HB2423 HD3

SECTION 1. The legislature finds that Hawaii's heavy dependence on imported petroleum threatens the State's energy security, economic stability, and national security interests in the Pacific region. Locally produced biodiesel provides an immediately deployable, renewable, energy-dense fuel that reduces reliance on foreign crude oil and increases the State's resilience against global supply disruptions, which have strategic local community and military importance. Biodiesel production can expand using locally sourced feedstocks from agriculture and recycled materials, strengthening the State's circular economy and supporting high-quality local jobs, regenerative farming, and food-security co-products.

The legislature further finds that biodiesel is essential to Hawaii's clean energy and transportation goals. Biodiesel is safe, biodegradable, and compatible with existing diesel engines and infrastructure without equipment modifications. It provides firm, dispatchable renewable energy to support the electric grid when solar and wind resources are unavailable and offers significant greenhouse gas reductions for expensive and hard-to-electrify vehicles, such as trucks, buses, and marine vessels. Replacing even five per cent of the State's transportation diesel with biodiesel would prevent significant carbon emissions while keeping fuel dollars circulating within the State's economy. In addition, this change would impact fuel cost by fewer than 3 cents per retail gallon, which falls within the typical weekly fluctuations of diesel fuel prices.

The legislature additionally finds that a minimum biodiesel fuel requirement would help reduce fossil diesel usage, support biodiesel production and agricultural feedstocks, and help biodiesel become a critical component of the State's energy portfolio.

Accordingly, the purpose of this Act is to require the director of business, economic development, and tourism to implement a requirement that diesel fuel sold in the State for use in on-highway diesel-powered motor vehicles contains no less than five per cent biodiesel by volume, except in circumstances where the supply of biodiesel is insufficient.

SECTION 2. Chapter 486J, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486J- Biodiesel; fuel requirement; diesel-powered motor vehicles; rules. (a) The director shall adopt rules in accordance with chapter 91 to require that, no later than January 1, 2028, diesel fuel sold in the State for use in on-highway diesel-powered motor vehicles contains no less than five per cent biodiesel by volume; provided that the rules shall allow for the use of renewable diesel in on-highway diesel-powered motor vehicles if the supply of biodiesel is insufficient.

(b) The amounts of diesel fuel sold in the State containing no less than five per cent biodiesel shall be in accordance with rules as the director deems appropriate.

(c) Any distributor or any other person violating the requirements of this section shall be subject to a fine of no less than $2 per gallon of nonconforming fuel, up to a maximum of $10,000 per infraction.

(d) The director, in accordance with chapter 91, shall adopt rules for the administration of and enforcement of this section.

(e) As used in this section, "biodiesel" means liquid fuel produced from organic sources such as:

(1) Agricultural residues;

(2) Animal residues and wastes;

(3) Biomass crops;

(4) Food wastes such as cooking oil or grease;

(5) Oil crops including sunflower oil, canola oil, and soybean oil; and

(6) Sewage and landfill wastes,

that comply with ASTM International standard D6751."

SECTION 3. (a) The department of business, economic development, and tourism shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2027. The report shall include a comprehensive rollout plan for the requirements for diesel fuel sold in the State established pursuant to section 486J- , Hawaii Revised Statutes, that addresses the timeline, fiscal, and administrative structure of the rollout plan, any coordination mechanism concerns, and any necessary statutory or regulatory adjustments.

(b) The director of business, economic development, and tourism shall:

(1) Consult with the department of transportation during the development and implementation of the requirements of section 486J- , Hawaii Revised Statutes, to ensure operational coordination; and

(2) Present the comprehensive rollout plan to the public no later than one hundred twenty days prior to the implementation of the requirements of section 486J- , Hawaii Revised Statutes.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 3000.

Report Title:

Biodiesel; Minimum Fuel Requirement; Diesel-powered Motor Vehicles; DBEDT; DOT; Report

Description:

Requires the Director of Business, Economic Development, and Tourism to implement a requirement that, no later than January 1, 2028, diesel fuel sold in the State for use in on-highway diesel-powered motor vehicles contains no less than five per cent biodiesel by volume, except in circumstances where the supply of biodiesel is insufficient. Requires the Department of Business, Economic Development, and Tourism to submit a report to the Legislature, including a comprehensive rollout plan, and later present this plan to the public. Requires the Director to consult with the Department of Transportation during development and implementation of the biodiesel requirements. Effective 7/1/3000. (HD3)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

HOUSE OF REPRESENTATIVES	H.B. NO.	2423
THIRTY-THIRD LEGISLATURE, 2026		H.D. 3
STATE OF HAWAII