Biodiesel Laws and Incentives in Oregon

The list below contains summaries of all Oregon laws and incentives related to biodiesel.

State Incentives

Alternative Fuel Loans

The Oregon Department of Energy administers the State Energy Loan Program (SELP) which offers low-interest loans for qualified projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling infrastructure, and fleet vehicles. Loan recipients must complete a loan application and pay a loan application fee. SELP is not currently accepting new loan applications (confirmed April 2018). For more information, including application forms and interest rate and fee information, see the SELP website. (Reference Oregon Revised Statutes 470)

Biodiesel Tax Exemption

Biodiesel blends containing at least 20% biodiesel derived from used cooking oil are exempt from the $0.34 per gallon state fuel excise tax. The exemption does not apply to fuel used in vehicles with a gross vehicle weight rating of 26,001 pounds or more, fuel not sold in retail operations, or fuel sold in operations involving fleet fueling or bulk sales. The exemption expires after December 31, 2019. (Reference Oregon Revised Statutes 319.530)

Biofuels Production Property Tax Exemption

Property used to produce biofuels, including ethanol and biodiesel, may be eligible for a property tax exemption if it is located in a designated Rural Renewable Energy Development Zone. The Oregon Business Development Department must receive and approve an application from a qualified rural area to designate the area as a Rural Renewable Energy Development Zone. (Reference Oregon Revised Statutes 285C.350 through 285C.370)

Clean School Bus Grants

The Oregon Department of Environmental Quality must use funds awarded to Oregon through the Volkswagen Environmental Mitigation Trust and deposited in the Clean Diesel Engine Fund, to award grants to owners and operators of at least 450 school buses powered by diesel engines. Eligible vehicles include buses that have at least three years of remaining useful life. Grants will be available for 30%, up to $50,000, for the purchase of a new bus or up to 100% of the cost to retrofit a school bus with emissions-reducing parts or technology that reduce diesel particulate matter emissions by at least 85%. (Reference Oregon Revised Statutes 468A.795-468A.803)

Laws and Regulations

Alternative Fuel Vehicle (AFV) Acquisition, Fuel Use, and Emissions Reductions Requirements

All state agencies and transit districts must purchase AFVs and use alternative fuels to operate those vehicles to the maximum extent possible, except in regions where it is not economically or logistically possible to fuel an AFV. Each state agency must develop and report a greenhouse gas reduction baseline and determine annual reduction targets. Reports to the Oregon Department of Administrative Services (DAS) must include the number of purchases or leases of AFVs or AFV conversions and the quantity of each type of alternative fuel used annually by state agency fleets.

DAS and the Oregon Department of Energy (ODOE) must improve the plug-in electric vehicle (PEV) bulk procurement process to reduce costs for state agency PEV purchases. DAS must develop a "Low-Emission Vehicle (LEV) First" policy to encourage state employees to use PEVs or other LEVs in the state fleet. DAS and ODOE must also develop a tool to calculate the long-term return on investment and life-cycle costs of PEVs to inform agencies of potential cost savings. In addition, DAS must inform and support legislative changes that enable increased charging infrastructure and state agency PEV purchases.

(Reference Executive Order 17-21, 2017, Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)

Biodiesel Quality Testing Procedures

Each biodiesel or other renewable diesel producer, distributor, or importer must retain the certificate of analysis for each batch or production lot of B100 sold or delivered in the state for at least one year. The Oregon Department of Agriculture (ODA) or authorized agents may examine these records as necessary. The ODA or authorized agents may also perform on-site testing or obtain samples of biodiesel or other renewable diesel from any producer, bulk facility, or retail location that sells, distributes, transports, hauls, delivers, or stores biodiesel or other renewable diesel. The related testing cost is the responsibility of the business providing the sample. (Reference Oregon Revised Statutes 646.923)

Biofuels Program Impact Studies

The Oregon Department of Energy (ODOE) must conduct periodic impact studies related to the biofuels industry in the state. These studies should evaluate such criteria as: jobs created; current and projected feedstock availability; amount of biofuels blends produced and consumed in the state; cost comparison of biofuels blends and petroleum fuel; environmental impacts; and the extent to which Oregon producers import biofuels or biofuels feedstocks from outside the state. ODOE issued the first Biofuels Impact Study in 2010 and will conduct a study every two years through January 1, 2025. (Reference Oregon Revised Statutes 469B.400)

Clean Transportation Fuel Standards

The Oregon Department of Environmental Quality (DEQ) administers the Oregon Clean Fuels Program (Program), which requires fuel producers and importers to register, keep records of, and report the volumes and carbon intensities of the fuels they provide in Oregon. Phase 2 of the Program, implemented in 2016, requires fuel suppliers to reduce the carbon content of transportation fuels.

DEQ must conduct rulemaking for the Program to support greater plug-in electric vehicle (PEV) adoption. DEQ must also develop a method to aggregate and monetize all eligible PEV credits in the Program to assist in achieving the state goal of 50,000 registered PEVs in Oregon by 2020. For more information, see the DEQ Oregon Clean Fuels Program website.

(Reference Executive Order 17-21, 2017, Oregon Revised Statutes 468A.270, and Oregon Administrative Rules 340-253)

Plug-In Electric Vehicle and Vehicle Efficiency Fees

Beginning January 1, 2020, all-electric vehicle (EV) owners must pay an annual fee of $110. Beginning January 1, 2022, EV owners must pay a fee of $115. Medium-speed EV owners must pay an annual fee of $58. All other vehicles must pay an annual fee in the following amounts:

Vehicle EfficiencyJanuary 1, 2020 through December 31, 2021After December 31, 2021
Vehicles with a rating of 0-19 miles per gallon (mpg)$18$20
Vehicles with a rating of 20-39 mpg$23$25
Vehicles with a rating of 40 mpg or greater$33$35

These fees are in addition to standard registration fees. (Reference Oregon Revised Statutes 803.420-803.422)

Renewable Fuels Mandate

All gasoline sold in the state must be blended with 10% ethanol (E10). Gasoline with an octane rating of 91 or above is exempt from this mandate, as is gasoline sold for use in certain non-road applications. Gasoline that contains at least 9.2% agriculturally derived ethanol that meets ASTM specification D4806 complies with the mandate. For the purpose of the mandate, ethanol must meet ASTM specification D4806. The governor may suspend the renewable fuels mandate for ethanol if the Oregon Department of Energy finds that a sufficient amount of ethanol is not available.

All diesel fuel sold in the state must be blended with at least 5% biodiesel (B5). For the purpose of this mandate, biodiesel is defined as a motor vehicle fuel derived from vegetable oil, animal fat, or other non-petroleum resources, that is designated as B100 and complies with ASTM specification D6751. Renewable diesel qualifies as a substitute for biodiesel in the blending requirement. In addition, diesel fuel blends sold between October 1 and February 28 may contain additives to prevent congealing or gelling. At any time, the Oregon Department of Energy may request a certificate of fuel analysis for biodiesel sold at any non-retail and wholesale biodiesel dealer.

(Reference Oregon Revised Statutes 646.913 through 646.923 and Oregon Administrative Rules 603-027-0410 and 603-027-0420)

More Laws and Incentives

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