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U.S. Ag. industry looks ahead to demand for biodie
calendar07-01-2002 | linkNULL | Share This Post:

U.S., Jan. 1--BLOOMINGTON,(Journal Star)--If the past year was big forethanol, 2002 may be the year biodiesel moves into the fast lane.Biodiesel is a mixture of vegetable oil and diesel fuel that reducesengine emissions. It will help in finding use for the glut of soybean oilpresently on the market.As a renewable fuel, it's been in the shadow of ethanol, the corn-basedfuel, but biodiesel showed signs of stepping out on its own in 2001."The growth over the last few years has been tremendous. In 1999, weproduced 500,000 gallons of biodiesel. In 2001, we produced 25 milliongallons," said Judd Hulting, domestic marketing manager for the IllinoisSoybean Association in Bloomington.Biodiesel is sold to three basic markets, Hulting said. "Our threeaudiences are farmers, municipal fleets and over-the- road trucks," hesaid.The over-the-road trucking market is a huge one, using 35 billion gallonsof diesel fuel a year, he said.But to crack that market, biodiesel has to drop in price. Currently the B2blend (diesel fuel with 2 percent vegetable oil) adds 3 to 5 cents agallon to the cost of diesel while B20 is 15 to 20 cents more a gallon.But help may be coming from Washington. Legislation could reduce thefederal tax on biodiesel as well as establish a timetable for increases inrenewable fuel use, he said.Congress may require that all motor vehicle fuel sold in the United Statescontain a minimum amount of renewable fuel. "That would be huge," saidHulting of how the legislation would impact biodiesel.But other things are happening on the renewable fuel front.The Environmental Protection Agency's emission standards for new trucksand buses will take effect in 2007.An agency-mandated reduction in sulfur in diesel fuel (in 2006) shouldspur a boom in the biodiesel market, said Joe Jobe, executive director ofthe National Biodiesel Board in Jefferson City, Missouri.Some fleets aren't waiting for regulations to take effect."After Sept. 11, we had a trucking firm call who asked, 'What can I do?'"said Mark Dehner, market manager for Growmark Inc., a farm supplycooperative in Bloomington."Sept. 11 spurred people to be more cognizant of what's going on. Peoplearound the country decided that if we can grow it (fuel) here, let's doit. Let's have more control over our own destiny," he said.Growmark rolled out its own homegrown fuel campaign in November, providingethanol and biodiesel to farmer members throughout the Midwest, Dehnersaid.The terrorist attacks triggered "an emotional reaction" by customers whowanted to use homegrown fuels, said Chris Miller, spokesman for WorldEnergy in Chelsea, Mass., the nation's largest supplier of biodiesel.The movement towards biodiesel is good news for soybean farmers, said BradGlenn of Stanford, president of the Illinois Soybean Association."In 2001 we saw a lot of great things happen. About 15 states -- evenHawaii -- passed some sort of tax enhancement for biodiesel last year.Unfortunately, Illinois wasn't one of them. Hopefully, we'll see successin 2002," he said.Glenn said education and distribution are the two biggest needs for asurge in the use of the renewable fuel. "We don't have the terminaldistribution that ethanol presently enjoys," he said.Two Illinois bus fleets recently conducted tests with biodiesel, saidHulting of trials at Illini Swallow Co., Champaign, and theChampaign-Urbana Mass Transit District."The fleet managers said it worked great but it comes back to cost. Whenyour're buying thousands of gallons of fuel, every penny counts," Hultingsaid.But fleets that have to meet stringent federal guidlines remain a targetmarket for biodiesel, he said. Transit systems in Cincinnati and KansasCity recently announced plans to use biodiesel in some buses.