Ethanol Laws and Incentives in Illinois
The list below contains summaries of all Illinois laws and incentives related to ethanol.
Laws and Regulations
Advanced Vehicle Acquisition and Biodiesel Fuel Use Requirement
All gasoline-powered vehicles purchased with state funds must be flex fuel vehicles (FFVs) or fuel-efficient hybrid electric vehicles (HEVs). FFVs are defined as automobiles or light trucks that operate on either gasoline or 85% ethanol (E85) fuel. Fuel-efficient HEVs are defined as automobiles or light trucks that use a gasoline or diesel engine and an electric motor to provide power and that gain at least a 20% increase in combined U.S. Environmental Protection Agency city-highway fuel economy over a comparable conventionally powered model. Any vehicle purchased with state funds that is fueled with diesel fuel must be certified by the manufacturer to run on 5% biodiesel (B5) fuel.
15% of all vehicles purchased with state funds must be fueled by electricity, natural gas, or liquefied petroleum gas, except for Department of Corrections, Department of State Police patrol, and Secretary of State vehicles. Additional exemptions may apply.
The Chief Procurement Officer may determine that certain vehicle procurements are exempt from these requirements based on intended use or other reasonable considerations such as health and safety of Illinois citizens.
(Reference 30 Illinois Compiled Statutes 500/25-75)
Alternative Fuel Labeling Requirement
Vehicles powered by liquefied petroleum gas or compressed natural gas (CNG) must visibly display identifying decals, as established by the National Fire Protection Association’s standards for the Storage and Handling of Liquefied Petroleum Gases and for CNG Vehicular Fuel Systems.
(Reference 625 Illinois Compiled Statutes 5/12-704.3)
Biofuels Education and Promotion
State agencies, including state-supported universities and colleges, must provide links from their websites to websites containing information on ethanol and biodiesel fuels. The links must connect to websites maintained and operated by state agencies and may also include links to private websites.
(Reference 505 Illinois Compiled Statutes 150/5)
Biofuels Preference for State Vehicle Procurement
When awarding contracts that require vehicle procurement, state agencies may give preference to an otherwise qualified bidder who will fulfill the contract through the use of vehicles powered by ethanol produced from Illinois corn or biodiesel produced from Illinois soybeans.
(Reference 30 Illinois Compiled Statutes 500/45-60)
Ethanol Definition and Specification
Majority blended ethanol fuel is defined as a blend of gasoline and denatured ethanol that contains between 51% and 83% ethanol by volume. Mid-range ethanol blend is defined as a blend of gasoline and denatured ethanol that contains between 20% and 50% denatured ethanol. Ethanol blended fuels must comply with ASTM Standard D5798-11.
(Reference 35 Illinois Compiled Statutes 105/3-44 and 105/3-44.3)
Ethanol and Hydrogen Production Facility Permits
The Illinois Environmental Protection Agency (IEPA) may issue air pollution control permits through the Bureau of Air for thermochemical conversion technology facilities that are constructed and operated to demonstrate the process of applying heat to woody biomass to produce ethanol or hydrogen for use as transportation fuel. Permit applicants must perform emissions testing during the required permit period and submit the results of that testing to the IEPA within 60 days after completion.
(Reference 415 Illinois Compiled Statutes 5/39.9)
State Incentives
Biofuels Tax Exemption
Through December 31, 2028, a sales and use tax of 6.25% applies to 90% of the proceeds from the sale of fuel blends containing 15% ethanol (E15) and to 80% of the proceeds from the sale of fuel blends containing between 20% and 50% ethanol. This tax does not apply to the proceeds from the sale of fuel blends containing between 51% and 83% ethanol (E85). If at any time the sales and use tax is 1.25%, the tax on ethanol fuel blends below 51% ethanol will apply to 100% of the proceeds of sales made after December 31, 2028. Taxes will apply to 100% of the proceeds from the sale of all ethanol fuel blends made after December 31, 2028.
Through November 30, 2030, sales and use taxes do not apply to diesel fuel blends containing at least 10% biodiesel (B10) or 10% renewable diesel from December 1 of each calendar year through March 31 of the following calendar year. From April 1, 2024, through November 30, 2030, diesel fuel blends are not subject to sales and use taxes if they adhere to the following blend amounts:
| Timeframe | Biofuel Blend Requirement |
|---|---|
| April 1, 2024, through November 30, 2024 | At least 13% biodiesel or renewable diesel |
| April 1, 2025, through November 30, 2025 | At least 16% biodiesel or renewable diesel |
| April 1, 2026, through November 30, 2030 | At least 19% biodiesel or renewable diesel |
(Reference 35 Illinois Compiled Statues 120/2-10, 105/3-5.1, 105/3-10, and 105/3-44)
Diesel Emission Reduction Grants
The Illinois Environmental Protection Agency (IEPA) administers the Driving a Cleaner Illinois program for diesel emission reduction projects. Projects are funded by Illinois’ portion of the Volkswagen Environmental Mitigation Trust, the U.S. Environmental Protection Agency’s Diesel Emission Reduction Act (DERA) Program, and the U.S. Department of Transportation Federal Highway Administration’s Congestion Mitigation and Air Quality Improvement (CMAQ) Program. For more information, including funding availability, see the IEPA Driving a Cleaner Illinois website.
School Bus Retrofit Reimbursement
The Illinois State Board of Education will reimburse any qualifying school district for the cost of converting gasoline buses to more fuel-efficient engines or to engines using alternative fuels. Restrictions may apply.
(Reference 105 Illinois Compiled Statutes 5/29-5)
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.