesel fuels produced from Illinois soybeans. (Reference 30 Illinois Compiled Statutes 500/45-60)

Corn-to-Ethanol Research Pilot Plant

The Energy Conservation and Coal Development Act was amended to continue the Illinois Ethanol Research Advisory Board's responsibility of managing and operating the National Corn-to-Ethanol Research Center (NCERC) Pilot Plant. The aim of the NCERC Pilot Plant is to reduce the cost of new production technologies, equipment, processes, feedstocks, and new value added co- and by-products. The Illinois Ethanol Research Advisory Board has six main responsibilities:

  • Review the annual operating plans and budget of the NCERC Pilot Plant;
  • Advise on research and development priorities and projects to be carried out at the NCERC Pilot Plant;
  • Advise on policies and procedures regarding the management and operation of the NCERC Pilot Plant (including contracts, project selection, and personnel issues);
  • Develop by-laws; and
  • Submit a final report to the Governor and General Assembly outlining the progress, accomplishments and a financial report for the year; and
  • Establish and operate the NCERC at Southern Illinois University at Edwardsville as a State Biorefining Center of Excellence with a focus on areas including the following: performing collaborative research; offering training and educational services; advancing the state biofuels industry; pursuing funding sources; and serving as an independent source for testing and validation.

(Reference House Bill 1313, 2007, 20 Illinois Compiled Statutes 1105/3, and 110 Illinois Compiled Statutes 520/6.5 to 520/6.6)