Oregon Requires Biofuel Blends in Both Gasoline and Diesel Fuels

July 11, 2007

Oregon Governor Ted Kulongoski signed legislation on July 3rd that will require all gasoline sold in the state to be blended with 10% ethanol (a blend known as E10) and all diesel fuel sold in the state to be blended with 2% biodiesel (a blend known as B2). The requirement for gasoline will take effect when Oregon's ethanol production reaches 40 million gallons per year, and the diesel requirement kicks in when the Pacific Northwest's production of biodiesel reaches 5 million gallons per year. When biodiesel production reaches 15 million gallons per year, the blending requirement will increase to 5% (a blend known as B5). The bill creates tax incentives for producers of biofuel feedstocks and for consumers who buy E85 (a blend of 85% ethanol and 15% gasoline) or pure biodiesel. The bill also includes a tax incentive for consumers that buy home heating pellets made exclusively from biomass sources. See the text of the bill, HB 2210.

The governor also noted that the legislature approved a bill that increases the business energy tax credit on renewable energy systems from 35% to 50% and increases the credit cap from $10 million to $20 million. A separate bill expands the residential energy tax credit to encourage the greater adoption of renewable energy technologies. See the governor's press release.