Biodiesel Laws and Incentives in South Dakota
The list below contains summaries of all South Dakota laws and incentives related to biodiesel.
State Incentives
Biodiesel Blend Tax Credit
Licensed biodiesel blenders are eligible for a tax credit for special fuel, including diesel that is blended with biodiesel. The tax credit is granted on a per gallon basis in the amount that the rate for special fuel exceeds the rate for the biodiesel blend. The purpose of the credit is to offset any tax liability resulting from the blending of previously untaxed biodiesel.
(Reference South Dakota Statutes 10-47B-121.1)
Diesel Emission Reduction Grants
The South Dakota Department of Environment and Natural Resources (DENR) administers the Clean Diesel Grant Program for bus diesel emission reduction projects. Projects are funded by South Dakota’s portion of the Volkswagen Environmental Mitigation Trust and the U.S. EPA’s Diesel Emission Reduction Act (DERA) Program. For more information, including how to apply, see the South Dakota DENR Clean Diesel Grant Program website.
Tax Refund for Methanol Used in Biodiesel Production
A licensed biodiesel producer may apply for and obtain a tax refund for state fuel taxes paid on methanol used to produce biodiesel. For more information, including how to apply, see the South Dakota Department of Revenue Motor Fuel Excise Tax website.
(Reference South Dakota Statutes 10-47B-120.1)
Laws and Regulations
Biodiesel Tax
Biodiesel and biodiesel blends are taxed at the state motor fuel excise tax rate of $0.28 per gallon. Beginning the fiscal quarter after which a biodiesel production facility in the state reaches a name plate capacity of at least 20 million gallons per year and fully produces at least 10 million gallons of biodiesel within one year, the tax on biodiesel and biodiesel blends is reduced to $0.26 per gallon. Biodiesel is defined as a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats. Biodiesel must meet the requirements of ASTM Standard D6751 and the U.S. Environmental Protection Agency registration and health effects testing program, as written January 1, 2008. Biodiesel blends are defined as blended special fuel containing a minimum of 5% biodiesel (B5).
(Reference South Dakota Statutes 10-47B-3 through 10-47B-10)
Biofuel Franchising Contract Regulations
Franchise documents may not restrict a franchisee from participating in any of the following activities:
- Installing a biofuel pump or tank, except property leased from the franchisor;
- Converting an existing tank or pump for biofuels use;
- Advertising the sale of biofuels, including listing biofuel availability or prices on signage;
- Selling biofuels;
- Purchasing biofuel from other sources if the franchisor does not offer biofuel;
- Installing or operating an ethanol blender pump, if the pump is approved for use by the appropriate jurisdictional authority; or
- Selling a biofuel in place of one grade of gasoline, if the franchisee is required to sell three grades of gasoline.
Biofuels include biodiesel, biodiesel blends, ethanol, and ethanol blends.
(Reference South Dakota Statutes 37-2-34 through 37-2-37)
Fuel Quality Standards
The South Dakota Department of Public Safety may authorize fuel quality standards and enforce fuel rules that conform to appropriate ASTM standards, including:
- Standards for the maximum volume percentages of ethanol and methanol in alcohol blended fuels;
- A program and prescribed methods for the inspection and testing of alcohol blended fuels, petroleum products, biodiesel, and biodiesel blends;
- Labeling requirements for devices dispensing alcohol blended fuels, biodiesel, and biodiesel blends;
- Standards setting the specifications and tolerance requirements for petroleum products, biodiesel, and biodiesel blends; and
- Regulations for filtering systems used on devices dispensing alcohol blended fuels.
(Reference South Dakota Statutes 37-2-6)
Volkswagen (VW) Settlement Allocation
The South Dakota Department of Environment and Natural Resources may use funds awarded to South Dakota through the VW Environmental Mitigation Trust to issue grants for the reduction of nitrogen oxide air emissions from mobile sources in the state. The funds are deposited into a Clean Air Act Settlement fund.
(Reference 34A-1-63 and 34A-1-64)
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.