Governors, Legislatures Pave Way for Greater Use of Biodiesel
Record Number of State Initiatives Will Spur Demand for Cleaner Burning Fuel

JEFFERSON CITY, Mo.– Supporting a drive to boost the economy and promote cleaner-burning fuels, several governors have announced state energy initiatives this year that will likely increase biodiesel availability and use. Newly created incentives, grants and tax credits will help biodiesel enhance local economies while reducing pollution.

State legislation involving biodiesel is at an all-time high. The National Biodiesel Board (NBB) has tracked more than 275 pieces of biodiesel-specific legislation in the 2006 state sessions. Fifty-three bills have passed during the 2006 state sessions that directly affect biodiesel use and production. For more on state legislation, visit www.biodiesel.org/2006leg.htm.

“When it comes to alternative energy proposals, there is increasing momentum in statehouses across the country, and we’ve seen it building year to year,” said Joe Jobe, Chief Executive Officer of NBB. “Many governors and lawmakers want to go beyond what is happening on the federal level and are tapping into their own state resources to offer proposals that will not only reduce our reliance on foreign oil, but create jobs and strengthen state economies.”

Among the proposals announced or enacted in this year’s sessions:

• Arizona Gov. Janet Napolitano signed an executive order in September committing the state to reduce carbon dioxide and other greenhouse gas emissions and creating a state panel to develop a plan to achieve the goal. The advisory group's recommendations include increasing the use of renewable energy sources; improving energy efficiency; using low-emissions state vehicles; adopting cleaner-emission standards for vehicles and increasing production of ethanol and biodiesel.



• California Gov. Arnold Schwarzenegger issued an Executive Order that, among other things, establishes a target for the state of California to produce and use a minimum of 20 percent of its biofuels within California by 2010, 40 percent by 2020 and 75 percent by 2050. That includes both ethanol and biodiesel.



• Florida Gov. Jeb Bush signed the Florida Energy Act, which provides for sales tax exemptions and investment tax credits for costs associated with renewable energy technologies, which includes biodiesel.



• Illinois Gov. Rod R. Blagojevich unveiled a new plan in August that would replace 50 percent of the state’s current supply of imported oil with renewable homegrown biofuels like ethanol and biodiesel. The plan would also invest $25 million to help build five new biodiesel plants. Additionally, the plan would provide new incentives to drive continued investment in the state’s biofuels industry, and increase public availability.



• Indiana Gov. Mitch Daniels signed an extension of a law that increases the maximum amount of credits that may be granted for biodiesel production, biodiesel blending, and ethanol production. It also extends a tax credit for the retail sale of blended biodiesel to 2010.



• Iowa Gov. Tom Vilsack in May signed into law two renewable fuels and infrastructure bills that provide point-of-sale retailers with a three cent income tax credit on each gallon of a two percent (B2) blend or higher. The legislation also establishes a renewable fuels standard requiring that 25 percent of a retailer’s fuel sales be ethanol or biodiesel by 2020.



• Michigan Gov. Jennifer Granholm announced in August that the state is setting aside $250,000 to help service station owners convert gasoline pumps to alternative fuel pumps. The hope is that the grants will lead to 1,000 alternative fuel pumps installed or converted by 2008 -- a 20 percent increase. This is the second round of grants being made available by the state.



• New York Gov. George Pataki signed several pieces of legislation related to biodiesel, including a biofuel production tax credit of 15 cents per gallon after the first 40,000 gallons produced; elimination of all motor fuel taxes on alternative fuels; cost-share infrastructure grants for private sector gas stations to install and/or convert pumps for B20 or E85; and a residential Bioheat® fuel tax credit in residential heating applications.



• Pennsylvania Gov. Edward G. Rendell launched a new plan in May -- “PennSecurity Fuels Initiative” -- to reduce the nation’s dependence on foreign oil by replacing 900 million gallons of the state’s transportation fuels over the next decade with alternative sources, such as ethanol and biodiesel. It also requires that a certain percentage of retail transportation fuel sales contain eligible fuels such as biodiesel. It invests in infrastructure to support the increased use of alternative fuels and provides incentives that open new markets to Pennsylvania farmers who grow the feedstock to produce biofuels.

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