Alternative Fuels -- State Regulations for Indiana

This page contains selected data from the Alternative Fuels Data Center (AFDC) at the U. S. Department of Energy. Additional details and the latest updates may be found at the AFDC summary page for Indiana.

Vehicle Acquisition

State agency vehicles

Each state entity must purchase or lease a clean energy vehicle, unless the Indiana Department of Administration determines that the purchase or lease of the vehicle is inappropriate for its intended use, or the purchase or lease would cost 10% more than a comparable non-clean energy vehicle. Additional exemptions apply. A clean energy vehicle is defined as a vehicle that operates on one or more of the following energy sources: a rechargeable energy storage system; hydrogen; compressed natural gas; or liquefied natural gas. (Reference Indiana Code 5-22-5-8.5)

Fuel Use

State agency vehicles

Whenever possible, governmental entities and state educational institutions must fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel (B2), gasoline vehicles with mid-level ethanol blends between 20% and 73%, and flexible fuel vehicles with E85. This requirement does not apply if such blends are prohibited under federal regulations or have not been approved by the vehicle manufacturer. Additional exemptions apply. (Reference Indiana Code 5-22-5-8 and 21-31-9-3)

General

Decal Requirement (vehicles)

An individual may place alternative fuel into the fuel tank of a motor vehicle only if the vehicle has a valid alternative fuel decal affixed to the front windshield or the individual has submitted an application for a decal within the last 30 days. All heavy-duty AFVs and light-duty AFVs that public or private utilities own require vehicle decals. The cost of the decal varies according to vehicle type and the gross vehicle weight rating. The annual fee may be prorated if the vehicle is newly purchased, registered in Indiana, or converted to operate using an alternative fuel. (Reference Indiana Code 6-6-2.1-203 through 6-6-2.1-206)

Definition (biodiesel)

Biodiesel is defined as a renewable, biodegradable fuel derived from agricultural plant oils or animal fats that meet ASTM specification D6751. Blended biodiesel is a blend of biodiesel with petroleum diesel fuel so that the volume percentage of biodiesel in the blend is at least 2% (B2). (Reference Indiana Code 6-3.1-27-1, 6-3.1-27-2, and 6-6-2.5-1.5)

Definition (E85)

E85 is a fuel blend nominally consisting of 85% ethanol and 15% gasoline by volume that meets ASTM specification D5798. (Reference Indiana Code 6-6-1.1-103)

Equipment Requirement (safety, gas-powered vehicles)

An individual may not operate an NGV on a highway outside the corporate limits of a municipality from a half hour after sunset to a half hour before sunrise unless the vehicle carries at least three red electric lanterns or three portable red emergency reflectors. NGVs are prohibited from carrying a flare, fuse, or signal produced by flame. (Reference Indiana Code 9-19-5-6)

Procurement Preference (biofuels)

A governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to a 10% price preference for the purchase of fuels containing at least 20% biodiesel (B20) by volume or fuels that are primarily ester-derived (other than alcohol) made from biological materials, such as oilseeds and animal fats, for use in operating compression and ignition engines. (Reference Indiana Code 5-22-15-1, 5-22-15-7, and 5-22-15-19)

Rate Rebate (gas-powered vehicles)

Citizens Gas & Coke Utility (Citizens) offers rebates for qualified compressed natural gas (CNG) vehicle conversions or for the purchase of an original equipment manufacturer dedicated or bi-fuel CNG vehicle. Used NGVs may also qualify. Rebates are available to fleet operators on a case-by-case basis. Citizens will examine each project on the merits of providing the rebate based on hours of operation or miles driven, per vehicle, per year.

Tax Credit (biodiesel production)

A biodiesel producer located in Indiana may receive a credit of $1.00 per gallon of biodiesel produced. The Indiana Economic Development Corporation (IEDC) must review and approve applications for this incentive. The IEDC may grant a single taxpayer no more than $3 million total for all taxable years; this maximum incentive may be increased to $5 million with prior approval from IEDC. As of April 2012, no funds have been appropriated for this incentive. (Reference Indiana Code 6-3.1-27-8)

Tax Credit (biodiesel blending)

A biodiesel blender located in Indiana may receive a credit of $0.02 per gallon of blended biodiesel produced at a facility located in Indiana. The Indiana Economic Development Corporation must review and approve applications for this incentive. The IEDC may grant a single taxpayer no more than $3 million total for all taxable years. As of April 2012, no funds have been appropriated for this incentive. (Reference Indiana Code 6-3.1-27-9)

Tax Exemption (biodiesel)

Biodiesel blends of at least 20% (B20) that are used for personal, noncommercial use by the individual that produced the biodiesel portion of the fuel are exempt from the $0.16 per gallon license tax. The maximum number of gallons of fuel for which the exemption may be claimed is based on the percentage volume of biodiesel in each gallon used. (Reference Indiana Code 6-6-2.5-1.5, 6-6-2.5-28, and 6-6-2.5-30.5)

Weight Limit Exemption (idle reduction)

A heavy-duty vehicle equipped with an auxiliary power unit may exceed the state's gross vehicle weight limit by up to 400 pounds to compensate for the additional weight of the idle reduction technology. A heavy-duty vehicle is defined as having a gross vehicle weight rating of more than 8,500 pounds. (Reference Indiana Code 9-20-4-1)