Would You Use Veggie Oil to Fuel Your Vehicle?

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With all this in mind, the decision to use vegetable oil for fuel is one to consider carefully. Concerns about taxes and EPA regulations are significant. And for many people, filtering the veggie oil and the potential for mechanical problems would be inconvenient. But for those who can embrace these challenges, veggie oil is a fun and empowering solution.

Veggie Oil Vehicles and the Law

Excited about the idea of running your car on veggie oil? Maybe even free waste oil? Before you get too excited, carefully consider this problem: It’s technically illegal, although that may be changing soon.

How could something so simple and well-intentioned cause legal problems? Here’s the skinny:

• Fuel taxes on “traditional” fuels (gasoline, petroleum diesel) help fund the building and maintenance of roads used by veggie oil cars. Using vegetable oil as a fuel without paying fuel tax on it is considered tax evasion.
• The U.S. Environmental Protection Agency (EPA) frowns on using vegetable oil in engines designed to burn diesel fuel because the emissions are not the same. If, for example, someone were to develop an unusual chemical concoction to burn in gas or diesel engines, it could cause toxic air pollution if it weren’t tested and approved prior to use.

All states have a fuel tax of some kind and the federal government also taxes fuel, but enforcement of tax laws regarding vegetable oil as a fuel are inconsistent. When it comes to biodiesel, which is basically chemically processed vegetable oil that mimics petroleum diesel fuel, federal tax laws are straightforward: You’ve got to pay taxes on it no matter where it comes from.

While enforcement of these laws has traditionally been lax, a few recent cases have received attention and may signal a new level of concern:

• In May 2007 in Charlotte, N.C., Robert Teixeira was fined $1,000 for failing to pay taxes on the vegetable oil he burns in his 1981 Mercedes.
• Two months before that David and Eileen Wetzel, of Decatur, Ill., were told they needed to be licensed as a special fuel supplier if they wanted to keep driving their veggie car or face possible felony fines for not paying fuel taxes.

If you buy veggie oil that is intended to be used as fuel, the taxes have already been paid by your supplier. Dave Dunham, owner of Smarter Fuel in Bethlehem, Pa., is paying a lot of taxes on the used vegetable oil he gathers for free. He collects hundreds of thousands of gallons of oil from about 1,000 restaurants stretched across five states. Then he cleans it up and resells it for about $1.95 per gallon, depending on state taxes. Since the taxes are already accounted for, consumers don’t need to report and pay the fuel tax individually.

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