Minn. to raise biodiesel requirement

Farm Forum

MINNEAPOLIS (AP) – Starting next July, Minnesota will become the first state in the nation to require that most diesel fuel sold in the warm-weather months be a blend containing 10 percent biodiesel, under regulations finalized this week.

Minnesota, like some other states, currently requires a year-round 5 percent blend known as B5 for most diesel sales. The B10 mandate will kick in July 1, 2014, and run through Oct. 31. But starting in 2015, the 10 percent requirement will be in effect May 1-Oct. 31.

Biodiesel, which is made mostly from soybean oil, is promoted as an environmentally friendly, homegrown renewable fuel that creates jobs and demand for crops. A major concern from the trucking industry in biodiesel’s early days was that it could jell up in cold weather and clog fuel systems; the industry says that problem has been solved.

Minnesota became the first state to mandate the use of biodiesel in 2005. The 10 percent requirement was scheduled to take effect last year under a 2007 law, but it took longer than expected to ensure adequate supplies statewide and set up regulatory protocols for tracking its use. The state agriculture, commerce and pollution control commissioners certified in a letter published in the State Register on Tuesday that all the legal criteria are now met and the way is clear for the B10 mandate to take effect.

The state’s soybean farmers should see higher prices for each bushel because more soybeans will be used to meet the new requirement, said George Goblish, president of the Minnesota Soybean Growers Association. Citing a state study, he said the current biodiesel mandate adds about 73 cents to the price for a bushel of soybeans.

“It’s a safe product, it’s good for the environment, it’s good for farmers, good for the economy. Statewide there’s over 5,000 jobs that were created by biodiesel,” Goblish said. “And it’s homegrown. We don’t have to import any of this. It replaces crude oil. Unfortunately we’re not North Dakota. We can’t find oil in the ground in Minnesota, so we’ll grow it on top of the ground.”

Minnesota, one of the top soybean-growing states, will be the first with a mandate higher than 5 percent, said Caleb Little, a spokesman for the National Biodiesel Board.

But Goblish noted that higher blends are being used in some places even without mandates. Metro Transit in the Twin Cities used B20 in its buses this summer and expects to use it again next summer. B11 is common in Illinois because of sales tax exemptions there.

Minnesota’s trucking industry isn’t happy with the new mandate, though, primarily because of cost concerns. Biodiesel is cheaper than petroleum-based diesel at the moment, but John Hausladen, president of the Minnesota Trucking Association, said there’s no guarantee it will stay that way.

“We still have concerns about what the cost impact is going to be,” Hausladen said. “We repeatedly asked the state to tell us whether or not increasing the biodiesel content is going to raise our base fuel costs. They tell us they can’t answer the question. So we think that until the state can answer with certainty that it’s not wise to increase it.”