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 Small-Scale Local Energy Loan Program which offers low-interest loans for qualifying 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. For more information, see the Energy Loan Program website.

(Reference Oregon Revised Statutes 470)

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. For more information, see the Business Oregon Rural Renewable Energy Development Zone website.

(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 (VW) 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%. Any money not expended under this Clean Diesel Engine Fund will fund grants for the reduction of diesel engine emissions as matching funds under the Diesel Emissions Reduction Act program. For more information, see the VW Settlement website.

(Reference Oregon Revised Statutes 468A.795-468A.807)

Laws and Regulations

Alternative Fuel Vehicle Acquisition (AFV) and Fuel Use Requirements

Beginning January 1, 2025, all new light-duty state agency fleet vehicle purchases or leases must be all-electric, plug-in hybrid electric, or hydrogen fuel cell vehicles, to the maximum extent possible. If purchasing or leasing these vehicles is not feasible, state agencies may purchase or lease light-duty AFVs or qualifying low-emission vehicles. Each state agency must develop and report a greenhouse gas reduction baseline and annual reduction targets to the Oregon Department of Administrative Services (DAS). Reports to DAS must include the number of purchases or leases of ZEVs, AFVs, and AFV conversions and the quantity of each type of alternative fuel used annually by state agency fleets.

(Reference Executive Order 20-04, 2020, House Bill 3550, 2023, and Oregon Revised Statutes 267.030 and 283.327)

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.

In 2022, a new goal was implemented to reduce the carbon content of transportation fuels by 20% below 2015 levels by 2030, and 37% below 2015 levels by 2035.

DEQ must conduct rulemaking for the Program to support greater electric vehicle (EV) adoption. DEQ must also develop a method to aggregate and monetize all eligible EV credits in the Program to assist in achieving the state goal of 250,000 registered EVs in Oregon by 2025. For more information, see the DEQ Oregon Clean Fuels Program website.

(Reference Oregon Revised Statutes 468A.266, Oregon Administrative Rules 340-253, and Permanent Administrative Order DEQ 17-2022)

Electric Vehicle (EV) and Vehicle Efficiency Fees

All-electric vehicle owners must pay an annual fee of $115 or a per-mile road use fee of $0.019 per mile through the OReGo program. Hybrid electric vehicles and plug-in hybrid electric vehicles must pay an annual fee in the following amounts:

Vehicle Efficiency Annual Fee
Vehicles with a rating of 0-19 miles per gallon (mpg) $20
Vehicles with a rating of 20-39 mpg $25
Vehicles with a rating of 40 mpg or greater $35

These fees are in addition to standard registration fees. Drivers with EVs or vehicles with ratings over 40 mpg are exempt from additional registration fees if they enroll in the OReGo program. For more information, including how to apply, visit the OReGo program website.

(Reference Oregon Revised Statutes 803.420-803.422)

Renewable Fuels Mandate

All gasoline sold in the state must be blended with at least 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 Standard D4806 complies with the mandate. For the purpose of the mandate, ethanol must meet ASTM Standard 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 Standard 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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