The U.S. Department of Agriculture (USDA) has published a final rule that will implement a program that favors buying biobased products, including biodiesel, by federal agencies. The rule establishes provisions for the Federal Biobased Products Preferred Procurement Program, which will require all federal agencies to preferentially purchase biobased products, when practical, that have been designated by USDA as eligible under this program.
The rule creates the process by which USDA will designate items for preferred procurement by federal agencies.
Items are generic groupings of biobased products, such as biobased greases, biodiesel and ethanol when used as additives, hydraulic fluids, biobased polymers, industrial solvents, biobased fertilizers, and cutting oils.
USDA will issue a series of proposed rules that will designate specific items for program eligibility. After considering public comments, final rules will be published. This process of designating items by rulemaking is expected to extend over the next three years. Once an item is designated, all manufacturers with products that fall within that item may claim preferred procurement status for their products when marketing to federal agencies as long as the biobased content of their products is consistent with the statutory definition and meets the minimum levels specified in the designation rule.
To date, USDA has identified 83 items on which it is developing test information to support designation by rulemaking, which are available on the Internet at www.biobased.oce.usda.gov.
Energy Company Invests in Biodiesel
Apollo Resources International, Inc., a public energy company headquartered in Dallas, TX, has completed a stock purchase agreement with Earth Biofuels, Inc., a producer and distributor of biodiesel based in Jackson, MS. Under the agreement, Apollo Resources owns 50 percent of the stock in Earth Biofuels.
Apollo Resources has also appointed Earth Biofuels’ Chief Executive Officer (CEO) Tommy W. Johnson to the position of vice president of its subsidiary, Powerball Alternative Fuels Company, LLC. Johnson will remain as CEO of Earth Biofuels.
British Plants Near Completion
According to Reuters’ news reports, Britain’s newest biodiesel plant should be online this spring, with another plant firing up just a few months later.
Argent Energy’s 15 million-pound ($28 million U.S.) facility near Motherwell in Scotland is expected to begin producing biodiesel using recycled cooking oil and animal fats around mid-April or May 2005.
Constructed by BDI Biodiesel International, the new plant will boost biodiesel output by up to 35,000 metric tons a year and is expected to meet five percent of Scotland’s diesel needs.
Argent Energy said European Union targets on biofuels has helped spur interest in the sector, and the reduction in the United Kingdom duty level on biodiesel by 20 pence per liter in April 2002 also encouraged the company, and further expansion is in the works.
“As soon as this Scottish plant is working and proven, we would look to build at least two more plants of similar size in the United Kingdom and we would expect those to come online over the next two-and-a-half to three years,” Argent’s Joint Managing Director Andy Hunter told Reuters.
A second, 250,000-metric-ton-a-year plant being constructed by Biofuels Corporation in Teesside in northeast England is on schedule to begin operations later this year. According to Reuters, Dutch oil refiner Petroplus has agreed to purchase 550,000 metric tons of biodiesel from Biofuels Corporation over a five-year period.
In 2004, Britain produced only 10,000 metric tons of biodiesel.
New York to Increase Use
New York Governor George Pataki pledged support of renewable fuels, including biodiesel, in his State of the State address given in January, then signed an executive order requiring state agencies to begin using biofuels to heat state buildings and power the state’s fleet. In addition, Governor Pataki has proposed several tax incentives in his 2005-2006 state budget to promote biofuels in New York.
Landfill Gas to Power Texas Plant
A new biodiesel plant that opened in late March in Denton, TX, will be powered by biogas extracted from the adjacent city landfill. The project is a cooperative effort between the City of Denton and California-based Biodiesel Industries, Inc.
With an initial production capacity of three million gallons, the plant will produce biodiesel that will fuel the city’s diesel vehicle fleet with a blend of 20 percent biodiesel.
The new plant is receiving support from Dallas area restaurants, which produce over 12 million gallons of recyclable cooking oil annually. Biodiesel Industries will collect the area’s used restaurant grease and use it and other feedstocks in the Denton plant for the production of biodiesel.
Risk of SRMs in Biodiesel Evaluated
A team of international experts, collaborating on a study under the auspices of the International Energy Agency’s Implementing Agreement on Advanced Motor Fuels, is evaluating the risks of using animal tallow derived from specified risk materials (SRMs), deadstock, and downer animals as feedstock for the production of biodiesel. The comprehensive study not only analyzes the biodiesel production process, but also examines the effects of using potentially transmissible spongiform encephalopathy-contaminated fuel in the combustion process, in order to determine what risks, if any, are present to human and animal health, and to ascertain what key knowledge gaps may exist that must be addressed through experimental work.
If feasible, biodiesel production from high-risk and SRM material will provide several benefits, including recovering value from potentially wasted animal fats derived from SRMs, deadstock, and downer animals, and use of the material as an inexpensive source of feedstock, thus reducing the cost of biodiesel.
Advanced Technologies and Fuels Canada will be hosting a workshop, SRMs to Biodiesel: A Biosafety Workshop, on June 21, 2005, in Ottawa, Canada, where the authors will present the findings from their final report. For more information on the study or workshop, log onto www.atfcan.com, or e-mail info@atfcan.com.
Tax Incentive Claim Forms Available
According to the National Biodiesel Board, the Internal Revenue Service (IRS) has updated and published the first in a series of registration and claim forms associated with the new federal biodiesel tax incentive. The newly updated and available form is Form 8849, Claim for Refund of Excise Tax, and the accompanying schedules, including Schedule C, Alcohol Fuel Mixtures and Biodiesel Mixtures.
These updated documents can be found at www.irs.gov/formspubs/lists/0,,id=97817,00.html, the “Forms and Instructions” page of the IRS Web site. The complete listing of forms is at the bottom of the page. Forms are listed numerically and the updated Form 8849 and accompanying schedules on the listing are preceded by the number “0205.” Entities would generally utilize Form 8849 and its schedules to claim a refund for excess biodiesel tax mixture credits.
The “Forms and Instructions” Web page also contains listings for the other pertinent forms required to be used for registration of biodiesel producers and blenders, as well as making claims. Those forms – Form 637, 720, and 4136 – were anticipated to be updated as well.
Tennessee is Biodiesel Hot Spot
There’s a lot of biodiesel activity going on in Tennessee. In late February, the city of Chattanooga began using a five percent biodiesel blend (B5) in their 385 diesel vehicles, and plans to use a 20 percent blend (B20) within the next few months.
All three diesel tanks at the city’s main fueling facility are now holding the blend, which includes two 20,000 gallon tanks and one 8,000 gallon tank. On an annual basis, the city consumes roughly 500,000 to 600,000 gallons of petroleum diesel. Assuming consistent use of a B20 blend, biodiesel consumption could top 100,000 gallons annually.
By April, the Eastman Chemical Company plans to be using 20 percent biodiesel in more than 200 diesel vehicles at its Tennessee Eastman Operations in Kingsport, TN. The company expects to use in excess of 60,000 gallons of biodiesel through the remainder of this year.
Eastman Chemical Company manufactures and markets plastics, fibers, and chemicals.
Two New Books Released
Two new books have recently been released that will help those considering venturing into the biodiesel industry.
The first, The Biodiesel Handbook, is published by the American Oil Chemists’ Society (AOCS) Press and was edited by a number of biodiesel experts: Gerhard Knothe, U.S. Department of Agriculture National Center for Agricultural Utilization Research; Jon Van Gerpen, University of Idaho Department of Biological and Agricultural Engineering; and Jurgen Krahl, University of Applied Sciences, Germany.
The book was compiled from the contributions of nearly three-dozen authors. The 304-page hardbound book summarizes the unique solutions that researchers have discovered in answer to numerous technical questions about biodiesel. The issues include employed methodology, relevant data, and technical information, as well as addressing the current regulatory issues.
Other topics covered include alternative feedstocks, cetane numbers, cold weather properties, life-cycle assessments, and glycerol. Information on AOCS’s new book is available at www.aocs.org, or by calling (217) 359-5401, ext. 148.
A second newly released book, Building a Successful Biodiesel Business, contains more than 250 pages of information about the biodiesel industry, technologies that turn renewable crops and substances into biodiesel fuel, and how to take advantage of the fast-growing interest in this alternative fuel.
The authors of this book are nationally recognized for their early expertise in the biodiesel field, including Van Gerpen, Knothe, Rudy Pruszko and Brent Shanks, both of Iowa State University, and L. Davis Clements of Renewal Products Development Laboratories, Inc. Information on the book is available at www.biodieselbasics.com.
University Receives Donation
Biodiesel Solutions, Sparks, NV, has donated equipment to the University of Nevada, Reno, to turn used cooking oil from campus cafeterias and restaurants into biodiesel for campus vehicles. According to news reports, the company’s FuelMeister biodiesel production equipment will provide chemical engineering students experience in manufacturing more than 40 gallons of the alternative fuel per batch.
World Energy Signs Agreement with Dow Subsidiary
World Energy, a distributor of biodiesel fuel, has entered into an exclusive production agreement with Dow Haltermann Custom Processing (DHCP), a Dow business unit comprised of operations within The Dow Chemical Company and Johann Haltermann, Ltd.
DHCP will produce biodiesel at its Houston, TX, location exclusively for World Energy in North America. Under the agreement, DHCP will source the raw materials and produce the fuel to World Energy’s exacting specifications.
Biodiesel Bulletin - April 2005 Render