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Are grease cars legal?

Untaxed Fuel
Grease-car owners in some states have been told they need to register as "fuel receivers," that's the same as a gas station.
Grease-car owners in some states have been told they need to register as "fuel receivers," that's the same as a gas station.
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While t­he Environmental Protection Agency is getting on greasers' cases for driving around on fuel that hasn't been sufficiently tested, states are worried about more basic concerns: namely, lost revenue.

The problem here, again, is lack of WVO regulation. Since used fryer grease is not a government-approved fuel source, there's no mechanism in place to tax it. What you pay at the pump when you buy diesel or gasoline is partly state fuel tax. It varies by state, but we could be talking about 20 to 25 cents per gallon of diesel fuel [source: Fletcher and Freeman]. States take in a lot of money -- sometimes more than a billion dollars a year -- in state fuel taxes, and that money goes to pay for things like road improvements and other essential infrastructure projects.

When someone converts a car to run on grease, the state is losing out on probably a couple of hundred bucks a year in fuel taxes. That's not much when it's just one person. But when hundreds or thousands of people make the switch, lower emissions also means significantly less revenue.

So while the EPA has thus far mostly let grease cars off the hook, states have not been quite so understanding. There are stories around the country of people being charged not only back taxes for the number of gallons of diesel they would have used, but also charging them to act as their own gas station. In at least two cases, one in Illinois and one in North Carolina, grease-car owners have been told they need to register as "fuel receivers," a designation usually reserved for companies in the fuel business. And to become a "fuel receiver," you have to buy a $2,500 bond up-front as a guarantee that you'll pay your taxes. Between that bond, back taxes and any related penalties for using an untaxed fuel, some people have found themselves owing thousands of dollars for driving a grease car.

Some states, though, are onboard with the move to carbon-neutral WVO. Pennsylvania and Arkansas, for instance, automatically exempt grease-car owners from those fuel taxes [source: Fuller].

The hope in the alternative-fuel community is that the action taken by Pennsylvania, Arkansas and others will catch on. Perhaps the biggest obstacle is a simple lack of infrastructure to deal adequately with waste vegetable oil as fuel. In some states, people can sign up to pre-pay fuel taxes when they make the switch to WVO -- but that requires an established system to collect and tag that money as WVO-connected, which many states are not yet set up to do. So grease-car owners who do try to pay their fuel taxes are stuck working within the framework set up for other types of fuels -- which is how they end up having to become commercial "fuel receivers" when they deal with a whole 10 gallons a week.