Biodiesel Production Incentive Program
This program is CLOSED as of May 1, 2011.
DEP announces an opportunity to apply for biodiesel production incentive funding under the Alternative Fuels Incentive Program to support the production and use of biomass-based diesel in the commonwealth. Eligible applicants include individuals who produce and sell qualified biomass-based diesel in Pennsylvania in quantities of 25,000 gallons or more for transportation or home heating purposes. Under the production incentive program, $0.75 per gallon will be awarded to eligible applicants, with no single producer having one or more facilities to receive more than $1.9 million annually. Up to $5.3 million annually will be available to eligible applicants under the program through fiscal year 2010-2011.
Click the links below to view, print, or download the Biodiesel Production Incentive guidelines and application forms:
Frequently Asked Questions
Q: How detailed do proof of sales documents need to be? Does DEP want individual invoices? Will spreadsheets suffice?
A: DEP requests to review individual invoices and all necessary backup details. Summary spreadsheets can also be submitted if it provides further clarity regarding proof of sales in addition to invoices.
Q: With regards to “number of gallons sold” (Page 2 of the reimbursement form), how do producers account for fuel that is sent to third-party blenders for preparing fuels both for transportation and residential heating?
A: Producers should do the best they can to trace and breakout fuel that is sold for these two uses.
Q: How do producers identify batches (of fuel) that are produced on a continuous basis?
A: Producers should provide a summary of daily production throughput along with proof of sales documentation.
Q: How does DEP interpret the requirement for fuel produced and sold (to suppliers) in Pennsylvania but transferred out of state for distribution?
A: We will be requiring all necessary proof of sales and all customer information, such that we can determine that the (sales) taxing entity is located in Pennsylvania . We have been in contact with and will be working the PA Department of Revenue to check that all sales result in the paying of Pennsylvania taxes as proof that the fuel is being sold in this commonwealth.
Q: What type of proof for gallons of fuel produced that is used internally (by producers at their own facilities, and therefore, “not sold”) would DEP require and would entity have to pay sales tax?
A: The statute requires that the fuel be sold in the commonwealth. DEP will have to investigate, and provide an answer that would adequately address any audit scrutiny.
Q: With regards to “additional requirements” (on Page 2 of the reimbursement form) can DEP give examples of acceptable documentation for the three glycerin by-products scenarios?
A: For glycerin disposed as a hazardous material – manifests, receipts, other documentation, etc. For glycerin sold to a processor for reclamation – sales receipts, other documentation, etc. For glycerin converted to non-hazardous material – analytical documentation, internal documents, etc.
Q: What happens when the 10-cent incentive becomes exhausted during the year? Can a producer bounce back and forth between incentive and grant?
A: Existing grants with the 5-cent incentive will continue at that reimbursement rate until the grant period terminates. The 10-cent incentive will be applied to newly awarded incentive grants under the competitive (AFIG) solicitation going forward. The 75-cent incentive is part of the non-competitive program. If a producer has an active grant, and they do not produce 25,000 gallons in a month then they can apply for reimbursement for 5 cents for existing grants or 10 cents per gallon for new grants. A producer cannot apply for both the 5 or 10 cents and 75 cents in the same month.
Q: What is the turn around time for reimbursements?
A: Once the DEP Grants Center processes the request for reimbursement forms, they are forwarded to the Comptroller’s Office and eventually Treasury for payment. This is a 6-8 week process. Nov. 14, 2008 is the deadline for DEP to receive reimbursement requests for the past three months (for the period July 1 – Sept. 30). Thereafter, DEP will accept requests for reimbursement a month-to-month basis. For example, reimbursement requests for the month of October 2008 will be received between Nov. 1 and Nov. 30, 2008.
Q: Are there monthly or annual limitations (as far as reimbursement)?
A: Reimbursement will be made on a first-come first-serve basis. No producer can receive more than $1.9 million in incentives for a fiscal year; this is an annual limitation.
Q: Does DEP want one form or three forms for the first reimbursement request submittal (which covers the period July 1 – Sept. 30, 2008)?
A: We prefer one form for each month, but will accept one form covering all three months just for the first submittal due Nov. 14, 2008, as long as that request is for a minimum of 75,000 gallons. Producers are still held accountable for producing at least 25,000 gallons a month for months in which they are seeking reimbursement. Thereafter, we will accept one form per month.
Q: Will DEP post a rundown of the total reimbursed and balance remaining?
A: As per public reporting requirements, DEP will post running totals on the (AFIG) website. Note that totals posted will be 30 days in arrears.
