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Biofuels are renewable, domestically produced fuels that can be blended with gasoline can run automobile engines. Biofuels are made either from plants or animal products, and the two major types of biofuels used for transportation are biodiesel and ethanol. Both biodiesel and ethanol reduced the amount of gasoline needed per mile driven.
Biodiesel can be used in any standard diesel engine and does not require engine modification. Biodiesel can be used by itself or blended with gasoline in varying concentrations. B100 is pure biodiesel, but B20 (20% biodiesel, 80% petroleum diesel) and B5 (5% biodiesel, 95% petroleum diesel) are common blends. Biodiesel and biodiesel blends are used by diesel engines and burn more cleanly than petrodiesel.
Ethanol used in the US is made primarily from the starch in corn grain. Ethanol is regularly blended with gasoline at low levels, but some gas stations offer E85 (85% ethanol, 15% gasoline). However, only flex fuel vehicles (FFVs) can use E85. FFVs can be fueled with unleaded gasoline, E85, or a combination of the two. Most vehicles produced after September, 2006 should be flex fuel and can handle up to 85% ethanol content. However, check whether your vehicle is flex fuel at the U.S. Department of Energy's Alternative Fuels Data Center. The easiest way to check if your vehicle takes E85 is to look for a badge on your vehicles that says "Flex Fuel' or check if your gas cap is yellow and labeled "E85/Gasoline."
For more information on biodiesel and ethanol, view our E85/B20 FAQs page.
Federal Tax Credits for Fueling Equipment: Businesses and investors who purchase biodiesel or E85 fueling equipment may receive a federal tax credit of 30% of the equipment and installation cost, up to $30,000. Learn more about the Alternative Fuel Vehicle Refueling Property credit here. This incentive originally expired on December 31, 2013, but was retroactively extended through December 31, 2014 by Public Law 113-295. The incentive will remain posted until the federal tax filing deadline.
Federal Alternative Fuel Excise Tax Credit: A tax incentive is available for alternative fuel that is sold for use as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: compresses natural gas, liquefied natural gas, liquefied hydrogen, biodiesel, and propane. The credit expires December 31, 2016. Learn more about this tax credit here.