Biodiesel Laws and Incentives in Alabama
The list below contains summaries of all Alabama laws and incentives related to biodiesel.
State Incentives
Biofuel Production Jobs Tax Credit
Companies that invest in the development of a biofuel production facility may be eligible for a tax credit of 3% of the previous year’s annual employee wages. Companies may claim this credit against the utility gross receipts and utility service use taxes for up to 10 years; the credit may be refundable during the incentive period or claimed as a credit against utility taxes paid with a carryforward for earned but unused amounts. Companies may also be eligible for a tax credit of 1.5% of qualified capital investment annually for up to 10 years. Companies may claim this credit against the income tax, estimated income taxes, financial institution excise tax, or the insurance premium tax. The credit may also be claimed as a credit against taxes paid with a carryforward for earned but unused amounts.
For the purposes of the credit, biofuel is defined as a motor vehicle fuel that is produced from grain, starch, oilseeds, vegetable, algae, animal materials, or other biomass. To be eligible for the tax credits, companies must execute a project agreement with the Governor.
(Reference Code of Alabama 2-2-90 and 40-18-370 through 40-18-383)
Biofuel Research and Development Funding
The Alabama Department of Economic and Community Affairs (ADECA) administers the Alabama Research and Development Enhancement Fund (ARDEF) Program to encourage new and continuing research and development efforts within the state for the purpose of increasing employment opportunities, and products and services available to the citizens of Alabama. The production of biofuel is eligible for ARDEF funding. For additional information, see the ADECA Energy Division and ARDEF Program websites.
(Reference Code of Alabama 2-2-90)
Point of Contact
Jennifer Lee
Energy Division Chief
Alabama Department of Economic and Community Affairs
Phone: (334) 353-3005
jennifer.lee@adeca.alabama.gov
Laws and Regulations
Fuel-Efficient Green Fleets Policy and Fleet Management Program Development
The Alabama Legislature established a Green Fleets Review Committee (Committee) and Green Fleets Policy (Policy) outlining a procurement procedure for state vehicles based on criteria that includes fuel economy and life cycle costing. State fleet managers must classify their vehicle inventory for compliance with the Policy and submit annual plans for procuring fuel-efficient vehicles. These plans must reflect a 4% annual increase in average fleet fuel economy for light-duty vehicles, a 3% annual increase in average fleet fuel economy for medium-duty vehicles, and a 2% annual increase in average fleet fuel economy for heavy-duty vehicles per fiscal year. Government entities must manage and operate their fleets in a manner that is energy efficient, minimizes emissions, and reduces petroleum dependency by using specified proven technology the Committee identifies.
(Reference Code of Alabama 41-17A-1 through 41-17A-6)
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.