Missouri Biodiesel Laws and Incentives

State Incentives

Biodiesel Production Incentive

The Missouri Qualified Biodiesel Producer Incentive Fund provides a monthly grant to qualified Missouri biodiesel producers, provided that 1) at least 51% of the production facility is owned by agricultural producers who are residents of the state and who are actively engaged in agricultural production for commercial purposes or 2) at least 80% of the feedstock used by the facility originates in-state. All of the feedstock must originate in the U.S. However, the feedstock requirement may be waived on a month-to-month basis if the facility provides verification that adequate feedstock is not available. The value of the grant is $0.30 per gallon for the first 15 million gallons produced in a fiscal year and $0.10 per gallon for the next 15 million gallons produced in a fiscal year, up to a total of 30 million gallons and for 60 months maximum per producer. This fund is administered by the Missouri Department of Agriculture. Biodiesel is defined according to American Society for Testing and Materials (ASTM) Standard D-6751 or its subsequent standard specifications for biodiesel fuel (B100) blend stock for distillate fuels. This incentive expires December 31, 2009. (Reference House Bill 741, 2007 and Missouri Revised Statutes 142.031)

Biodiesel Fuel Use Incentive

Through the 2011-12 school year, school districts are allowed to establish contracts with nonprofit, farmer-owned new generation cooperatives to purchase biodiesel blends of 20% (B20) or higher for use as bus fuel. Every school district that contracts with an eligible new generation cooperative for biodiesel will receive an additional payment through its state transportation aid payment, to offset the incremental cost of purchasing the biodiesel. (Reference Missouri Revised Statutes 414.433)

Fleet Biodiesel Fuel Use Incentive

The Biodiesel Fuel Revolving Fund uses the money generated by the sale of Energy Policy Act (EPAct) credits to cover the incremental cost of purchasing fuel containing B20 or higher biodiesel blends for use by state fleet vehicles. (Reference Missouri Revised Statutes 414.407)

State Laws and Regulations

Alternative Fuel Vehicle (AFV) Acquisition and Alternative Fuel Use Requirements

Effective January 1, 2008, at least 70% of new vehicles purchased for the state vehicle fleet must be flexible fuel vehicles that can operate on fuel blends of 85% ethanol (E85). Excess acquisitions of AFVs may be credited towards future biennial goals. If a state agency fails to meet a biennial acquisition goal, purchases of any non-AFVs are not permitted until the goals are met or an exemption or goal reduction has been granted. In addition, 30% of the fuel purchased annually for use in state fleet vehicles must be alternative fuels. (Reference Senate Bill 54, 2007 and Missouri Revised Statutes 414.400 and 414.410)

Biodiesel Use Requirement

The Missouri Department of Transportation (MoDOT) is required to develop a program that provides opportunities to use B20 or higher biodiesel blends in its vehicle fleet and heavy equipment that use diesel fuel. At least 75% of the MoDOT vehicle fleet and heavy equipment that uses diesel fuel must be fueled with B20 or higher biodiesel blends, if such fuel is commercially available. The blended biodiesel fuel will be presumed to be commercially available if the incremental cost of purchasing the fuel is not more than $0.25 as compared to conventional diesel fuel. To the maximum extent practicable, MoDOT must obtain funding for the incremental cost of the blended biodiesel fuel from the Biodiesel Fuel Revolving Fund. (Reference Missouri Revised Statutes 414.365)

Alternative Fuel Tax

The $0.17 per gallon motor fuel tax does not apply to passenger motor vehicles, certain buses, or commercial motor vehicles that are powered by an alternative fuel. Instead, the owners or operators of such vehicles are required to pay an annual alternative fuel decal fee as follows (certain restrictions apply):

It is unlawful for any person to operate a motor vehicle required to have an alternative fuel decal upon the highways of this state without a valid decal. No person may fuel alternative fuel vehicles with liquefied petroleum gas (LPG) or natural gas unless the vehicle has a valid decal. (Reference Missouri Revised Statutes 142.803 and 142.869)