Search Federal and State Laws and Incentives

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)

Biodiesel and Renewable Diesel Sales Equipment Tax Credit

Qualified retailers may be eligible for a corporate income tax credit of 10% of the direct costs incurred to adapt or add equipment to a facility so that it may sell diesel fuel containing at least 2% biodiesel or renewable diesel. A retailer may only claim the credit for up to five years and is limited to $50,000 in cumulative credits for all taxable years. The biodiesel or renewable diesel must meet applicable ASTM standards. (Reference North Dakota Century Code 57-38-01.23)

Biodiesel and Renewable Diesel Blender Tax Credit

A licensed fuel supplier who blends biodiesel or renewable diesel with diesel fuel may claim an income tax credit of $0.05 per gallon for fuel containing at least 5% biodiesel or renewable diesel. The tax credit may not exceed the taxpayer’s liability for the taxable year and each year’s unused credit amount may be carried forward for up to five taxable years. The biodiesel or renewable diesel must meet applicable ASTM standards. (Reference North Dakota Century Code 57-38-01.22)

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.

(Reference North Dakota Century Code 17-03)

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)

Biodiesel and Renewable Production and Blending Equipment Tax Credit

Qualified producers or blenders may be eligible for a corporate income tax credit of 10% of the direct costs incurred to add equipment to retrofit an existing facility or construct a new facility in the state for the purpose of producing or blending diesel fuel containing at least 2% biodiesel or renewable diesel. A taxpayer may only claim the credit for up to five years and is limited to $250,000 in cumulative credits for all taxable years. The biodiesel or renewable diesel must meet applicable ASTM standards. (Reference North Dakota Century Code 57-38-30.6)

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)

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 33.1-34-01)

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. 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)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled vehicle that can reach speeds of at least 20 miles per hour (mph) but not more than 25 mph. Low-speed vehicles may not operate on roads with posted speed limits greater than 35 mph, except to cross such roads. Low-speed vehicles must be registered with the state; vehicles owned and used by the federal government, the state, or another state are exempt from registration fees. (Reference North Dakota Century Code 39-29.1)

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 6-09.7-01 and 6-09.7-09)

Biodiesel and Renewable Diesel Definitions

Biodiesel is defined as a fuel that is comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oil or animal fats and that meets ASTM D6751. Renewable diesel is defined as 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. Renewable diesel must meet applicable ASTM specifications. (Reference North Dakota Century Code 57-43.2-01)

Experimental Vehicle Definition and Requirements

A vehicle weighing 6,000 pounds or less that is primarily powered by a source other than a combustion engine may be considered an experimental vehicle. A driver may not operate an experimental vehicle unless it is registered as such with the North Dakota Department of Transportation. An experimental vehicle must be equipped with certain safety features and may not operate on a state highway unless it is accompanied by a chase vehicle following at a safe driving distance. Experimental vehicle owners must pay an annual registration fee of $50 unless owned by a government entity or political subdivision. Additional requirements and restrictions apply. (Reference North Dakota Century Code 39-10.3)

Autonomous Vehicle (AV) Study

The North Dakota Department of Transportation (NDDOT) will work with the AV technology industry to study the use of vehicles equipped with automated driving systems on state highways and the data the vehicles store or gather. The study will include a review of current laws dealing with licensing, registration, insurance, data ownership, and inspection and how they should apply to autonomous vehicles. As part of this study, NDDOT is conducting an AV pilot program to convert trucks into self-driving vehicles to improve work zone safety through impact protection technology. The pilot vehicle will be deployed in the Fargo area. This program is funded by the Federal Highway Administration’s Accelerated Innovation Deployment program. NDDOT reported findings in the NDDOT 2019-2021 Biennial Report. For more information, see the NDDOT website. (Reference House Bill 1202, 2017)

Electric Vehicle (EV) Fee

EV owners must pay an annual fee in addition to other registration fees. The fee is $120 for all-electric vehicles, $50 for plug-in hybrid electric vehicles, and $20 for electric motorcycles. Fees contribute to the Highway Tax Distribution Fund. (Reference North Dakota Century Code 39-04)

Electric Vehicle (EV) Charging Signage and Parking Space Regulation

A parking space designated for EVs must be indicated by signage approved by the North Dakota Department of Transportation that indicates that it is only for EV charging. The signage must be consistent with the U.S. Department of Transportation Federal Highway Administration’s Manual on Uniform Traffic Control Devices.

(Reference North Dakota Century Code 39-13-06 and 39-10-50.1)

Autonomous Vehicle (AV) Operation Support

North Dakota state agencies and political subdivisions must facilitate the proper operation of AVs. An AV is defined as a vehicle equipped with an automated driving system. AV operation must follow all applicable federal and state traffic and motor vehicle safety, insurance, accident reporting, titling, and registration laws and regulations. Other conditions may apply. (Reference North Dakota Century Code 39-01-01.2)

Autonomous Vehicle (AV) Network Companies

An on-demand AV network is defined as a transportation network company that provides prearranged transportation services of an AV for compensation using a software application or platform to transport persons or goods. On-demand AV networks may connect passengers to AVs without human drivers and may provide for-hire transportation, public transportation, and ride sharing. (Reference North Dakota Century Code 8-12-01 and 8-12-02)

Idle Reduction Weight Exemption

Any motor vehicle equipped with qualified idle reduction technology may exceed the state gross, axle, tandem, or bridge weight limits by up to 550 pounds to account for the weight of the technology. The additional weight may not exceed the actual weight of the idle reduction unit. To qualify for the exemption, the vehicle operator must also be able to prove the weight of the idle reduction technology and demonstrate that the technology is fully functional. For more information, see the North Dakota Highway Patrol Legal Vehicle Size and Weight Guide. (Reference North Dakota Century Code 39-12-01)

Public Utility Definition

A corporation or individual that resells electricity supplied by a public utility for use in electric vehicle (EV) charging stations is not subject to regulation as a public utility. (Reference North Dakota Century Code 49-03-01.5)

Electric Vehicle (EV) Infrastructure Support

North Dakota utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.

Low-Emission Technology Grants

The North Dakota Industrial Commission (NDIC) administers the Clean Sustainable Energy Authority (CSEA) to provides grants to enhance the production of low-emission technology projects. Eligible projects related to biofuel, hydrogen, natural gas, and energy efficiency. CSEA may award up to $25 million between July 1, 2021, and June 30, 2023. Eligible applicants include corporations, cooperatives, associations, and others. For more information, including application materials and additional eligibility requirements, see the NDIC CSEA website and the CSEA Program Guidelines. (Reference House Bill 1452, 2021, and North Dakota Century Code 17-01 and 17-07)

Medium- and Heavy-Duty Diesel Vehicle Repower and Replacement Grants

The North Dakota Department of Environmental Quality (NDDEQ) offers grants for the replacement or repower of non-road and medium- and heavy-duty vehicles with new diesel or alternative fuel vehicles. Grants may cover up to 38% of non-government project costs and up to 50% of government project costs. Eligible alternative fuels include all-electric, compressed natural gas, propane, and hybrid electric vehicles. The program is funded by North Dakota’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including eligible projects and program application, see the NDDEQ Volkswagen Settlement website.

North Dakota's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the North Dakota Department of Transportation (NDDOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office) beginning August 1, 2022, describing how the state intends to distribute NEVI funds. The submitted plan must be established according to NEVI guidance.

For more information about North Dakota’s NEVI planning process, see the NDDOT North Dakota Statewide Electric Vehicle Infrastructure Plan website. To review North Dakota’s NEVI plan, see the Joint Office State Plans for EV Charging website.