Ethanol Laws and Incentives in North Dakota
The list below contains summaries of all North Dakota laws and incentives related to ethanol.
State Incentives
Agriculturally-Derived Fuel Production Facility Loan Guarantees
The Bank of North Dakota offers loan guarantees of up to $400,000 per borrower for eligible entities constructing facilities using biomass for agriculturally-derived fuel production. The total value of loan guarantees under this program may not exceed $8 million at any one time. Additional restrictions apply. For more information, see the Bank of North Dakota’s Farm Real Estate Loan Guarantee Program website.
(Reference North Dakota Century Code 6-09.7-01and 6-09.7-09)
Biofuel Loan Program
The Biofuels Partnership in Assisting Community Expansion (PACE) Loan Program provides an interest buy down of up to 5% below the note rate to biodiesel, ethanol, or renewable diesel production facilities; livestock operations feeding by-products produced at a biodiesel, ethanol, or renewable diesel facility; and grain handling facilities which provide storage of grain used in biofuels production. Qualified biodiesel, ethanol, and renewable diesel production facilities located in North Dakota may receive up to $500,000 of interest buy down for the purchase, construction, or expansion of a production facility, or the purchase or installation of equipment at the facility.
Loan terms vary based on the project type, and recipients of Biofuels PACE loans are not eligible for regular PACE loans. For more information, including production facility eligibility requirements, see the Biofuels PACE Program website.
(Reference North Dakota Century Code 17-03)
Ethanol Production Incentive
The Ethanol Production Incentive provides qualified ethanol producers with quarterly payments based on production volume during times when ethanol prices are unusually low or corn prices are unusually high. The incentive amount is based on the average North Dakota wholesale ethanol price for the preceding quarter and the average North Dakota corn price for the preceding quarter. Qualified facilities include ethanol production facilities constructed after July 31, 2003. Ethanol production facilities in operation before July 1, 1995, are eligible to receive incentive payments if their production increases by 10 million gallons or by 50% of production capacity, whichever is less, during any 12-month period.
The total cumulative incentive available to all eligible producers in any single year is $1.6 million. A single eligible facility may not receive payments for longer than 10 years or more than $10 million in incentive payments over the life of the facility. For more information, see the North Dakota Department of Commerce Ethanol Production Incentive website.
(Reference North Dakota Century Code 17-02)
Point of Contact
Lori Nitsch
Grants and Contracts Officer
North Dakota Department of Commerce
Phone: (701) 328-2693
lnitsch@nd.gov
Hydrogen and Advanced Biofuel Incentives
The North Dakota Industrial Commission’s Renewable Energy Program provides matching grants and other forms of assistance to support research and development projects involving advanced and sugar-based biofuel, hydrogen, and other renewable technologies. Advanced biofuel is defined as fuel derived from renewable biomass and includes biofuel derived from cellulose, hemicellulose, or lignin; biofuel derived from sugar and starch other than ethanol derived from corn kernel starch; biofuel derived from waste material, including crop residue, other vegetative waste material, animal waste, food waste, and yard waste; diesel-equivalent fuel derived from renewable biomass, including vegetable oil and animal fat; biogas, including landfill gas and sewage waste treatment gas, produced through the conversion of organic matter from renewable biomass; butanol or other alcohols produced through the conversion of organic matter from renewable biomass; and other fuel derived from cellulosic biomass. For more information, see the Renewable Energy Program website.
(Reference North Dakota Century Code 54-63-03)
Laws and Regulations
Alternative Fuel Tax Rates
An excise tax of $0.23 per gallon is imposed on alternative fuel sales and deliveries, including propane, compressed natural gas (CNG), and liquefied natural gas (LNG). One gallon of special fuel is equal to 120 cubic feet of CNG or 1.7 gallons of LNG. Retailers must obtain a license from the Office of the State Tax Commissioner to sell special fuels. Exceptions may apply.
(Reference North Dakota Century Code 57-43.2-02 through 57-43.2-05)
Biofuel Labeling Requirements
Ethanol and biodiesel fuel retailers must label retail dispensing units with the price, name, and main components of the fuel or fuel blend being sold. The labeling must follow established labeling specifications for petroleum-based fuels. Suppliers of ethanol and biodiesel must provide fuel retailers with an invoice stating the fuel blend. Alcohol fuel blends containing at least 1% of alcohol by volume must also be clearly labeled at the dispenser and on any price advertisements. Biodiesel and biodiesel blends must be identified by the capital letter “B” followed by the numerical value representing the percentage of biodiesel fuel. Additional specifications may apply.
(Reference North Dakota Century Code 23.1-13 and North Dakota Administrative Code 33.1-34-01)
Renewable Fuels Promotion
Recognizing that biofuels such as ethanol and biodiesel are an important part of the state’s energy economy, the North Dakota Legislature adopted a low-emission technology initiative, prioritizing the use of agricultural, forestry, and other natural resources as sources of fuel and created the Energy Policy Commission (Commission) to identify and make recommendations on low-emission technologies. The Commission may also provide grants, loans, or other forms of financial assistance for research, demonstration, development, or commercialization projects related to low-emission technologies. Financial awards given by the Commission must be funded by the clean sustainable energy fund. Low-emission technology includes biofuels, hydrogen, natural gas, and energy efficiency initiatives. The Commission must provide a report to the legislature biennially. For more information, see North Dakota Department of Commerce EmPower North Dakota website.
(Reference North Dakota Century Code 17-01-01)
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.