Nebraska Biodiesel Laws and Incentives

State Incentives

Biodiesel Production Investment Tax Credit

Investors in Nebraska biodiesel production facilities are eligible to receive a tax credit of up to 30% of the amount invested in the facility, not to exceed $250,000 dollars. The credit is only available for facilities that produce B100, perform all processing in Nebraska, and are at least 51% owned by Nebraska individuals or entities. The tax credit may be reclaimed if the biodiesel production facility remains in operation for less than three years. (Reference Nebraska Legislative Bill 343, 2007).

Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Loans

The Nebraska Energy Office administers the Dollar and Energy Saving Loans Program. The Program makes low-cost loans available for a variety of alternative fuel projects, which include the following: the replacement of conventional vehicles with AFVs; the purchase of new AFVs; the conversion of conventional vehicles to operate on alternative fuels; and the construction or purchase of a refueling station or equipment. Dedicated AFVs are eligible, and loans may go towards a portion of the cost of dual-fuel vehicles. The maximum loan amount is $150,000 per borrower, and the interest rate is 5% or less.

State Laws and Regulations

Alternative Fuel Use

All state employees operating state fleet flexible-fuel or diesel vehicles are required to use E85 or biodiesel blends whenever reasonably available. Additionally, the Nebraska Transportation Services Bureau and Department of Roads are required to take steps to increase access to E85 and B2 for state vehicle operators. (Reference Executive Order 05-03, 2005)

Ethanol and Biodiesel Tax Exemption

Motor fuels sold to an ethanol or biodiesel production facility and motor fuels manufactured at an ethanol or biodiesel facility are exempt from certain motor fuel tax laws enforced by the Motor Fuels Division of the Department of Revenue. (Reference Nebraska Statutes 66-489 and 66-496)

Alternative Fuel Tax and Registration

The Alternative Fuel Tax Act requires any person who operates a motor vehicle powered by an alternative fuel on state highways to purchase an alternative fuel user permit in order to pay their estimated fuel tax liability. Alternative fuels include electricity, solar power, and any other source of energy not otherwise taxed under the motor fuel tax laws. A fee of $75 is assessed at the time the user permit application is submitted to the Motor Fuel Tax Enforcement and Collection Division of the Department of Revenue. Liquefied petroleum gas and compressed natural gas are not included; these fuels are subject to excise taxes imposed under the Compressed Fuel Tax Act. (Reference Nebraska Statutes 66-684 through 66-695)