From the GLRPPR Help Desk archive

January 31st, 2007 by

The GLRPPR Help Desk Librarian is here to answer your P2 questions. Previous questions and answers are archived on the GLRPPR web site and also appear in related sector resource categories. Below is a recent inquiry.

Question: I have heard about a $1/gallon government incentive for biodiesel. I would like some information about who provides the incentive and who gets it.

Answer: This incentive is also known as the Biodiesel and Ethanol (VEETC) Tax Credit. According to the U.S. Department of Energy:

The American Jobs Creation Act of 2004 (Public Law 108-357) created tax incentives for biodiesel fuels and extended the tax credit for fuel ethanol. The biodiesel credit is available to blenders/retailers beginning in January 2005. It also established the Volumetric Ethanol Excise Tax Credit (VEETC), which provides ethanol blenders/retailers with $.51 per pure gallon of ethanol blended or $.0051 per percentage point of ethanol blended (i.e., E10 is eligible for $.051/gal; E85 is eligible for $.4335/gal). The incentive is available until 2010.

Section 1344 of the Energy Policy Act of 2005 extended the tax credit for biodiesel producers through 2008. The credits are $.51 per gallon of ethanol at 190 proof or greater, $1.00 per gallon of agri-biodiesel, and $.50 per gallon of waste-grease biodiesel. If the fuel is used in a mixture, the credit amounts to $.0051 per percentage point ethanol or $.01 per percentage point of agri-biodiesel used or $.0050 per percentage point of waste-grease biodiesel (i.e. E100 is eligible for $.51 per gallon) (Source: U.S. DOE Energy Efficiency and Renewable Energy)

For more details on this program and other incentives for using alternative fuel sources, see:

Getting bucks back for your biodiesel production
This article provides a good overview of the tax credit and related incentives for biodiesel producers.

State & Federal Incentives & Laws
This database captures state and federal laws and incentives related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation-related topics. State-level information is updated annually after each state’s legislative session ends. Federal information is updated after enacted legislation is signed into law.

One Response to “From the GLRPPR Help Desk archive”

  1. Environmental News Bits»Blog Archive » Biodiesel tax incentives Says:

    [...] Over on the GLRPPR Blog, there is a post from the Help Desk archives regarding tax incentives for biodiesel production. • • • [...]

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