Purchasing Biodiesel for Credit Under Standard Compliance

Through Standard Compliance, state and alternative fuel provider covered fleets may meet part of their Energy Policy Act (EPAct) requirements each year by purchasing biodiesel in blends of 20% biodiesel (B20) or higher for use in medium- or heavy-duty vehicles.

Credits for Biodiesel

By purchasing for use biodiesel in blends of 20% biodiesel (B20) or higher, covered fleets can earn one credit for each 450 gallons of pure biodiesel (B100) they purchase for use each year and can use these credits to achieve up to 50% of their alternative fuel vehicle (AFV)–acquisition requirement. Biodiesel fuel providers may achieve up to 100% of their requirement. Only the biodiesel portion of a biodiesel blend counts toward biodiesel credit. Petroleum in biodiesel blends does not count for credit.

For fleets to receive credit for biodiesel, the biodiesel must be:

  • Purchased for use by the reporting fleet
  • Used in vehicles with a gross vehicle weight rating of more than 8,500 lbs
  • Blended as 20% biodiesel or higher
  • Used in vehicles not counted for AFV acquisitions
  • Purchased after Nov. 13, 1998
  • Used beyond state or federal requirements [For example, if a state has a 5% biodiesel (B5) requirement for diesel sold in the state, the fleet can receive credit for only the remaining portion (15%) of the biodiesel in B20.]

When fleets receive biodiesel credits, they must:

  • Use the credits in the same model year (Biodiesel credits may not be banked.)
  • Keep biodiesel purchase records for 3 years after the end of the reporting period (December 31) for each model year

Fleets may not bank or trade biodiesel credits. AFV credits, however, may be banked or traded, so fleets should apply biodiesel credits toward their AFV-acquisition requirement before applying AFV acquisitions. When pairing biodiesel credits with AFV acquisitions, fleets may end up with credits to bank or trade.

Calculating Biodiesel Credits

Example Biodiesel Credit Calculation

If a fleet purchases 2,250 gallons of B20 (20% biodiesel) to use in medium- or heavy-duty vehicles, the fleet receives credit for 450 gallons of B100, which equals one credit.

2,250 gallons B20
× 0.2

450 gallons B100

The number of gallons of biodiesel blend purchased for use by a fleet is multiplied by the blend level as a percentage to determine the gallons of pure biodiesel (B100) purchased.

Follow these rules to calculate credits for biodiesel based on the amount of B100 calculated:

  • Count one biodiesel credit for each 450 gallons of pure biodiesel.
  • Count only whole biodiesel credits. Rounding up is not allowed.
  • Count biodiesel credits for up to 50% of a fleet's requirements (except for biodiesel fuel providers, who can count biodiesel credits for up to 100% of their requirements).