A renewable, domestically produced, clean-burning alternative to petroleum diesel — made right here in Indiana from the soybeans grown by Hoosier farmers. Indiana produces over 100 million gallons of biodiesel annually, ranking among the nation's top producing states.
Biodiesel is a renewable, biodegradable fuel manufactured domestically from vegetable oils, animal fats, or recycled restaurant grease. It is a cleaner-burning, drop-in replacement for petroleum diesel — and Indiana’s soybean farmers are at the heart of its production.
In its pure, unblended form, biodiesel is called B100 or “neat biodiesel.” Like petroleum diesel, biodiesel fuels compression-ignition (diesel) engines. It can be used on its own or blended with conventional petroleum diesel in varying concentrations — making it one of the most flexible alternative fuels available to Indiana fleets and consumers today.
Biodiesel is produced through a process called transesterification, in which oils or fats are chemically reacted with an alcohol (typically methanol) in the presence of a catalyst. The result is a fuel that meets the ASTM D6751 specification — the quality standard required for biodiesel sold in the United States.
Indiana is one of the nation’s top biodiesel-producing states. With our abundance of soybean farmland and strong agricultural infrastructure, Indiana has a natural advantage in producing this homegrown fuel — strengthening rural economies, supporting Hoosier jobs, and reducing dependence on foreign petroleum.
2% biodiesel, 98% petroleum diesel
All diesel vehicles; required minimum for Indiana state fleets
Improves lubricity; minimal impact on performance or cold-weather operation
5% biodiesel, 95% petroleum diesel
Any diesel engine, any climate
Approved for use in virtually all diesel engines; cold-weather performance comparable to No. 2 diesel
20% biodiesel, 80% petroleum diesel
Fleet vehicles, school buses, agricultural equipment
No engine modifications required; qualifies for Indiana B20 tax exemption; most widely used fleet blend
99–100% biodiesel
Dedicated biodiesel fleets; warmer-climate operations
Maximum emissions reduction; requires engine compatibility check and cold-weather planning
Indiana ranks 5th in the nation for corn and soybean production, with nearly half of Indiana-grown soybeans converted into biodiesel and other biofuels. The state produces more than 100 million gallons of biodiesel annually — making Indiana one of the most important biofuel-producing states in the country. That production creates economic ripple effects felt in every rural county across the state.
Indiana’s B20 Club — a recognition program for fleets running on biodiesel blends of 20% or higher — has logged 9.4 million gallons of B20 used and 16,800 tons of CO₂ reduced among its members. That’s the equivalent of removing 75 semi-trucks from the road for an entire year.
Interstate 65, running from Gary, Indiana to Mobile, Alabama, was designated as America's first biofuels corridor — a U.S. Department of Energy initiative to ensure drivers could travel the entire route using E85 ethanol or B20 biodiesel. The concept originated with the DOE and called for upgrading fueling infrastructure along the interstate. With this corridor in place, drivers are never more than a tankful away from the next biofuels pump.
Today, Indiana has 71 retail locations offering biodiesel blends above B5, representing growing consumer access to this domestically produced fuel. Indiana state law also requires government entities and state educational institutions to fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel (B2) whenever practicable — establishing a solid statewide baseline for adoption.
DCI actively advocates for expanded biodiesel adoption across all 92 Indiana counties — particularly in rural areas where agricultural proximity makes biodiesel both economically practical and community-strengthening. We connect Indiana organizations with the resources, incentives, and fuel suppliers they need to make the transition.
DCI provides non-biased consulting for Indiana fleets, municipalities, and organizations exploring biodiesel adoption. Let's find the right blend for your operation.
Talk To An ExpertThe DOE's Alternative Fuel Data Center is the definitive resource for EV data, station locators, and incentive lookups. DCI references it for every EV conversation.
Open AFDC ElectricityBiodiesel adoption is supported by a growing suite of state and federal incentives. DCI tracks these programs and helps Indiana organizations identify and access the tax advantages most relevant to their operations.
Indiana State Incentive
Indiana exempts biodiesel blends of at least 20% (B20) from special fuel license tax when used for personal, noncommercial purposes by the producer — and from special fuel motor carrier surcharge tax. This is one of the most direct financial incentives available for Indiana biodiesel users.
Indiana State Mandate
Indiana law requires governmental entities and state educational institutions to fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel (B2) whenever possible. This mandate establishes a clear baseline and signals state-level commitment to domestic biofuel use.
Indiana Proposed Tax Credit (HB 1315)
Indiana House Bill 1315 proposed refundable tax credits for biodiesel blending and sales: $0.05/gallon for B5–B10, $0.10/gallon for B10–B20, and $0.18/gallon for blends above B20. Legislation actively supporting Indiana biodiesel producers and distributors continues to move — contact DCI for the latest status.
Federal Incentive
The EPA's Renewable Fuel Standard sets Renewable Volume Obligations (RVOs) — the minimum amount of biomass-based diesel that must be blended into the U.S. fuel supply. These federal mandates create consistent market demand for Indiana-produced biodiesel and protect producers from petroleum price volatility.
Federal Resource
New and expanded IRS tax advantages for alternative fuel vehicles and biodiesel infrastructure are available to qualifying Indiana organizations. DCI can help you identify which federal credits apply to your fleet, distribution operation, or fuel retail location.
Incentive programs change. Contact DCI for the most current information on biodiesel tax credits, grants, and federal policy updates affecting Indiana organizations.
Our Members
With 100+ million gallons produced annually and strong state and federal incentives, there's never been a better time for Indiana organizations to adopt biodiesel. DCI can help you navigate the transition.
