Maryland now has a law requiring that at least 50 percent of Maryland state vehicles must use a minimum biodiesel blend of
B5 beginning in fiscal year 2008. (Reference Senate Bill 54, 2006 and Maryland Statutes, State Finance and Procurement
Code 14-407).
Under the Renewable Fuels Promotion Act of 2005, ethanol and biodiesel producers may apply to the Renewable Fuels
Incentive Board for ethanol and biodiesel production credits. To be eligible for the credits, the producer must first apply to
the Board in order to receive certification as a producer. Biodiesel production credits are as follows: a) $0.20 per gallon of
biodiesel produced from soybean oil (the soybean oil must be produced in a facility or through expanded capacity of a
facility that began operating after December 31, 2004), and b) $0.05 per gallon for biodiesel produced from other
feedstocks (including soybean oil produced in a facility that began operating on or before December 31, 2004. The Board
may not certify biodiesel production credits for more than a total of five million gallons per calendar year, of which at least
two million gallons must be from soybean oil produced in a facility as described in section a) above.
Among other duties, the Incentives for Agriculture Task Force is responsible for reviewing and evaluating the overall State
tax structure as it impacts agriculture and the feasibility of modifications or alternatives to the current structure that
would enhance the profitability of farming. This includes recommendations regarding the creation of tax credits or
exemptions applicable to the production of ethanol, biodiesel, or other bio-energy alternatives. (Reference House Bill 2,
2006 and Maryland Statutes, State Finance and Procurement Code 5-408)
Section 1344 of the Energy Policy Act of 2005 includes tax credits for biodiesel producers
through 2008. The credits are $1.00 per gallon of agri-biodiesel, and $.50 per gallon of wastegrease
biodiesel. If the fuel is used in a mixture, the credit amounts to $.01 per percentage
point of agri-biodiesel used or $.0050 per percentage point of waste-grease biodiesel. For
more information, visit www.irs.gov/publications/p378/ar01.html.
Section 1345 of the Energy Policy Act of 2005 allows a tax credit of $.10 per gallon to small agri-biodiesel producers for
up to 15 million gallons. To be eligible, a producer must make less than 60 million gallons of biodiesel per year.
