Pennsylvania biodiesel mandate to take effect
Thursday, January 22, 2009
By Erin Voegele
Pennsylvania Gov. Edward Rendell announced Jan. 15 that the state has met the first in-state biodiesel production threshold of 40 MMgy. As a result, within one year every gallon of on-road diesel sold in Pennsylvania must contain a minimum of 2 percent biodiesel.
Pennsylvania House Bill 1202, which was signed into law July 2008, established a state renewable fuels standard, which requires biofuels percentage increases to occur as in-state production for biodiesel and ethanol reach certain levels.
Under the legislation, all retail diesel fuel sold must contain:
* 2 percent biodiesel once in-state production reaches 40 MMgy
* 5 percent biodiesel once in-state production reaches 100 MMgy
* 10 percent biodiesel once in-state production reaches 200 MMgy
* 20 percent biodiesel once in-state production reaches 400 MMgy
“The 2 percent biodiesel mandate will now become a reality because our state's biofuel producers have reached the first critical threshold established by the alternative energy law I signed last summer,” Rendell said in a statement announcing that the threshold has been reached. “Pennsylvania's producers can now manufacture 40 million gallons of biodiesel a year right here at home.”
Erie, Pa.-based Lake Erie Biofuels LLC said the company is “ready, willing and obviously able” to fulfill the state’s B2 mandate. The biodiesel producer has a production capacity of 45 MMgy, and was critical in reaching the threshold production level.
According to Biodiesel Magazine’s plant list, in addition to Lake Erie Biofuels, there are five other Pennsylvania-based biodiesel producers. These producers include: United Biofuels Inc., Keystone Biofuels Inc., Biodiesel of Pennsylvania Inc., Agra Biofuels Inc., and United Oil Co. The combined production capacity of these six biodiesel refineries is 77.5 MMgy.
The 40 MMgy threshold was reached in September, triggering the mandate. The production levels must be sustained and verified over a three-month period by the Pennsylvania Department of Agriculture. The production volumes reported to the department were 3.9 million gallons in June, 2.9 million gallons in July and nearly 3.2 million gallons in August. The calculation used to determine the mandate trigger is the total gallons produced over a three-month period and then multiplied by four.
At least six months prior to the effective date of the mandated requirements, the Pennsylvania Department of Agriculture and Pennsylvania Department of Transportation will jointly make a certification as to whether there is sufficient infrastructure in Pennsylvania to meet the requirements. The agencies will conduct at lease three public hearings across the state for each report required under the legislation.
To view a copy of House Bill 1202, visit the Pennsylvania General Assembly Web site.
Copyright: Biodiesel Magazine
Source: Biodiesel Magazine
http://bioenergy.checkbiotech.org/news/pennsylvania_biodiesel_mandate_take_effect
Friday, July 10, 2009
Minnesota Passes Statewide B20 Mandate
JEFFERSON CITY, Mo.– Minnesota has taken another step towards promoting domestic energy security and reducing the state's carbon footprint. Today, Gov. Tim Pawlenty signed a bill that will increase the current 2 percent biodiesel mandate to 20 percent by 2015.
According to the legislation, the current 2 percent biodiesel mandate will increase to 5 percent on May 1, 2009; to 10 percent on May 1, 2012; and to 20 percent on May 1, 2015.
"Implementation of the legislation starting in May of 2009 is timely and workable," said Chuck Neece, Chairman of the Minnesota Biodiesel Council, which championed the legislation. "The supply from the current biodiesel production capacity in Minnesota already exceeds 64 million gallons, more than enough to meet the five percent requirement, which would be 40 million gallons."
The increases are not automatic, however. There is built-in flexibility, including an approval process before moving to higher blends. This will allow the legislature, biodiesel producers and other stakeholders to gauge supply and demand impacts before moving to a higher blend.
Ed Hegland, Chairman of the National Biodiesel Board and a Minnesota farmer, praised the legislation's commitment to fuel quality. "The legislation includes quality assurance and national ASTM fuel specifications," he said. "We will continue to work with state leaders and stakeholders impacted by this legislation to ensure only quality fuel continues to enter the marketplace."
According to the legislation, the current 2 percent biodiesel mandate will increase to 5 percent on May 1, 2009; to 10 percent on May 1, 2012; and to 20 percent on May 1, 2015.
"Implementation of the legislation starting in May of 2009 is timely and workable," said Chuck Neece, Chairman of the Minnesota Biodiesel Council, which championed the legislation. "The supply from the current biodiesel production capacity in Minnesota already exceeds 64 million gallons, more than enough to meet the five percent requirement, which would be 40 million gallons."
The increases are not automatic, however. There is built-in flexibility, including an approval process before moving to higher blends. This will allow the legislature, biodiesel producers and other stakeholders to gauge supply and demand impacts before moving to a higher blend.
Ed Hegland, Chairman of the National Biodiesel Board and a Minnesota farmer, praised the legislation's commitment to fuel quality. "The legislation includes quality assurance and national ASTM fuel specifications," he said. "We will continue to work with state leaders and stakeholders impacted by this legislation to ensure only quality fuel continues to enter the marketplace."
Wednesday, July 8, 2009
EU Imposes Five-Year Tariff on U.S. Biodiesel Producers
U.S. biodiesel producers — already suffering from low oil prices, weak domestic demand and a delayed Environmental Protection Agency mandate — were hit Tuesday with a five-year tariff on exports to Europe.
The European Union imposed a provisional tariff on imports of U.S.-made biodiesel back in March in response to complaints the subsidized and discounted American product was damaging the industry. Biodiesel is made from vegetable oil or animal fats to be used in diesel engines. The product does not contain petroleum, although it can be blended with petroleum diesel.
The European Biodiesel Board charged that U.S. biodiesel, which benefits from up to $1 per gallon tax credit, was sold in the European market at a discount, effectively undercutting local producers. The European Commission, the executive branch of the EU, outlined the investigation in lengthy report.
The EU’s extension of the tariffs weren’t entirely surprising, said GreenHunter Energy spokesman Jack Zedlitz.
“Still, considering that 85 percent of U.S. biodiesel went to Europe, it hass created an extremely grave condition for the industry,” said Zedlitz.
The U.S.-based National Biodiesel Board was equally dismayed by the decision. EU companies were not hurt by U.S. competition, but by bad business models; high feedstock costs and detrimental EU member state policy, NBB Vice President of Federal Affairs Manning Feraci argued in a statement released Tuesday.
The five-year tariff essentially shuts off U.S. biodiesel producers from a one-time moneymaking market. Low oil prices and weak demand have placed further burdens on the industry, causing many producers to idle plants.
GreenHunter Energy has idled its refinery along the Houston Ship Channel since February. The massive biodiesel refinery — considered the largest in the U.S. and capable of producing 105 million gallons a year — may be sold. The company negotiated last month a new amendment on its credit agreement with WestLB, which gives it until Nov. 15 to make payments on a $38.5 million loan and $10 million credit line.
GreenHunter has hired an investment bank to look for a potential buyer, a strategic partner, alternative financing or new equity capital in hopes of bringing the refinery back on line.
There has been interest in forming strategic partnerships, said Zedlitz, stopping short of providing further details or identifying the interested parties.
The U.S. biodiesel industry also is anxiously awaiting the EPA’s decision on proposed changes to the 2007 Renewable Fuels Standard, known as RFS-2, which requires the use of 500 million gallons of biomass-based diesel in 2009. The EPA recently extended the public comment period on RFS-2 by 60 days.
The industry will experience more idling plants, bankruptcies and rapid consolidation in the U.S. if the EPA does not issue the biodiesel mandate, Zedlitz said. In the end, major feedstock companies including Cargill and Archer Daniels Midland could benefit.
“With no mandated consumption of biodiesel, you’ll see those first-generation assets bought by those who control feedstocks,” he said. “Feedstocks are 75 percent to 85 percent of the cost for biodiesel producers so companies in control of feedstocks would have the upper hand.”
Under a federal mandate, biodiesel refineries like GreenHunter and beleaugered Imperium Renewables, which shuttered its 100-million-gallon-a-year plant, could manage to survive and even thrive if oil prices also rebound.
http://www.bloomberg.com/apps/news?pid=20601130&sid=aMEeSlftJdR0
The European Union imposed a provisional tariff on imports of U.S.-made biodiesel back in March in response to complaints the subsidized and discounted American product was damaging the industry. Biodiesel is made from vegetable oil or animal fats to be used in diesel engines. The product does not contain petroleum, although it can be blended with petroleum diesel.
The European Biodiesel Board charged that U.S. biodiesel, which benefits from up to $1 per gallon tax credit, was sold in the European market at a discount, effectively undercutting local producers. The European Commission, the executive branch of the EU, outlined the investigation in lengthy report.
The EU’s extension of the tariffs weren’t entirely surprising, said GreenHunter Energy spokesman Jack Zedlitz.
“Still, considering that 85 percent of U.S. biodiesel went to Europe, it hass created an extremely grave condition for the industry,” said Zedlitz.
The U.S.-based National Biodiesel Board was equally dismayed by the decision. EU companies were not hurt by U.S. competition, but by bad business models; high feedstock costs and detrimental EU member state policy, NBB Vice President of Federal Affairs Manning Feraci argued in a statement released Tuesday.
The five-year tariff essentially shuts off U.S. biodiesel producers from a one-time moneymaking market. Low oil prices and weak demand have placed further burdens on the industry, causing many producers to idle plants.
GreenHunter Energy has idled its refinery along the Houston Ship Channel since February. The massive biodiesel refinery — considered the largest in the U.S. and capable of producing 105 million gallons a year — may be sold. The company negotiated last month a new amendment on its credit agreement with WestLB, which gives it until Nov. 15 to make payments on a $38.5 million loan and $10 million credit line.
GreenHunter has hired an investment bank to look for a potential buyer, a strategic partner, alternative financing or new equity capital in hopes of bringing the refinery back on line.
There has been interest in forming strategic partnerships, said Zedlitz, stopping short of providing further details or identifying the interested parties.
The U.S. biodiesel industry also is anxiously awaiting the EPA’s decision on proposed changes to the 2007 Renewable Fuels Standard, known as RFS-2, which requires the use of 500 million gallons of biomass-based diesel in 2009. The EPA recently extended the public comment period on RFS-2 by 60 days.
The industry will experience more idling plants, bankruptcies and rapid consolidation in the U.S. if the EPA does not issue the biodiesel mandate, Zedlitz said. In the end, major feedstock companies including Cargill and Archer Daniels Midland could benefit.
“With no mandated consumption of biodiesel, you’ll see those first-generation assets bought by those who control feedstocks,” he said. “Feedstocks are 75 percent to 85 percent of the cost for biodiesel producers so companies in control of feedstocks would have the upper hand.”
Under a federal mandate, biodiesel refineries like GreenHunter and beleaugered Imperium Renewables, which shuttered its 100-million-gallon-a-year plant, could manage to survive and even thrive if oil prices also rebound.
http://www.bloomberg.com/apps/news?pid=20601130&sid=aMEeSlftJdR0
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