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Aug. 1, 2008
Environmental benefits aside, the cost of biodiesel has been one of the major drawbacks in getting truck operators to accept it as an alternative to conventional diesel. With fuel accounting for 20 to 25% of a fleet's total operating costs, even slightly higher prices can make a huge difference on a company's bottom line. Historically, the price of biodiesel (as a B20 blend) has been between 1 to

Environmental benefits aside, the cost of biodiesel has been one of the major drawbacks in getting truck operators to accept it as an alternative to conventional diesel. With fuel accounting for 20 to 25% of a fleet's total operating costs, even slightly higher prices can make a huge difference on a company's bottom line.

Historically, the price of biodiesel (as a B20 blend) has been between 1¢ to 9¢/gal. more than diesel, depending on a number of variables such as volume purchased and delivery costs, as well as fluctuations in the availability and price of soybeans. Last year alone, volatile soybean oil prices jumped 86%. Combine the impact of supply shortfalls due to the flooded soybean fields across the Midwest this year with higher usage rates, as stipulated by the EPA's Renewable Fuels Standard (RFS), and prices will probably continue to climb.

Thankfully, Federal tax credits to fleets using biodiesel have made it more cost-competitive. Record-high diesel prices are also now making the cleaner burning fuel more attractive to users. In fact, biodiesel is currently less expensive than diesel in many regions across the U.S. (see www.altfuelprices.com for prices in your area).

Some experts, however, say that the availability of biodiesel must improve if we are to meet government mandates for its increased use. Joe Jobe, CEO of the National Biodiesel Board (NBB), said the industry has set a goal to replace 5% of the country's petroleum diesel for on-road use by the year 2015, which amounts to about 2 billion gals. According to NBB, production capacity for biodiesel in this country is tripling each year. It grew from 9 plants with 50 million gal. production capacity in 2001 to 171 plants with nearly 2.24 billion gal. this year. (Demand, projected at 550 million gal. this year, lags behind capacity substantially.)

Biodiesel can be obtained throughout the U.S., mainly through commercial fuel distributors. NBB publishes a list of companies that are capable of supplying biodiesel anywhere in the country on its web site at www.biodiesel.org/buyingbiodiesel/producers_marketers/default.aspx.

For some fleets, it is more practical to use biodiesel in their own fueling facilities, since not all truck stops offer it yet. But that's changing. Where biodiesel was available at just 450 retail pumps in the U.S. in August 2005, today there are close to 1,354 fueling stations.

Helping to get biodiesel into the mainstream of the trucking industry in this country, the Iowa-based Renewable Energy Group (REG) began offering truck stop operators both biodiesel injection equipment and a regular supply of high-quality biodiesel in January of this year.

About the Author

DEBORAH MCGUFFIE-SCHYHOL

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