Biodiesel Laws and Incentives in Virginia

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

State Incentives

Agriculture and Forestry Biofuel Production Grants

The Agriculture and Forestry Industries Development Fund provides grants to promote and develop the agriculture and forestry industry in Virginia and create or expand value-added facilities, including qualified biofuel production facilities. Individual grants may not exceed $500,000 or 25% of qualified capital expenditures. Eligible applicants include local governments and other Virginia political subdivisions working with qualified businesses. Additional terms and conditions apply. For more information, see the Virginia Department of Agriculture and Consumer Services website. (Reference Virginia Code 3.2-304)

Alternative Fuel Tax Exemption

Alternative fuel is exempt from taxes if it is sold to a government entity for its exclusive use, a non-profit charitable organization for the purpose of providing charitable services for low-income medical patients, or produced by an agricultural operation and used exclusively for farm use or vehicles of that producer. (Reference Virginia Code 58.1-2250)

Biodiesel Production Tax Credit

Qualified biodiesel and green diesel producers are eligible for a tax credit of $0.01 per gallon of biodiesel or renewable diesel fuels produced. This credit is available for producers who generate up to two million gallons of biodiesel or renewable diesel fuel per year. The annual credit may not exceed $5,000, and producers are only eligible for the credit for the first three years of production. The Virginia Department of Mines, Minerals and Energy must certify qualified producers. For more information, see the Virginia Department of Taxation website. (Reference Virginia Code 58.1-439.12:02)

Biofuel Feedstock Registration Exemption

Individuals that transport waste kitchen grease for conversion to biofuel are exempt from both the Virginia Department of Health registration and the associated annual application fee. This exemption applies to individuals transporting the waste kitchen grease for their own consumption in a container with a capacity of no more than 275 gallons, and to kitchen grease transportation to a biofuel production facility. Eligible facilities may not have a production capacity over 500 gallons per day of biofuel nor possess or control more than 1,320 gallons of kitchen grease, biofuel feedstock derived from kitchen grease, or biofuel at any one time. Other restrictions and requirements apply. For more information, see the Virginia Department of Agriculture and Consumer Services website. (Reference Virginia Code 3.2-5508 through 3.2-5516)

Government Alternative Fuel Vehicle (AFV) Incentive

The Virginia Department of Mines, Minerals and Energy, in collaboration with the Virginia Department of Transportation, offers up to $10,000 to state agencies and local governments for the incremental cost of new or converted AFVs. To be eligible, vehicles must comply with Buy America provisions or qualify for a waiver from the U.S. Department of Transportation Federal Highway Administration, and must be garaged in areas of air quality nonattainment, as recognized by the federal Congestion Mitigation and Air Quality Improvement (CMAQ) program. Current funding applications are due July 1, 2020. For more information, see the Virginia CMAQ Incentive Program website.

Point of Contact
Robin Jones
Virginia Department of Mines, Minerals, and Energy
Phone: (804) 692-3224
robin.jones@dmme.virginia.gov

Green Jobs Tax Credit

Qualified employers are eligible for a $500 tax credit for each new green job created that offers a salary of at least $50,000, for up to 350 jobs per employer. The credit is allowed for the first five years that the job is continuously filled. For the purposes of this tax credit, a green job is defined as employment in industries relating to renewable or alternative energy, including hydrogen and fuel cell technology, landfill gas, and biofuels. The tax credit expires on January 1, 2021. For more information, see the Virginia Department of Taxation website. (Reference Virginia Code 58.1-439.12:05)

Laws and Regulations

Alternative Fuel Provider License

Alternative fuel providers, bulk users, and retailers, or any person who fuels an alternative fuel vehicle from a private source that does not pay the alternative fuels tax must obtain an alternative fuel license from the Virginia Department of Motor Vehicles (DMV). For more information, see the DMV Fuels Tax Licensing website. (Reference Virginia Code 58.1-2244)

Alternative Fuel School Bus and Fueling Infrastructure Loans

The Virginia Board of Education may use funding from the Literary Fund to provide loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)

Alternative Fuel and Vehicle Tax

Alternative fuels used to operate on-road vehicles are taxed at a rate of $0.162 per gasoline gallon equivalent (GGE). Alternative fuels are taxed at the same rate as gasoline and gasohol (5.1% of the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline). Refer to the Virginia Department of Motor Vehicles (DMV) Fuels Tax Rates and Alternative Fuels Conversion website for fuel-specific GGE calculations.

All-electric vehicles (EVs) registered in Virginia are subject to a $64.00 annual license tax at time of registration. For more information, see the Virginia DMV Electric Vehicles website.

(Reference Virginia Code 58.1-2217 and 58.1-2249)

Biodiesel and Renewable Diesel Definitions

Biodiesel is defined as a fuel composed of mono-alkyl esters of long-chain fatty acids derived from vegetable oils or animal fats that is designated B100 and meets the requirements of ASTM D6751. Renewable diesel is a fuel produced from non-fossil renewable resources, including agricultural or silvicultural plants; animal fats; residue and waste generated from the production, processing, and marketing of agricultural products, silvicultural products; and other renewable resources; that meets applicable ASTM specifications. (Reference Virginia Code 58.1-439.12:02)

State Energy Plan

The Department of Mines, Minerals and Energy (DMME) is responsible for creating the Virginia Energy Plan (Plan) to assess the commonwealth's primary energy sources and recommends actions to meet state energy goals. The Plan includes policies to promote alternative fuel and efficient vehicle use, encourage efficient driving techniques, and reduce vehicle miles traveled. The DMME must submit the Plan to the governor, the State Corporation Commission, and the General Assembly by October 1 of each year following the election of a new governor. For more information, see the Virginia Energy Plan website.

(Reference Virginia Code 67-101 and 67-102)

Utility/Private Incentives

Clean Transportation Technology Investment Funding - Center for Innovative Technology (CIT)

CIT’s Commonwealth Energy Fund (CEF) provides early-stage investment funds for Virginia-based technology, life science, and clean technology companies. Eligible clean transportation technologies may include vehicles, components, batteries, and fuel cells, in addition to biofuels. For more information, see the CEF website.

More Laws and Incentives

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