Minn. biodiesel mandate still on track

Misleading headlines say the future of Minnesota's biodiesel mandate is uncertain. Don't believe everything that you read.
By Ron Kotrba | April 09, 2014

Despite sensationalist headlines circulating recently about the future of Minnesota’s biodiesel mandate being in jeopardy, the Minnesota Department of Agriculture and state policymakers are working on a sensible compromise that keeps the nation’s first biodiesel mandate on a promising trajectory.

First and foremost, the state still plans to move forward with implementation of B10 come July 1. This has not changed. Currently, all No. 2 diesel fuel in the state is required to be 5 percent biodiesel. As of July 1, B10 will be required only in the summer months, which, hitherto, have been determined to be April through October.

State Representative Clark Johnson is an ardent supporter of the biodiesel industry. Last month he introduced a bill for the agriculture department and the biodiesel industry seeking to modify future requirements regarding exceptions, what months higher blends should be required, and the date on which the state will jump from B10 to B20. His bill, House File 3203, missed a deadline to move forward, but Charlie Poster, assistant commissioner at the Minnesota Department of Agriculture, says the agency has made concessions to opponents of the increased biodiesel mandate by incorporating HF 3203’s language into an agency “unsession” bill (SF 2618) that is moving forward.

“The bill that’s signed into law probably won’t be HF 3203, but it will be that language,” Poster tells Biodiesel Magazine. “There was a movement by the Alliance of Automobile Manufacturers and the Minnesota Automobile Dealers Association (MADA),” Poster says. “They had some concerns about biodiesel, and they wanted to see the biodiesel mandate gutted—and I don’t think that’s too strong of a word. They were proposing some language that, in all but name, would remove our biodiesel standard. And the Department of Agriculture’s position is that biodiesel has worked really well in our state. It’s lowered the price of diesel fuel. It’s added to farmers’ incomes. It’s doing exactly what we want it to do. It’s been a great success.”

Therefore, in order to appease opponents while maintaining a common-sense approach to ramping up the biodiesel mandate, the agency has determined it’s in the best interest of Minnesota’s biodiesel and agricultural industries to make four concessions.

First, the bill language accepted by the agriculture department postpones the date of moving to B20 out to 2018 rather than 2015. “MADA and the Auto Alliance said, ‘Okay, so we’re going to B10 in July (2014), and in less than a year we’ll have to go to B20?’” Poster explains. “In response to that, the implementation date for B20 is now 2018. That’s a common-sense move, and the industry got behind that.”

Another concern opponents to the increased biodiesel mandate have is the month of October being included in the summer months, during which B10 (and eventually B20) will be required in No. 2 diesel fuel. “One thing legislators and the consumers must remember is that we don’t go to B10 or B20 year-round,” Poster says. “It’s only in the ‘summer months,’ and in the ‘winter months’ we go back to B5 (for No. 2 only). The concern is that farmers or others who purchase a lot of diesel would really fill up in October, and have a tank full of B10 that would potentially have gelling or clouding problems as the temperatures drop. So we’re proposing to remove October from the months we would use higher blends.” This would mean that the “summer season” during which higher blends of biodiesel would be required under the mandate is April through September, rather than April through October.  

The third concession involves exceptions to the mandate. Nuclear power plants, railroads, mining, logging and the Coast Guard have exemptions from using biodiesel—exemptions previously set to expire May 1, 2015. “This bill proposes that we actually make those exceptions permanent,” Poster says, adding that while these industries are not required to purchase biodiesel-blended fuel, many of them choose to do so, as a cost-savings measure. “We went out and talked to them, and many use it today because they make money by buying it,” Poster says. “Roughly a year ago, the railroads were [voluntarily] blending B20 because every additional percentage they used, they were making, or saving, more money. So they are not mandated to use it, but I would say many of them would choose to anyway, as a cost-savings.”  

The fourth item extends the biodiesel blending waiver for No. 1 fuel to May 1, 2020.

“We have tried as much as possible to respond to their legitimate worries,” Poster says. “I don’t think all the things that they brought up are legitimate. And Minnesota isn’t the first state to push toward this. I’m glad that Illinois has been very active in this area,” Poster says, regarding Illinois’ incentive that essentially makes B11 the most common diesel fuel blend available. “Sixty percent of the fuel sold in Illinois is blended at 11 percent or higher,” he says, adding that some back-of-the-envelope math shows roughly 7 billion miles have been driven in Illinois on B11 or higher, without incident. “Also, it’s removing huge amounts of greenhouse gases from the air—and it’s a great thing for the air quality in metro areas.”  

Poster says Minnesota Gov. Mark Dayton, as well as the state agriculture department, stand behind ramping up the biodiesel mandate for several reasons. One, it’s good for the Minnesota farm economy. “Having a biodiesel industry here in Minnesota adds 73 cents to every bushel of soybeans harvested,” Poster says. “That’s $219 million for Minnesota farmers. Biodiesel is also a big industry here in Minnesota. We have three biodiesel plants, creating almost 60 million gallons of biodiesel annually—it’s almost a $1 billion dollar industry in the state. And there’s air pollution savings. Biodiesel burns much cleaner than diesel. So it’s good for our air and our rural economy. It’s a net win.”