South Dakota Gov. Mike Rounds has signed legislation to provide a tax break for motorists who buy biodiesel fuel.

According to the Associated Press, the new law will reduce the current 22-cent state tax on a gallon of diesel fuel to 20 cents if it contains at least a 5 percent blend of soybean oil or other organic oil.

The tax break won’t start until biodiesel production capacity in South Dakota reaches 20 million gallons a year.

Once in effect, the tax break will be paid for by transferring $800,000 from the Petroleum Release Compensation Fund reserve to the Highway Trust Fund.

“As diesel costs continue to skyrocket, this tax break will help ease the pain at the pump for consumers while helping to develop our state’s biodiesel industry,” Rounds said.  “Biodiesel is an ideal alternative to petroleum-based fuel. It will not reduce mileage, and because of its increased lubricity, it is better for the engine.”