National Biodiesel Board Biodiesel Bulletin
National Biodiesel Board Biodiesel Bulletin
In This Issue September 1, 2005


President Signs Two Substantial Biodiesel Bills into Law

President George W. Bush on August 8 signed the landmark Energy Bill that includes key provisions to promote cleaner burning biodiesel. The bill passed with several provisions to promote biodiesel’s growth, including the extension of a federal excise tax credit, the biodiesel industry’s number one priority.

The tax incentive, established originally as part of the American JOBS Creation Act of 2004, would have expired in 2006. It will now be extended through 2008 thanks to Congressional champions such as Senators Chuck Grassley (R-IA), Blanche Lincoln (D-AR) and Jim Talent (R-MO) and Congressmen Kenny Hulshof (R-MO) and Earl Pomeroy (D-N.D.). The excise tax credit provides an incentive to fuel distributors to blend biodiesel into diesel fuel and to help reduce costs to consumers. The credit amounts to a dollar per gallon for “agri-biodiesel,” such as that made from soybean oil, and 50 cents per gallon for biodiesel made from recycled cooking oil.

Sen. Talent also helped create the small producer tax credit for agri-biodiesel, as well as helped secure the 7.5 billion gallon Renewable Fuels Standard in the Energy Bill that sets America on course for greater use of biodiesel and ethanol.

In addition, the Energy Bill creates a credit for alternative fuel refueling installations, including those that dispense B20. The Energy Bill also supports demonstration and testing projects that use biodiesel, like university stationary generators. It also encourages the Departments of the Interior, Commerce and Agriculture to use energy efficient vehicle technologies, including biodiesel. The Energy Bill states that biodiesel is eligible for the Clean Bus program that the Environmental Protection Agency (EPA) administers for schools.

On August 10, the President signed into law the Transportation Bill, which contains funding critical to ensure acceptance of biodiesel in future diesel engines. Sen. Kit Bond (R-MO), chairman of the Senate Transportation and Infrastructure subcommittee, helped secure an $8 million program for biodiesel research to be conducted by the National Biodiesel Board.

Further, in response to an EPA ruling, all engine companies are currently developing new clean diesel technology that will begin entering the market in 2007. The bill’s funds, which will be leveraged with industry dollars, will give the biodiesel industry the opportunity to incorporate biodiesel into these engine testing programs.

Other biodiesel highlights of the bill include the eligibility of biodiesel under the scope of the Congestion Mitigation Air Quality (CMAQ) funding program for seven states; changes to the Clean Fuels Grant Program that specifically list biodiesel as eligible; a grant program for parks to increase their alternative transportation projects and an Alternative Fuels Study.

IRS Clarifies Direction on Biodiesel Tax Incentive

In a move that is expected to increase biodiesel sales, the Internal Revenue Service (IRS) has issued a modified guidance document for the biodiesel federal excise tax credit.

The excise tax credit amounts to a dollar per gallon for “agri-biodiesel,” such as that made from soybean oil, and 50 cents per gallon for biodiesel made from recycled cooking oil. It is taken at the blender level with the intended effect of lowering the cost of biodiesel to consumers in taxable and tax exempt markets.

Although this document is not the final rulemaking, it amends the initial guidance document (IRS Notice 2005-4) published in December 2004, by clarifying several specific issues. Those include, among other things:
  • Clarification of what constitutes a “Biodiesel Mixture” (one gallon of diesel fuel blended into 999 gallons of biodiesel, or “B99.9”).

  • Clarification that a biodiesel mixture includes both dyed and un-dyed fuel. This means the incentive will apply in the heating oil market as well as the off-road market.

  • Clarification of the biodiesel certification process for sales of biodiesel through a reseller. This creates a mechanism so that the tax incentive claimant may obtain the required biodiesel certificate directly from the biodiesel producer or indirectly from a biodiesel reseller.

  • Provisions for commingling of biodiesel and agri-biodiesel.

  • Clarification on eligible feedstocks for agri-biodiesel (palm and fish oil will qualify for agri-biodiesel incentive).

  • Clarifications on applicable forms to claim credit and credit calculation.


    • To view the IRS guidance, visit http://nbb.org/news/taxincentive/Biodiesel%20Notice%202005-62.pdf.

    New Uses for Glycerin Could Include Biodegradable Packaging

    Combining glycerol and the agricultural commodity citric acid can make a new product, the U.S. Department of Agriculture (USDA) announced in August. The USDA Agricultural Research Service (ARS) discovered that biodegradable packaging from the biodegradable polymers of this combination could create a new market for glycerin left over from the production of biodiesel.

    Because one attribute of citric acid is that it is used in the food industry as a retardant to browning in cut fruits and vegetables, the new citric acid-based polyesters may prove useful as a packaging material. The complete text of the news release is posted at www.ars.usda.gov/News/docs.htm?docid=1261.

    USDA Suggests Designated Biobased Federal Products

    The U.S. Department of Agriculture (USDA) is calling for comments, with an early September deadline, on their suggested biobased products for purchase by federal agencies. The Farm Bill of 2002 called for greater use of biobased products by the federal government. Under a proposed rule published in July, one of the many categories is diesel fuel additives. Most of the categories could not be classified by the size of the potential market, but the agency did note that the Department of Energy anticipates a large potential market for the use of biodiesel as a diesel fuel additive.

    Once the ruling is announced, prospective manufacturers of the qualifying product can post their product and contact information on the program’s Web site. Agencies looking to procure products in those categories will then have to give preference to the biobased products. The USDA is accepting comments on the diesel fuel additive category, with the other first five categories, through September 6.

    Visit the program’s Web site; the proposed rule can be read at www.biobased.oce.usda.gov/public/pro_regs.cfm. Please give any comments via www.regulations.gov or use other correspondence means, per the program’s Web site.

    BioTrucker.com: A New Resource for Truckers

    The over the road truck drivers’ market has expanded rapidly recently, and in response to their growing demand for biodiesel information, the National Biodiesel Board has created a new Web site: www.biotrucker.com.

    Willie Nelson Biodiesel, the company formed by the widely adored singer and biodiesel promoter, as well as the recent federal biodiesel tax incentive, played a substantial part in feeding the interest of truckers.

    Truckers will have access to facts, news and availability of biodiesel, as well as other general trucking news. They will also be able to join discussion boards and check road, traffic and weather conditions, and other links useful to their industry.

    Register for 2006 National Biodiesel Conf. & Expo

    Registration is up and running for the third annual National Biodiesel Conference & Expo to be held in San Diego Feb. 5-8, 2006 in San Diego. A new Web site, www.biodieselconference.org is devoted to registration for this annually growing event, as well as the most up to date information on the offerings of the conference.

    The premier level of education on biodiesel is available at the conference sessions in tracks such as marketing, users, technical, petroleum and original equipment manufacturers.

    With an already large list of exhibitors confirmed, this promises to be yet another enriching conference with networking and educational opportunities. With Super Bowl Sunday setting the tone during the conference, there’s plenty of room for catching some entertainment, too.

    Indiana Welcomes its First Biodiesel Plant

    Indiana will soon have its first soy biodiesel production facility, in rural east central Indiana. Integrity Biofuels selected this Shelby County town of Morristown because it is located near Bunge North America’s Morristown facility, one of eight soybean processing plants in the state.

    “As we looked at potential production facility sites throughout the Midwest, we found a match in Morristown,” said Integrity Biofuels CEO Charles Whittington. “In this site, we had access to an adequate supply of high-quality refined soybean oil, which is the key ingredient to soy biodiesel production. We also found in Morristown a Chamber of Commerce and a town board that welcomed our renewable fuel company with community support, an infrastructure critical for long-term business success, and valued tax incentives.”

    Integrity Biofuels, a member of the National Biodiesel Board, has purchased an existing building/warehouse and expects to be in the business of selling the domestic fuel by early 2006, said Whittington, a Hoosier native. Indiana’s first biodiesel production facility will employee five to seven workers and produce 10 million gallons of biodiesel annually though company officials are already making plans to grow annual production. In its first year of production, Integrity Biofuels will utilize 6.7 million bushels of Hoosier soybeans.

    “We are clearly excited to have Indiana’s first biodiesel production plant announced,” said Chris Novak, Executive Director of the Indiana Soybean Board. “It comes at a critical time in Indiana based upon the growing demand. This plant will help us meet consumer enthusiasm for biodiesel. The launching of Indiana’s first biodiesel production plant has truly been a team effort with strong support and investment coming from state government, coupled with the investment of Indiana’s soybean producer checkoff dollars to help build the distribution infrastructure for biodiesel at retail pumps.”

    Within the state borders, Hoosiers purchased nearly 400,000 gallons of biodiesel last year. In 2005, the Indiana Soybean Board estimates that Hoosier diesel owners will demand close to 4 million gallons of pure biodiesel. The biodiesel offered to Indiana distillate customers today is primarily produced in Ohio or Iowa.

    Biodiesel to make Encore Performance at Farm Aid

    Farm Aid will be using biodiesel in its all-star lineup again this year. Willie Nelson, Farm Aid President, has been a longtime proponent of the renewable fuel and has formed his own biodiesel company in the past year, Willie Nelson Biodiesel. The concert for family farmers is hosted by Nelson, Neil Young, John Mellencamp and Dave Matthews, the artists who make up its board of directors. The Tweeter Center in Tinley Park, Ill., will be the Sept. 18 venue.

    In addition to biodiesel use in the generators at Farm Aid for the second year, the National Biodiesel Board plans to have an involvement at the series of events on Farm Aid weekend.

    Stepan Co. of Northfield, Ill., will supply the B100 fuel for the generators. For more information about Farm Aid’s concerts or events in the week leading up to Sept. 18, visit www.farmaid.org.

    Coolfuel Roadtrip Series Rolls with Biodiesel

    The "Coolfuel Roadtrip" is unveiling its travels to a TV audience in October. Under the former name of Eco-Trekker, this group of Australians traveled over 16,000 miles on a road trip across the U.S. using renewable fuels to reach their destinations. One of the Coolfuel episodes will feature biodiesel, but all of the shows have biodiesel, through its use in support vehicles.

    The show has been picked up by several networks and will be airing starting September 9 in 65 percent of the United States, with the possibility of spreading to other markets as well, and re-airing at later dates. You can get a listing of stations in your area that will be carrying "Coolfuel Roadtrip," and details of the show, by going to www.coolfuelroadtrip.com and clicking on the 'Station Listings' icon at the top of the page.

    The creators of the series do not know exactly what order each station will air the episodes, but the first four weeks will be episodes 1-4 (see episode guides on the Web site). The networks have advised the Coolfuel crew that episode 2, featuring biodiesel, airs the weekend of September 17-18. The episodes are broken down into fuels used, and areas of the country that were visited, on the Web site at www.coolfuelroadtriptv.com/episode.html.

    The National Biodiesel Board helped the Coolfuel Roadtrip crew with support along the way.

    Georgia Gets its First Biodiesel Pump

    The Peach State has broken into the biodiesel retail pump market with its first biodiesel pump, in a B20 (twenty percent biodiesel, 80 percent diesel) blend in Rome. Enterprise Oil Co. is marketing this U.S. Biofuels product to Rock-It BP, the home of the state’s first biodiesel pump. This 24-hour BP station is a truck stop with large truck access.

    U.S. Biofuels is a producer of biodiesel and a member of the National Biodiesel Board.







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    Jenna Higgins, Director of Communications
    jhiggins@biodiesel.org    		 Bev Thessen, Information Coordinator
    bthessen@biodiesel.org


    This bulletin is also available in PDF format online at
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    2003 National Biodiesel Board - www.biodiesel.org