Ethanol: Indiana Laws and Regulations

Alternative Fuel and Special Fuel Definitions

The definition of alternative fuel includes propane. Special fuel is defined as all combustible gases and liquids that are suitable for powering an internal combustion engine or motor or are used exclusively for heating, industrial, or farm purposes. Special fuels include biodiesel, blended biodiesel, and natural gas products, including liquefied and compressed natural gas. (Reference Indiana Code 6-6-2.5-1 and 6-6-2.5-22)

Biofuels Blend Use Requirement

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)

Certified Technology Park Designation

The Indiana Economic Development Corporation (IDEC) may designate an area as a certified technology park if certain criteria are met, including a commitment from at least one business engaged in a high technology activity that creates a significant number of jobs. The establishment of high technology activities and public facilities within a technology park serves a public purpose and benefits the public’s general welfare by encouraging investment, job creation and retention, and economic growth and diversity. High technology activities include advanced vehicles technology, which is any technology that involves electric vehicles, hybrid electric vehicles, or alternative fuel vehicles, or components used in the construction of these vehicles. For more information, see the IEDC Indiana Certified Technology Parks website. (Reference Indiana Code 36-7-32)

E85 Definition

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)

E85 Promotion and Education

The Indiana State Department of Agriculture must work with automobile manufacturers to improve awareness and labeling of E85 and must coordinate with the appropriate companies to include E85 fueling stations in updates of global positioning navigation software. (Reference Indiana Code 15-11-2-4)

Immunity for Misuse of E85

E85 sellers, suppliers, distributors, manufacturers, and refiners are immune from civil liability for personal injury or property damage resulting from a person fueling any vehicle with E85 that is not a flexible fuel vehicle. This includes any vehicle equipped to operate when fueled entirely with E85. This immunity does not apply if an E85 seller, supplier, distributor, manufacturer, or refiner does not display all E85 warning signs that federal or state laws require. (Reference Indiana Code 34-30-24)


Ethanol: Indiana Incentives

Alternative Fuel Vehicle (AFV) Inspection and Maintenance Exemption

Dedicated AFVs are exempt from inspection and maintenance requirements if they operate exclusively on natural gas, propane, ethanol, hydrogen, or methanol. (Reference 326 Indiana Administrative Code 13-1.1)

Diesel Vehicle Retrofit and Improvement Grants

The Indiana Department of Environmental Management (IDEM) administers the DieselWise Indiana grant programs to support projects that reduce diesel emissions. The Clean Diesel Across Indiana program provides grants ranging from $10,000 to $75,000 for projects throughout the state. Eligible applicants include private and public entities that operate equipment serving the public, including private bus fleets and sanitation fleets. Eligible projects include replacing or converting a diesel vehicle or vehicle component with one that operates on alternative fuel, as well as installing exhaust retrofit technologies, idle reduction technologies, aerodynamic technologies, and low rolling resistance tires. For more information see the IDEM DieselWise website.

Vehicle Research and Development Grants

The Indiana 21st Century Research and Technology Fund provides grants and loans to support economic development in high technology industry clusters. Incentives are available for qualified alternative fuel technologies and fuel-efficient vehicle development and production. For more information, see the Indiana Venture Development website. (Reference Indiana Code 5-28-16-2)

Flexible Fuel Vehicles: Providing a Renewable Fuel Choice

Today, almost 8 million vehicles on U.S. highways are flexible fuel vehicles (FFVs). These vehicles can operate on gasoline or blends of gasoline and ethanol up to E85 (85% ethanol, 15% gasoline). As a renewable fuel, ethanol offers significant advantages. It is manufactured predominantly in the United States, made from homegrown feedstocks, and is cleaner burning than gasoline. An FFV, as its name implies, has the flexibility of running on more than one type of fuel. FFVs can be fueled with unleaded gasoline, E85, or any combination of the two. Like conventional gasoline vehicles, FFVs have a single fuel tank, fuel system, and engine. And they are available in a wide range of models such as sedans, pickups, and minivans. Light-duty FFVs are designed to operate with at least 15% gasoline in the fuel, mainly to ensure they start in cold weather. FFVs are equipped with modified components designed specifically to compatible with ethanol’s chemical properties. In the illustration on the back, the main modifications for FFVs are described. These seamless operation and a long useful life across a wide range of ethanol blends. Clean Cities posts a list of alternative fuel vehicles, including FFVs, on its Alternative Fuels and Advanced Vehicles Data Center (AFDC) Web site at To find out about available models, go to the Vehicles section of the AFDC and use the Light-Duty Vehicle Search.


Ethanol: Reports & FAQs

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Tax credits for AF/Infrastructure SD


Alternative Fuel Excise Tax Credit:

Public Law 112-240, Section 412
Alternative Fuel Infrastructure Tax Credit:


Public Law 112-240, Section 402

Alternative Fuel Mixture Excise Tax Credit:


Public Law 112-240, Section 405
Expands the definition of second generation biofuel (previously referred to as cellulosic biofuel) to include biofuel from cultivated algae, cyanobacteria, or lemna, and extends two incentives related to these fuels through December 31, 2013: Second Generation Biofuel Plant Depreciation Deduction Allowance:


Public Law 112-240, Section 410
Second Generation Biofuel Producer Tax Credit:


Public Law 112-240, Section 404
Extends discretionary funding for the following U.S. Department of Agriculture programs through September 2013:
Advanced Biofuel Production Grants and Loan Guarantees:


Advanced Biofuel Production Payments:


Ethanol Infrastructure Grants and Loan Guarantees: