They’ll take it, but nobody’s giving it to them.
As the demand for biodiesel in the United States continues to climb, with fleet and public pumping stations opening from east to west, most fuel distributors are being shipped soy-based biodiesel from producers. According to distributors, they are not selective in the type of biodiesel they sell to their customers, i.e., whether it is derived from soy or animal fats and oils. But biodiesel processed from rendered products is struggling to find its way to the pumps.
New York’s on Biodiesel Bandwagon
The first shipment of biodiesel fuel has made its way into New York, and although the shipment is derived from soy oil, NOCO Energy Corporation, the Tonawanda, NY, petroleum distributor who has introduced the alternative fuel to New York, hopes to eventually offer fats and oils-based biodiesel.
“The ultimate goal is we will have an all-season fuel that will relate to fats and oils and soy,” commented Gary Roesch, manager of business development at NOCO, who was first introduced to biodiesel back in 2000 by Griffin Industries, a leading producer of biodiesel from rendered products. He added that the primary reason the distributor has chosen virgin soy-based biodiesel at this time is price.
“NYSERDA has an incentive program that offsets the incremental cost of biodiesel,” Roesch added, referring to the New York State Energy Research and Development Authority (NYSERDA) who has partnered with NOCO to market a diesel/biodiesel blend to the Buffalo-Niagara region as B20 (20 percent biodiesel/80 percent petroleum diesel). Currently, NOCO is offering biodiesel to local municipality fleets but plans are to expand into new customer bases in the future.
“We hope over the course of time that biodiesel will become another profitable entity,” Roesch said. NOCO will also use support from NYSERDA and the U.S. Department of Energy to develop an ethanol fueling network for western New York.
“In order for NOCO to continue to be a viable industry and employer in the region, we have to find new ways to grow and expand our products and services, and biodiesel and ethanol fuels are some ways in which we can achieve these important company goals,” stated James D. Newman, NOCO president. “We are very grateful to NYSERDA, New York State, Erie County, and the many other participants in these exciting projects. We look forward to many future collaborations as these industries grow and expand.”
NYSERDA provided $150,000 in funding to NOCO to develop the needed infrastructure improvements for the fuel distributor to blend, market, and use 490,000 gallons of B20 biodiesel, resulting in a reduction of petroleum diesel fuel consumption by nearly 98,000 gallons. According to NOCO, the transportation sector in New York uses one billion gallons of diesel fuel a year, with 85 percent of the petroleum products used imported from foreign countries.
Portland’s First Public Station
In Portland, OR, Albina Fuel has begun selling B20 at the city’s first retail biodiesel fueling site, bringing the number of public fueling stations in the United States to at least 38.
“People who are purchasing it are very happy with us offering the product,” said Jeff Arnston, operations manager, Albina Fuel and Lubricants Division. Although Arnston would not reveal how much biodiesel has been sold to date, he said Albina believes biodiesel is a good product, no matter what the feedstock source.
“Our position is that it meet the ASTM [American Society of Testing and Materials] specification,” commented Arnston. The company is purchasing their biodiesel in rail cars with a certificate of performance. Although the company does not request a specific feedstock fuel, Arnston believes the first shipments of biodiesel have been soy-based.
Arnston said that biodiesel is a good product and that it will come down to educating the public about this alternative fuel to help it succeed in the public market. He added that there is a fair number of individuals who are educated about biodiesel already, including the occasional customer who asks what feedstock Albina’s fuel is derived from.
Albina began selling biodiesel to Oregon’s Clark County fleets in April 2002.
Other Countries Offer Tax Cuts
In a move that is sure to push the use of biodiesel in other countries, the United Kingdom (UK) and the provincial government in Ontario, Canada, has given biodiesel a tax break.
As of July 26, biodiesel used as road fuel in the UK will be subject to a duty of 25.82-pence per liter, 20-pence per liter less than the previous duty rate. Twenty pence is about the equivalent of U.S. 30¢. The new excise duty rate has been set below the rate for ultra-low sulfur fossil diesel in recognition of both the extra production costs that biodiesel producers face and the potential environmental benefits of the fuel.
In Ontario, the 14.3¢ per liter provincial fuel tax on biodiesel fuels has been removed completely, becoming the first province in Canada to provide tax exemption for biodiesel fuel.
Biodiesel Bulletin - October 2002 Render