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Oklahoma Biodiesel Laws and Incentives


State Incentives

Biofuels Tax Exemption

Biofuels or biodiesel produced by an individual with feedstocks grown on property owned by the same individual and used in a vehicle owned by the same individual on public roads and highways are exempt from the state motor fuel excise tax. (Reference House Bill 1916, 2007, and Oklahoma Statutes 68-500.4 and 68-500.10)

Biodiesel Production Tax Credit

For tax years beginning after December 31, 2004, and before January 1, 2013, a biodiesel (B100) production facility is allowed a credit of $0.20 per gallon of biodiesel produced. An eligible biodiesel facility must produce at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2008. The credit is allowed for 60 months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2012. An eligible facility may also receive a credit of $0.20 per gallon for biodiesel produced in excess of the original nameplate design capacity which results from expansion of the facility completed on or after the effective date of this act and before December 31, 2008. Beginning January 1, 2013, a biodiesel facility may receive a credit of $0.075 per gallon of biodiesel, for new production for a period not to exceed 36 consecutive months. Additional restrictions apply. (Reference House Bill 1513, 2007, and Oklahoma Statutes 68-2357.67)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Department of Central Services has an Alternative Fuels Loan program to help convert government-owned fleets to operate on alternative fuels. This program provides 0% interest loans for converting vehicles to operate on an alternative fuel, for the construction of fueling infrastructure, and for the incremental cost associated with the purchase of an Original Equipment Manufacturer AFV. The program provides up to $10,000 per converted or newly purchased vehicle and up to $150,000 for fueling infrastructure. Repayment is made from fuel savings during a maximum seven-year period. If the price of alternative fuels does not remain below the price of the conventional fuel that was replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities. (Reference Oklahoma Statutes 74-130.4)

Alternative Fuel Vehicle (AFV) Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an Original Equipment Manufacturer AFV, and for the installation of AFV refueling infrastructure. The repayment of the loan is made from fuel savings during a maximum three-year period.

State Laws and Regulations

Biofuels Development and Promotion

The Oklahoma Biofuels Development Act was created to encourage the processing, market development, promotion, distribution, and research of fuels derived from grain, ethanol or ethanol components, biodiesel, bio-based lubricants, co-products, or by-products. The Oklahoma Biofuels Development Advisory Committee will serve until June 1, 2010, to conduct a systematic review and study of the ethanol and biodiesel industry in Oklahoma and other states, study the feasibility of developing and enhancing the ethanol and biodiesel industry in Oklahoma, and otherwise encourage market development, promotion, distribution, and research on products derived from grain, ethanol or ethanol components, bio-based products, co-products, or by-products. (Reference Oklahoma Statutes 2-1950.10 and 2-1950.11)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

Under the Alternative Fuels Conversion Act, all school and government vehicles may be converted to operate on an alternative fuel, and all school districts should consider only purchasing school vehicles which have the capability to operate on an alternative fuel. The Act also requires all school and government vehicles capable of operating on an alternative fuel to use the fuel whenever a refueling station is in operation within a five-mile radius of the respective department or district and the price of the alternative fuel is cost competitive. If school and government vehicles must be refueled outside the five-mile radius and no refueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes 74-130.3)

Alternative Fuel Vehicle (AFV) Technician Training

The Alternative Fuels Technician Certification Act regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in the fueling of AFVs and the conversion of any engine to an alternative fueled engine. This includes Original Equipment Manufacturer engines dedicated to operate on an alternative fuel. Electric vehicles (EVs), electric charging stations, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)