U.S. Department of Energy - Energy Efficiency and Renewable Energy

Vehicle Technologies Program – EPAct Transportation Regulatory Activities

State and Alternative Fuel Provider Standard Compliance: Biodiesel Credits

Under Standard Compliance, covered fleets may purchase biodiesel to earn credits to supplement efforts to satisfy the alternative fuel vehicle (AFV) acquisition requirements. One credit is allocated for the use of every 450 gallons of pure biodiesel (B100).

Fleets may also earn biodiesel fuel use credits if they purchase biodiesel blends of 20% biodiesel (B20). In biodiesel blends, however, fleets may only count the biodiesel portion toward the allocation of a biodiesel fuel use credit.

To receive biodiesel fuel use credits, all of the following conditions must be met.

• The fuel purchased for use must be in blends of at least 20% biodiesel. If higher percentage blends (including B100) are purchased for blending on site, the resulting blend must be at least 20% biodiesel when used in vehicles.
• The fuel must have been purchased for use in vehicles with a gross vehicle weight rating of more than 8,500 lbs. Biodiesel purchased for non-qualifying uses (such as for use in generator sets) may not be counted.
• The fuel must not have been used in vehicles for which an AFV-acquisition credit has already been claimed.
• The fuel must have been purchased after November 13, 1998.
• Federal or state law did not require biodiesel fuel use when the fuel was purchased. If a law required biodiesel fuel use when the fuel was purchased, the amount counted is only the amount in excess of any federal or state requirement. For example, if a state law sets forth a B2 use requirement, the fleet would receive credit for only 18% of the biodiesel blend purchased for use as B20 (20% minus 2%), rather than the full 20%.
• Biodiesel fuel use credits must be used in the model year in which they are generated and may not be banked for use or sale in future model years. These credits are not eligible for trading or sale.
• The total amount of biodiesel purchases claimed must be the net amount of biodiesel purchased for use by the reporting fleet. Any amount of biodiesel sold or otherwise provided to any other user must not be included in the amount of biodiesel purchases reported. Fleets must maintain and retain purchase records verifying relevant information for three years from the December 31 that follows the close of the model year during which the biodiesel was purchased for use.

Calculating Credits

The following rules must be followed to calculate credits for using biodiesel fuel under Standard Compliance.

• Biodiesel fuel use credits may account for no more than 50% of a fleet's annual AFV-acquisition requirements. The exception is for biodiesel fuel providers who can meet up to 100% of their requirements through the biodiesel fuel use credits.
• In determining if a fleet is in compliance with the AFV-acquisition requirements, biodiesel fuel use credits are counted first, up to their allowable limit, and then AFV-acquisition credits are counted. If this results in excess credits, the excess AFV-acquisition credits may be banked for use or trade in future models years. Therefore, even though biodiesel credits themselves may not be banked or traded, when used in conjunction with AFV acquisitions, a fleet may end up with bankable or tradable AFV-acquisition credits.
• No rounding-up of biodiesel fuel use credits is allowed; each allocation of a biodiesel fuel use credit requires that the full 450 gallons of biodiesel be purchased for use.